A.M. Best Current State Of Workers Comp
Should we sound the alarm for the current state of Workers Comp?
. A.M. Best had recently published a few figures that were worse than I had expected for the Workers Compensation markets. A.M. Best has always seemed to make the best predictions of any of the rating agencies overall. Most of the risk managers and Workers Compensation consultants such as this company had expected a downturn which A.M. Best confirmed completely.
Nationally, the Workers Comp market has been affected in the following manner:
- Very rapid Workers Compensation regulatory changes
- Carrier and State Fund Net Income fell by 62% – ouch!
- Net Premium Premiums Written (NPW) fell by 12% while the rest of the property casualty market only fell 2%.
Quite a few of our risk manager clients and I have identified two areas that A.M. Best also point out in their analysis. Soft pricing and the rise in unemployment seem to be the areas that account for the sharp decrease in the Workers Compensation premiums written. I checked on the true unemployment rate last week, not the governmental rate . The real rate is 16%.
Does this mark the start of a very hard Workers Comp market? I had thought that two years ago. Competition has kept the market very soft.
©J&L Risk Management Inc Copyright Notice