NCCI Says Workers Comp Costs Up – Number of Claims Decreasing
The NCCI says claims costs are increasing but the number of workers comp claims is decreasing . According to a very recent report by NCCI (R), the downward trend in the number of Workers Compensation claims has continued for 2009. The disappointing factor for cost cutters is that the actual costs per claim has increased. NCCI always does a great job in analyzing data and drawing various conclusions.
My take on the numbers being down with costs increasing are threefold:
- The more complex claims are now prevalent. Companies are shrinking. The number of newer and smaller claims compared to the complex claims is decreasing as the same injury rate applied to a smaller group means less claims.
- Many studies have shown that any worker out of work six months will not return back to work. Companies may not have the same job available on a return to work. This would push the TTD period beyond six months much more easily resulting in more complex claims.
- There is a self-induced pressure on employees to keep working and not file a claim. This is the basic fear of job loss. I have not seen any studies, but I am sure there is a small “bump up” in claims if and when the economy comes out of a recession due to employees having a lower fear of a job loss if they do report a claim.
- The number of claims decreasing should not be a surprise during or just after a recession. With the number of workers decreasing, the numbers of claims would naturally decrease. The employers’ risk portfolios are smaller due to less workers.
If anyone has more to add or disagrees, please post a reply or send me an email.
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