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WCRI – How Economy Drives Financial Performance of WC – Live


Economy Drives Work Comp Success – WCRI

A great presentation on how the Economy Drives the financial performance of WC.

Dr. Harry Shuford from NCCI –  One of the best presentations so far at this conference.   This was great data analyses.  He should have been given longer than 30 minutes of time.  An hour would have sufficed for his presentation.

Picture of Man Economy Drives On Bar Graph
(c) 123RF

Income statement approach

Workers Comp’s average profitability 5% over time.  It is very cyclical.

109% combined ratio – underwriting loss of 9% per year

If insurers charged the NCCI recommended rates, they would cover costs.  – I did not understand that concept as most of the carriers use LCM (Loss Cost Multipliers) of more than 100% which would generate a profit.

Cost drivers

  • Heavy drop in manufacturing and private sector  injuries (frequency)
  • Business cycle – flow of inexperience workers (AIG study)
  • Business cycle – duration increases in recession,  decreases in better economic times.
  • Better medical treatment
  • The key is labor market function

Hard markets are always preceded by a heavy recession.   Underwriting cycles match economic performance of investments.

Bottom line – Workers Comp overall has performed much better than most of the financial industries.

I agree with the above statement as the usual market growth rate is approximately 4% over time.   Workers comp performs at 1% better level than other financial and insurance markets.

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James J Moore - Workers Comp Expert

Raleigh, NC, United States

About The Author...

James founded a Workers’ Compensation consulting firm, J&L Risk Management Consultants, Inc. in 1996. J&L’s mission is to reduce our clients’ Workers Compensation premiums by using time-tested techniques. J&L’s claims, premium, reserve and Experience Mod reviews have saved employers over $9.8 million in earned premiums over the last three years. J&L has saved numerous companies from bankruptcy proceedings as a result of insurance overpayments.

James has over 27 years of experience in insurance claims, audit, and underwriting, specializing in Workers’ Compensation. He has supervised, and managed the administration of Workers’ Compensation claims, and underwriting in over 45 states. His professional experience includes being the Director of Risk Management for the North Carolina School Boards Association. He created a very successful Workers’ Compensation Injury Rehabilitation Unit for school personnel.

James’s educational background, which centered on computer technology, culminated in earning a Masters of Business Administration (MBA); an Associate in Claims designation (AIC); and an Associate in Risk Management designation (ARM). He is a Chartered Financial Consultant (ChFC) and a licensed financial advisor. The NC Department of Insurance has certified him as an insurance instructor. He also possesses a Bachelors’ Degree in Actuarial Science.

LexisNexis has twice recognized his blog as one of the Top 25 Blogs on Workers’ Compensation. J&L has been listed in AM Best’s Preferred Providers Directory for Insurance Experts – Workers Compensation for over eight years. He recently won the prestigious Baucom Shine Lifetime Achievement Award for his volunteer contributions to the area of risk management and safety. James was recently named as an instructor for the prestigious Insurance Academy.

James is on the Board of Directors and Treasurer of the North Carolina Mid-State Safety Council. He has published two manuals on Workers’ Compensation and three different claims processing manuals. He has also written and has been quoted in numerous articles on reducing Workers’ Compensation costs for public and private employers. James publishes a weekly newsletter with 7,000 readers.

He currently possess press credentials and am invited to various national Workers Compensation conferences as a reporter.

James’s articles or interviews on Workers’ Compensation have appeared in the following publications or websites:

  • Risk and Insurance Management Society (RIMS)
  • Entrepreneur Magazine
  • Bloomberg Business News
  • WorkCompCentral.com
  • Claims Magazine
  • Risk & Insurance Magazine
  • Insurance Journal
  • Workers Compensation.com
  • LinkedIn, Twitter, Facebook and other social media sites
  • Various trade publications


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