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Few Work Comp Premium Written Surprises for 2014

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Work Comp Premium Written Surprises for 2014

The total work comp premium written for 2014 increased 5.6% over 2013 to $46.8 billion according to AM Best.   These figures were part of the Top 25 Workers Comp carriers for 2014 report issued annually.

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Two carriers doubled their net premiums written (NPW):

  • Great American increased its NPW by approximately 103%.
  • AmTrust  came in at 95.5% over 2014

I am not sure why the two carriers decided to increase their NPW so dramatically.  Could this have resulted from picking up insureds from Liberty and other carriers which wrote less premium than in 2013?

As expected with an announcement earlier this year Liberty Mutual decreased its  NPW by over 27%.  This may be due to a more selective renewal process.

Two state funds that only write domestically (in their own state) ranked in the top 10.

  • The State Compensation Insurance Fund (SCIF) now ranks 7th.  SCIF increased its NPW by 37.3%.  One has to wonder does this mean a start to another WC insurance crisis in California.  The crisis situation is not likely to reoccur soon.   In the 1990’s SCIF was the #1 ranked carrier in size.
  • Texas Mutual came in 8th with a steady but not significant increase in premiums.

Colorado’s Pinnacol increased its NPW by over 18%.   The trend of state-based domestic carriers significantly increasing NPW will be have to be monitored closely.

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2 Responses

  1. Well, it could mean that the large mult-ilines are finally realizing that the math of using WC as a loss leader to attract the more profitable lines is dead. Could also mean that there is a realization that the effective management of work-related injury really is a local business best left to those who truly understand the medical and legal dynamics of their jurisdiction. Could also mean that industry is cream skimming and leaving the dregs to insurer of last resort.

    One could test this by looking at how regional mono-lines are doing..gaining/losing share. View from this vantage point is that un recognized/unintended adverse incentives within the Affordable Care Act will make WC very unattractive to non-specialist multi-line carriers in very short order.

    But as always, just my opine

  2. Michael, thanks for your insightful input. Acquisitions may have also contributed to the exponential growth. I saw this on one of the comment boards right after I published the article.

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James Moore

Raleigh, NC, United States

About The Author...

James founded a Workers’ Compensation consulting firm, J&L Risk Mgmt 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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