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Workers Comp Statistic Combined Ratio Best In 50 Years – NCCI


NCCI Workers Comp Statistic Combined Ratio Smoking

One workers comp statistic stood out the August 3rd NCCI Virginia State Advisory Forum.  Actually, it exceeded even my positive outlook for the Workers Compensation market health.

Steering Workers Comp Statistic Wheel
Wikimedia Commons – CZmarlin

The Combined Ratio performed even better than last year in the overall market.    Last year the ratio pegged at 94%.   What does this mean?   The formula consists of three main variables:

Losses + Expenses / Earned Premium

The current workers comp statistic – Combined Ratio came in at 85% this year.    The Combined Ratio measures a market’s total efficiency.   Investment income by carriers is not counted in the Combined Ratio.

According to NCCI,, this was the best Combined Ratio in 50 years.   Does this mean that carriers are making a 15% profit off all written premium – not exactly, but the more the number decreases, the healthier the market becomes overall.

Many people in the workers comp world say the statistic means that carriers are writing policies at a 15% rate of profit.  I usually do not dissuade that type of discussion.

One of the more interesting concepts is no one can point out the source of the Combined Ratio improving so much.  Could it be the economy?  Yes, possibly.

The best way to think of the inputs that caused such a positive effect originates from a combination of variables.   As Work Comp is such as delayed-measuring system, the true source of the success may not be attributed to any group of factors for another five to ten years.

I marked a few more pages in the presentation.   (You may want to download the PDF from the first link in this article.)

They were:

  • Slide 20 – Changes in Medical Lost-Time – Claim Severity by Component.   The utilization number has decreased to an almost no growth figure compared to 20 years ago.
  • Slide 32 – All states are reducing Loss Costs except Virginia Hawaii and South Carolina
  • Slide 33 – North Carolina reduced Loss Cost on 4/1/17 by   –14.4% which was the largest reduction in the US.

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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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