2023 NCCI Annual Insights Symposium – First Morning Top 10 Concepts
The 2023 NCCI Annual Insights Symposium (AIS) provided so much good worker’s comp data at such a fast pace. I decided to cover the Top 10 Concepts from NCCI (bolded) with my comments after each concept.
2023 NCCI Annual Symposium Key Takeaways:
- Worker’s compensation premium increased by 11% in 2022, returning to approximately the same level as four years ago, in 2019. This means the economy and workers comp system is back to where it was before the pandemic. The 11% increase is the largest I can remember since I started analyzing workers comp data in 1996.
- The calendar year combined ratio for worker’s compensation is 84%, a sign of underwriting profitability for the system. Being below 100% for eight years means the worker’s comp insurance system has retained its profitability numbers since 2016. Check out the chart for more info.
- The worker’s compensation reserve redundancy grew to $17 billion. I had written on reserve redundancy in this article. I see it as the carriers possibly over-reserving their files. NCCI sees it as a healthy cushion.
- Lost-time claim frequency returned to its 20-year trend, declining 4% in the past year. Frequency has been declining since the early 2000s. An increase in severity has partially offset the frequency reduction.
- NCCI reported a notable rise in severity for 2022 with medical claim severity increasing about 5% and indemnity claim severity rising about 6% year over year. The longer-term perspective indicates this is a manageable rise. In my humble opinion, the indemnity claims severity surpassed medical claims severity due to the resistance by the injured workers to attend follow-up physician appointments. Approximately 35% of the claims we consulted on during the pandemic had medical treatment hesitancy with the concern for COVID in medical facilities. The hesitancy caused the indemnity part of the claims to increase dramatically over time.
- The loss and severity numbers produced by NCCI had the COVID-19 claims removed completely. Removing the COVID claims from the severity and frequency stats made sense as they were not included in any employer’s Experience Modification Factor (E-Mod).
- Workers Comp is still the most profitable P&C line. I used to have the so-called experts laugh at me in 2010 when I said that Workers Comp can be written as a standalone line without having to write package deals and include WC as part of the package of policies.
- The number of workers under Classification Code 8871 (Telecommuter) increased from comparatively 1% of Class Code 8810 to 10% of 8810. The number of telecommuter workers increased 10-fold due to the pandemic and the move towards remote workers.
- The only way the payroll increases will stop is by a shock to the economic system such as a recession, another pandemic, or some type of political change.
- ChatGPT loves itself greatly. Whenever NCCI President Bill Donnell asked the AI to write an introduction to his speech, ChatGPT called the 2023 NCCI Annual Insights Symposium the 2023 Artificial Intelligence Symposium.
This morning was full of such good info that I could have added in a few more concepts. I will stop with my 2023 NCCI Annual Insights Symposium at 10. I will write another article tomorrow on the second day of the conference.