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Workers Comp Insurance Carriers Will Pull Out Of Risky States


Why Would Workers Comp Insurance Carriers Leave A State?

For many years, since the workers comp insurance crisis o the 1990s, the workers comp markets in most states were stable enough for carriers to write coverage for employers.  I am not referring to the workers comp insurance carriers that are part of each state’s assigned risk pool.

The assigned risk pool is a backstop for any state or type of insured that cannot find coverage in the regular voluntary market.  Industries such as roofing, construction, employment agencies, and trucking have all used their state’s assigned risk pool to find WC coverage.

One of the concepts that I picked up at the 2023 NCCI Annual Issues Symposium is that workers comp insurance carriers have been much more selective in underwriting risks. Dr. Hartwell used the H word (hard markets) which I had thought had gone away with the Combined Ratios reducing below 90%.

Pic of workers comp insurance carriers leaving states
Public Use License – DogzLeBG

Not A Hard Market, but no Market

Not to pick on California, but the early 1990s until the mid-2000s was a boom time for SCIF, which is the carrier of last resort.  Almost all carriers had pulled out of the state due to the inability to underwrite the workplace risks.  The same lack of workers comp insurance carriers would eventually spread nationwide into the mid-2000s or longer.

An example of adverse underwriting (pulling out of a state) recently happened in California.  I came across this article over the weekend that said State Farm was pulling out of  Property and Casualty by accepting no more applications for new business.

You can check out the article at this link. 

State Farm General Insurance Company®, State Farm’s provider of homeowners insurance in California, will cease accepting new applications including all business and personal lines property and casualty insurance, effective May 27, 2023. This decision does not impact personal auto insurance. State Farm General Insurance Company made this decision due to historic increases in construction costs outpacing inflation, rapidly growing catastrophe exposure, and a challenging reinsurance market.

Why Would Workers Comp Insurance Carriers Cease Writing Coverage?

One of the reasons that a workers comp insurance carrier may pull out of a state is that complex predictive analytics have shown that the risk has/will become too great for premiums to cover the losses and expenses.  Check out the last sentence in the above press release.

Related: Third Party Administrator Adjusts Workers Comp Claims For Self Insureds



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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