Reader Question on Workers Comp Investing
When we receive any article/newsletter reader questions, I usually attempt to include the article in an upcoming weekly newsletter. A short emailed question on Workers Comp investments caught my eye.
Can you recommend any Workers Comp Investments?
This question came in last week. I had thought this was a question that was not really applicable -direct investment in Workers Comp. With my background as a ChFC, I could not ignore the question. Let us look at two ways; one obvious and one not so apparent.

Direct Investing – Not So Easy
In 2018, there were many private equity companies that were looking to invest in workers comp ancillary companies. I cannot mention their names due to NDAs. Private equity groups are usually closed-ended – meaning that one cannot directly invest in those companies.
According to Investopedia
Based on the predicted strength of the financial services industry due to an expected increase in interest rates, the insurance sector is poised for growth in the coming years. Mutual fund investments targeting financial services and insurance companies are the simplest way to take advantage of a potential rise in the industry. The most popular mutual funds focused on insurance sector companies include the Fidelity Select Insurance Portfolio, the T. Rowe Price Financial Services Fund, and the John Hancock Financial Industries Fund.
This good article from July 2022 reflected an upcoming rise in interest rates over the long haul which benefits carriers greatly.
The most active investment areas were not carriers Ancillary service companies had the most investment activity over the last two decades. Ancillary investment companies include Medicare Set Asides, Physical Therapy (PT), PBM’s, etc.
Business Owner – Workers Comp Investing = Policy + Safety Program
Workers Comp investing from a different angle comes from an old article I wrote in 2011 on workers comp policy as a zero-sum investment. A Workers Comp policy may not seem like a good Workers Comp investment until an uninsured employer has an accident. J&L receives a call at least quarterly from an employer that decided to “go bare” with insurance and now has a claim.
The cost of paying a claim out-of-pocket including fines can be daunting. I have sat through three mediations where the client-employer had to pony up large amounts of money. One area that stings comes from not having a fee schedule for the medical bills = ouch!
The most obvious great Workers Comp investment that pays the highest return (of sorts) is a great safety program, or in many cases – any type of safety program. Workplace safety seems to go through many cycles of concern/little concern.
With incredibly high interest rates, safety may be on the back burner presently. A safety program may not look like workers comp investing until the accident happens and the claim is filed.
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