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Workers Comp Investing – Two Totally Different Methods


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.

pic of stock exchange workers comp investing
Public Domain – Library of Congress

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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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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