Workers Comp Premium Growth – Recovery or Expansion?
Yesterday, NCCI released an update and final premium numbers for 2022. The Workers Comp premium growth numbers showed that a recovery from the pandemic had occurred similar to the financial crisis recovery of 2008 – 2010. The chart at the bottom of this article covers Workers Comp premium levels for the last 20 years.
These year-over-year numbers even forecast the same growth for 2023. I attended the NCCI 2023 Annual Insights Symposium. Being a numbers geek, I did not mention the solid figures for the overall workers comp premium growth. I was looking at the granular level numbers and did not mention what appears to be a business recovery and expansion of sorts.
I decided to research the numbers further. According to the US Census Bureau, new business applications were up over 40% for 2021 and 2022. The chart below shows a massive business expansion due to new business applications.
The Retail Trade sector had the sharpest increase. All sectors spiked in the same time period.
NCCI Numbers = Workers Comp Premium Increase
The statistics provided by NCCI are below.
The final countrywide analysis shows that:
- WC Calendar Year 2022 private carrier net written premium (NWP) increased from 2021 by 11.3% to $42.5 billion
- The WC Calendar Year 2022 private carrier combined ratio was 84.0%, and the operating gain was 24.6%
While still early and subject to revision, preliminary analysis through the second quarter of 2023 shows that:
- WC Calendar Year 2023 private carrier direct written premium (DWP) increased 5% through the first half of 2023, compared with DWP through the first half of 2022
- The WC Calendar Year 2023 private carrier direct loss ratio through the first half of 2023 is at 47%, the same as that observed through the first half of 2022
Final WC Results for 2022
For Calendar Year 2022, the most recently reported (as of May 27) WC written premium volume net of reinsurance (NWP) is $42.5 billion for private carriers. This is unchanged from the NWP estimate presented at AIS 2023 and represents an 11.3% increase from 2021’s NWP volume of $38.2 billion. Including state funds, the Calendar Year 2022 NWP volume is $47.5 billion.
