Workers Comp Pandemic Effect Slowly Works Out of Numbers
March 1, 2023, would have been the end of the COVID-19 emergency. I am assuming that California was the last state to remove the emergency. I was asked this question in an email last month. How long will the pandemic effect show up in Workers Comp numbers?
So, policies, not just California-based ones, that became effective 3/1/2023 would not have had the workers comp pandemic effect attached to them. Let us count out the end of the workers comp pandemic effect.
I had written a few articles back in 2020 and 2021 in response to workers comp pundits wanting to know the immediate workers comp pandemic effect numbers. My articles referred to the delayed workers comp system as insurance carriers do not report full policy numbers until the first UNIT STAT date, no matter the state.
Predictive analytics has changed the way that carriers underwrite insured clients. Many underwriters are now looking back up to 10+ years at workers comp claim histories instead of the usual four.
Let us count out how that works – valued means claim valuations (Rating Bureau Total Incurred)
March 1, 2023 – March 1, 2024 policy = No effect
- Valued 9//1/2024 (1st UNIT STAT date)
- Applies to March 1, 2025 – March 1, 2026 policy Experience Mod – has two years of pandemic data left
- Valued again 9/1/2025 (2nd UNIT STAT date)
- Applies to March 1, 2026 – March 1, 2027 policy Experience Mod – has one year of pandemic data remaining
- Valued again 9/1/2026 (3rd UNIT STAT date)
- Applies to March 1, 2027 – March 1, 2028 policy Experience Mod – last affected policy
The March 1, 2028 policy would be the first policy year to not have any of the pandemic policy years included in the Experience Mods.
Workers Comp Pandemic Effect – Just the Numbers
Yes, the effect of the pandemic will linger on for what could be decades. The E-Mod/X-Mod system will still have the effect present for four more years. That is the way the numbers are structured for claims development.
I wanted to show how the Experience Mod numbers would be affected overall. This article may generate questions. Please comment or email me.
