Increased Workers Comp Accident Trend – 2023 Accident Rate Spike
Is there a Workers Comp accident trend in 2023 that might go under the radar? I have noticed with our loss run and Experience Mod reviews that many insureds seemed to have a weird yet substantial spike in their 2023 accident rate.
I began to think about this accident trend when I was composing my last article on the self insurance pandemic effect.
I am looking at the accident rate as the payroll/number of accidents – more of a hybrid look. The workers comp accident trend could be more of my corner of the workers comp world. Even though 2023 was more of a new hires and re-hires employment phase, accidents seemed to spike more than anticipated while payroll was slowly increasing through the end of the year.
One could also flip the above formula and look at the workers comp accident rate from these numbers. Number of accidents / Payroll. When you compare the numbers, make sure to use the same formula for consistency.
What Happened?
I think the workers comp accident trend that showed rising claims with less payroll in place was due to two factors. Let us look at each one of those factors – remembering that I am looking at it from possibly a different viewpoint than most.
Accident Curve/Learning Curve – Two Viewpoints
One of the concepts that caught my eye in college was the learning curve or the inverse (accident curve). These two curves have appeared on this website multiple times. The old saying concerning both of the curves is that 90% of all accidents happen the first time you use something – a machine, tool, etc. If you have never used a power tool and try to use one the first time, you have already experienced why an accident curve can easily cause a workers comp accident trend. Unfamiliarity lessens the amount of safety.
The second concept consists of the great return to work of 2023. After the pandemic was over, employers brought back workers from unemployment or working remotely. Even though you, a worker, have experience in your job, what is the difference between a long-term out-of-work employee and one struggling with the learning or accident curve?
Bottom Line on 2023 Workers Comp Accident Trend
If the payrolls have not yet fully recovered in 2024 and 2025, then the 2023 accidents did not have enough payroll to cover the accidents (see above formula), and 2023 ends up being a rough year for Experience Mods and Loss Development Factors.
As one of my risk management mentors said 20+ years ago, and that remains true today, the three things to get your Workers Comp accident trend lower is:
- Safety
- Safety
- Safety
