2025 NCCI State of the Line Report = Healthy Industry With A Great Outlook
Donna Glenn, Chief Actuary for NCCI, presented a great outlook for Workers Comp in her 2025 NCCI State of the Line Report. The performance of the workers compensation system remains strong according to the 2024 metrics that the NCCI) released last week.
Workers compensation premium decreased 3% in 2024. Private carriers produced their 11th consecutive year of underwriting profitability with a Calendar Year 2024 combined ratio of 86. It is the 8th consecutive year with a combined ratio below 90 for the workers compensation insurance market.
“Workers compensation is a product where compassion and analytics work hand-in- hand—protecting and caring for employees while also leveraging data to make the entire system more effective and sustainable,” said NCCI President and CEO Tracy Ryan. If you want to see a great podcast of the new NCCI leader, check out this article.
I do like that the person now at the top is an Actuary. Data, not policy, is what the Ratings Bureaus should be about and that is what Tracy Ryan brought to the table and conveyed in her presentation and podcast.
“The workers compensation system continues an era of exceptional performance with strong results and a financially healthy line,” said Donna Glenn, FCAS, MAAA, Chief Actuary, NCCI. “And while there are early indications of potential headwinds on the horizon, the industry is positioned well to navigate these challenges.”
Donna did an excellent job this conference as in the past conferences. We spoke briefly at the AIS. I wish that I had questions to ask her, but everything was covered so well that all my questions were answered over the 1 1/2 days of the Symposium.
NCCI’s State of the Line Guide include key insights:
- Workers compensation net written premium decreased 3% in 2024.
- The Calendar Year 2024 combined ratio for workers compensation is 86%, a sign of underwriting strength for the system.
- Workers compensation’s Accident Year 2024 combined ratio is 99% with prior years continuing to experience downward reserve development.
- NCCI estimates a redundant industry reserve position of $16 billion.
- Lost-time claim frequency declined by 5% in 2024, a faster pace than the long-term average decline.
- Severity grew in 2024 with increases of 6% for medical claim severity and 6% for indemnity claim severity.
New this year: State of the Line: At a Glance—It’s a concise, one-page summary that brings together key metrics and insights—all in one place. If you want a great summary, then click on At a Glance Link.
State of the Line Report
Donna Glenn, FCAS, MAAA
Chief Actuary, NCCI
NCCI’s State of the Line provides an exclusive review of the workers compensation system.
Premium for Workers Comp is down -3,2.%
Utilization offsets the fee schedule effect – I have been saying this for years, fee schedules are offset by levels of utilization
WCIRB (CA’s version of NCCI) requesting 11.2% in pure premium rate – wow, that is a large single year increase.
4th year in a row growth of 5%+
Decimal extension of Classification Codes to three decimal places – this may be more major than one might expect
Industry-Specific Trends Uncovered
Sandra Kipust, FCAS, MAAA
Senior Practice Leader and Actuary, NCCI
Sandra advances the State of the Line discussion focusing on industry-specific trends and how shifts in claims frequency may impact sectors differently in workers compensation.
One of the very interesting charts in Sandra’s presentation that showed what the COVID-19 claims looked like for the claim values. The overall total industry claims were not that significant. The Health Care sector shows a different result. NCCI and the other rating bureaus considered the pandemic as a catastrophe which results in very strict limitations.
I was shocked that the overall industry claims count was not that significant outside of Health Care.
Combined Office – 17% Marketshare
A term that I had not seen before (or remember seeing) ranked third behind Construction and Manufacturing as % of market share.
The Combined Office market share consisted of the following sectors.
