Shocking Results at NCCI Virginia Advisory Forum – All Good
The NCCI Virginia Advisory Forum showed a strong Workers Comp market. The strong market is not surprising. The strength of the nationwide market was astounding.
I attended the NCCI Virginia Advisory Forum in Richmond yesterday. North Carolina has it own independent rating bureau. Richmond lies nearest to our HQ in Raleigh, NC. The results make it a worthwhile trip.
Last year, the agents/brokers packed it into the meetings. I arrived 5 minutes late and had to sit in the back. This year, the carriers and TPA’s were out in force.
The national statistics indicate the Workers Comp market combined ratio dropped to its lowest level since the 1950’s. What? Last year the NCCI Virginia Conference produced similar results.
NCCI always provides their slides from almost any meeting or conference. The slides for the 2018 Virginia Conference are here. The slides are a PDF file if you wish to download them.
These are my handwritten notes:
- Combined Ratio – Lowest level since the 1950’s. See slide 17 in the PDF link above.
- Payrolls have increased by 3.4% or 4.4% – depends on the source of the estimate.
- 9.6% Loss Cost Reduction
- No end in sight to Combined Ratio reduction – quoted by Jay Rosen, NCCI Presenting Actuary
The Combined ratio can be thought of as a profit figure. The lower the figure, the more possible profit there is in the market for carriers. I myself had thought there would be a bottom to the net combined ratio. There does not seem to be one now or in the foreseeable future.
The formula for the combined ratio is in this article from the 2017 Virginia Advisory Meeting. Last year, the ratio was .94. For some reason, I had thought that was the bottom. I was incorrect.
My notes also show a result of a polling question asked by NCCI towards the end of the conference.
What is the most important issue to you with Workers Comp?
The two main categories were:
- Fraud – by a large margin
- Cost – a distant second
I recommend downloading the PDF file from this presentation and reviewing it. It will be worth your time to see all the topics covered at the NCCI Virginia State Advisory Forum.
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