NCCI Posted Annual Report

Not the greatest news but here it is...

NCCI Describes State of Current Workers Compensation Market as "Deteriorating"

 
Posted Date: May 05, 2011 

NCCI Contact: Gregory Quinn | Director, Media Relations | Telephone: 607-723-7878

View complete State of the Line presentation from AIS 2011

(Boca Raton, FL, May 5, 2011)—NCCI Holdings, Inc. today released its annual State of the Line workers compensation market analysis and described the current state of the market as "deteriorating." This year's report indicates that the workers compensation calendar combined ratio was 115 in 2010, up 5 points from 2009.

"In 2010, NCCI defined the state of the workers compensation industry as 'precarious' based on considerable uncertainty about where the market was headed," said NCCI President and CEO Steve Klingel. "Unfortunately, that uncertainty has, to a large extent, been resolved—and not in a positive direction. We have continued to witness ongoing deterioration in market fundamentals. Today, the workers compensation industry faces a number of difficulties that will confront market stakeholders in the weeks and months to come."

"The workers compensation line continues to experience an ever-lengthening list of challenges," added NCCI Chief Actuary Dennis Mealy. "Those challenges include poor underwriting results, declining premiums, healthcare reform uncertainty, and, now, an uptick in claim frequency."

As reported above, the workers compensation calendar year combined ratio for private carriers was 115 in 2010, up 5 points from 2009. However, 3 points of the increase in combined ratio again this year was due to one carrier adding more than $800 million to excess workers compensation reserves. This is the second straight year of significant excess reserve strengthening.

In terms of premium, economic recovery appears to help slow the precipitous declines in workers compensation net written premium for private carriers that had been experienced from 2007–2009. For 2010, net written premium for workers compensation private carriers declined just 1.3%—a much smaller decline than the prior two years. (From 2007 to 2009, the workers compensation premium declined a total of 20%.)

Link to Complete Article

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