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Continued Gains for Workers’ Comp

For the 11th consecutive year, the workers’ compensation insurance industry maintained profitability with a combined ratio of 86% in 2024. Workers’ compensation remains one of the most profitable among all property & casualty lines, according to the most-recent report from the National Council on Compensation Insurance.

Donna Glenn, FCAS, MAAA, chief actuary, NCCI, called the 14-point underwriting gain, “a metric of significant underwriting profitability,” adding “the workers’ compensation system continues an era of exceptional performance with strong results and a financially healthy line. And while there are early indications of potential headwinds on the horizon, the industry is positioned well to navigate these challenges.”

Among other highlights:

• The 2024 accident year combined ratio was 99%, with prior years continuing to experience downward reserve development
• NCCI estimates a redundant industry reserve position of $16B
• Lost-time claim frequency declined by 5% in 2024, a faster pace of decline than the long-term average. NCCI expects that the long-term downwards trend in frequency will likely continue for at least the near future
• Workers’ compensation results have been strong, with over a decade of operating gains and 10 straight years of operating gains greater than the long-term average of 14%
• However, severity grew in 2024 with increases of 6% for medical claim severity and 6% for indemnity claim severity
• ccident Years 2022–2024 each saw larger-than-average increases in indemnity severity. The larger-than-average changes are largely driven by significant wage increases in recent years.
• Workers’ compensation net written premium decreased 3% in 2024