Workers compensation insurance stands out as the most profitable major U.S. commercial insurance product line over the last five years, bolstered by relative claims stability and enduring loss reserve strength.
Executive Summary Workers comp produced a combined ratio of 87 across the industry in 2022, Fitch Ratings Analyst James Auden reports in this summary of key drivers of underwriting profit for the line. He notes that lower reported reserve redundancies and more market competition will likely reduce underwriting profits in 2023 and 2024. But it would take more pronounced price softening together with an unfavorable shift in loss costs to push the combined ratios above 95.
Segment results remain persistently favorable despite recent negative pricing trends that run counter to a broader U.S. commercial lines hardening market cycle for the last four years.