Workers Compensation Rates Should (Selectively) Run the Gamut in 2018

February 13, 2018

Workers compensation rates in 2018 will be mixed, with pricing for some programs expected to be flat to down and others seeing spikes, according to a market prediction from the broker USI.

In other words, market trends should continue as they did in 2017, according to the report.

“In 2017, we saw a continued downward trend in workers compensation, including a reduction in premium rates overall, particularly in the loss-sensitive marketplace. Given the lack of deterioration in many larger carriers’ combined loss ratios, we expect similar aggressive targeting to grow market share in 2018,” the USI report predicted.

USI said that returns for low-risk investment opportunities are still limited. On the one hand, there is both aggressive and prudent pricing coming from carriers seeking to grow premium. On the other, clients with “poor loss results, declining financials,” and residences in states such as Florida, California and New York are facing underwriting discipline (as are insureds in more volatile industry classes).

USI predicted that carriers will try to keep clients with specific loss severity or if they are pursuing more premium savings.

For 2018, USI predicts pricing will stem from a desire to maintain or increase market share, with goal of profitable market share driving those strategies.

Highlights of USI pricing and other predictions in the workers compensation space:

USI’s full report is the 2018 USI Insurance Market Outlook report. The report also forecast trends in commercial market areas including property, general liability, umbrella liability, international, environmental, aviation, crime, cyber, medical malpractice; and kidnap, ransom and extortion.

Source: USI