HireCentrix News Updates
Soft market conditions with unabated price competition and a slow economy with reduced payrolls continued to affect commercial liens including the the workers' compensation industry in 2010, as they did in 2009.Robert Hartwig, president of the Insurance Information Institute, believes the property/casualty insurance industry will see growth in 2011 — the first time since 2006. Increase in demand for commercial insurance is in its earliest stages and will accelerate in 2011, he said, although there will likely be regional differences across the country. Workers' compensation should be one of the growth areas.
One report -- from SNL Financial -- saw modest gains in premiums for workers' compensation in the third quarter. But big broker Marsh found that workers' compensation rates declined an average of 5.3 percent in the third quarter—a bit less than other commercial rates but still a decline. Primary casualty—comprised of workers' compensation, general liability, and automobile liability—remained largely a buyer's market, according to Marsh.
Insurers found themselves under growing pressure from two forces – low interest rates that could dampen investment income in coming years and competition that has made raising prices difficult. Analysts will be watching closely to see how insurers handle both challenges.
The industry found itself under increased pressure in 2010 to help return injured employees back to work while effectively managing costs, according to John Shilts of the Oregon Department of Consumer and Business Services. While injured workers claims are down, so is funding for return-to-work programs, anti-fraud efforts, and overall monitoring of state workers compensation systems, he told attendees at the Workers Compensation Research Institute's (WCRI) Annual Issues and Research Conference.
Dr. Richard Victor, WCRI executive director, said businesses have been under more pressure to eliminate employer costs that do not improve worker outcomes. The WCRI noted that the industry is also trying to figure out the effect of the recession on the system across different industries and of aging employees who stay in the workforce longer due to the economic downturn.
Some research released in 2010 raised a few eyebrows.
The U.S. Labor Department reported that local and state government workers have much higher rates of injuries and illnesses requiring days away from work than workers in private industry. The rate among local and state government workers was 180 to 185 cases per 10,000 full-time workers compared to 106 cases for private firms. This was the first time incidence rates for public workers have exceeded those for private industry.
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US investment in the Netherlands from 2000 to 2010 was nine times more than US investment in China during the same period. US investment in the UK was more than seven times more, and in Ireland nearly three times more, than in China. (Source: Transatlantic Economy 2011
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