Fitch expects profitable workers’ comp lines but not for long
Last year brought profits for property & casualty insurers’ workers’ compensation lines but the good times may be short-lived.
Ratings agency Fitch reports that US workers’ comp saw increased underwriting performance in 2015 following years of losses but that with hotter competition in the sector, it expects an underwriting loss to return by 2017.
"The workers comp insurance market saw a sharp turnaround in the last few years due to past premium rate increases, stable loss cost trends and improved loss reserve experience, however, this performance will likely be unsustainable as price competition intensifies due in part to abundant market capacity," said Jim Auden, Managing Director, Fitch.
The segment underwriting combined ratio dropped from a recent cyclical high of 117 per cent in 2011 to 95 per cent in 2015. Premium revenue growth averaged more than 5 per cent for the last three years and was 3.5 per cent in 2015.
Berkshire Hathaway and
AmTrust are among the insurers that have seen rapid growth in the workers’ comp sector while
AIG and
Liberty Mutual have, along with others, cut premiums in response to past losses.
Ontario workers’ comp board defends ‘paper doctors’
The Workplace Safety and Insurance Board in Ontario has defended its use of so-called ‘paper doctors’ who assess injured workers without seeing them.
A report at thestar.com says that officials maintain that it uses the doctors for benefits claims “appropriately” and that an internal investigation found that workers’ own physicians and the Board’s doctors disagreed in just 15 per cent of cases.
The internal review has been criticized by workers’ advocate David Newberry but there is yet to be a decision on an official investigation by the provincial ombudsman.
Oregon Health Co-Op set for liquidation
The flurry of health insurance co-operatives being forced into liquidation continues as regulators plan to liquidate Oregon Health Co-Op.
Like similar closures reported recently in Illinois and Utah, the Oregon non-profit’s finances have reached disaster status as promised federal funds have failed to materialize.
"It is with great sadness that I announce Oregon's Health CO-OP is shutting down its doors immediately," Phil Jackson, the co-op’s CEO told Oregon Live. "The board of directors agreed that it is in the best interests of our members and community that we wind down our operations."
Oregon’s insurance commissioner will begin the steps to liquidate the co-op’s assets Monday.
Earlier this year another Oregon co-op Moda was placed under a supervision order and last year Health Republic became the first co-op in the state to fail. Both insurers sued the federal government over the non-payment of funds from the Risk Adjustment Program.
