A recent survey by the National Council on Compensation Insurance (NCCI) highlights the main concerns facing workers' compensation industry executives, emphasizing the system's financial health, the impact of medical inflation, and uncertainties related to economic shifts and workforce changes.
This annual Carrier Executive Survey, which gathered insights from over 100 workers' compensation executives, aims to track significant trends and challenges anticipated for 2025.
Bill Donnell, president and CEO of NCCI, noted the survey’s role in providing critical industry insights, helping stakeholders stay informed about emerging trends and making strategic decisions.
The report identifies two dominant concerns from the survey respondents:
The survey indicates that stakeholders are increasingly focused on the sustainability and resilience of the system's financial health. In recent years, workers' compensation has maintained robust metrics, such as combined ratios below 90% over nearly a decade, suggesting a financially strong system.
Preliminary 2024 data, drawn from National Association of Insurance Commissioners (NAIC) figures up to midyear, points to a combined ratio of 90% or lower. Factors like improved safety measures and automation continue to reduce claims frequency in regions where NCCI offers ratemaking services—a trend that has seen a steady decline in claims frequency for nearly 20 years.
Concerns over medical inflation remain high among industry executives, who note its distinct behavior within workers' compensation compared to general economic inflation. Current levels of medical inflation affecting workers’ compensation are moderate, between 2.5% and 3.5%, but the potential for fluctuation continues to raise questions about future costs.
Unlike broader consumer medical expenses, the unique factors of workers’ compensation claims create variations in how inflation impacts the industry. As executives look toward 2025, medical cost management remains a priority to prevent inflationary pressures from compromising the system's fiscal health.
Further discussion on these issues, along with other emerging industry trends, will be presented at NCCI’s upcoming Annual Insights Symposium 2025.
Established over a century ago, NCCI serves as a source of workers' compensation data, analysis, and solutions in the United States. Known as a licensed rating, advisory, and statistical organization, NCCI supports stakeholders by analyzing industry trends and providing actionable insights.
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