Workers Compensation insurance has always been a mixed blessing for insurance providers. As the single largest premium-generating line in the commercial arena, it should be embraced by providers. However, in the world of insurance, this segment of coverage has been historically unprofitable, according to James B. Auden, a senior executive at Fitch Ratings.
There are several reasons, he notes for the poor underwriting performance: Medical costs, expanding unemployment, competition, regulation and lower payrolls. The workers compensation segment of the industry has recorded a profit only once in the last 15 years.
Auden notes that premium rates are on the rise again, as economic indicators improve, but there are still concerns. Medical costs, understandably, are a major cost component for insurers, and the effects of implementation of the Affordable Care Act are unknown. Also, government-sponsored terrorism risk reinsurance is due to expire at the end of the year. Legislation now prohibits policy exclusions based on terrorism, so the effect of that protection expiring could have a major impact on premiums.
If you need workers compensation coverage for your employees, you may have many questions. Feel free to contact one of our experienced professionals at Chivaroli & Associates Insurance Services. We will be happy to help you with your needs, wherever you are located. Specific coverage requirements and rates can vary widely from one state to another.
Chivaroli and Associates Insurance Services is a full-service brokerage firm specializing in the custom-design and placement of insurance and alternative risk funding solutions for your healthcare organization.