Press Release - NOVEMBER 12, 2014
A.M. Best Special Report: U.S. Workers' Compensation Results Sustain Recent Improvement
FOR IMMEDIATE RELEASE
OLDWICK - NOVEMBER 12, 2014
While the sustained positive rate environment has benefited underwriting performance, the workers' compensation industry—which, for the purposes of this report, means the aggregated results for the workers' compensation line of business as reported by all companies and state funds on Insurance Expense Exhibits filed with A.M. Best—faces familiar challenges as the competitive market environment and persistent low investment yields compress operating margins. Although uncertainty remains over the impact of health care reform, there have been positive indications during the past two years that further improvement in results may lie ahead over the near term. Written premiums increased for the third straight year, improvement in the combined ratio has continued and the reduction in claims frequency has largely offset the increase in claims severity.
Operating results for A.M. Best workers' compensation composite—which consists of individual companies whose book of business is primarily workers' compensation and includes results for all lines of business written for those companies—also improved in 2013. The improvement was driven by lower underwriting losses and a reduction in underwriting expenses, mainly due to a one-time adjustment related to New York reform legislation and solid, but declining, investment earnings.
For a full copy of this special report, please visit: http://www3.ambest.com/bestweek/purchase.asp?record_code=230527 .
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