Despite COVID, Comp Claims and Severity Declined in 2020, NCCI Says

The disease known as COVID-19 may have caused wrenching changes around the world, but its effects on workers’ compensation claims were relatively minor in 2020, the National Council on Compensation Insurance said in a new report.

Overall claim frequency, including COVID-related claims, dropped slightly from the previous year in the 38 states for which NCCI serves as a research and rating organization. When COVID claims are excluded, claims frequency dropped almost 7% in 2020, a significant difference from 2019, the report said. Claim frequency increased for the goods and services industry category, which includes hospital workers, and for miscellaneous, which includes police officers.

And, after four years of increases, overall claim severity decreased in accident year 2020. An NCCI chart shows that lost-time claim severity appears to have dropped by more than 6% last year. Most COVID-related workers’ comp claims were small, which helped keep the total severity figure down. The report explained that about a quarter of all claims in 2020 were for less than $5,000 each, but almost 90% of COVID claims were for that amount.

“During 2020, the frequency of claims in this size category increased by 21% — contributing to this year’s observed decline in average claim severity,” reads the report by NCCI actuaries Carolyn Wise and Kevin Fernes.

The NCCI national data is similar to that in Florida, one of the few states to publicly report comp COVID claims data. The Florida Division of Workers’ Compensation reported that the vast majority of coronavirus-related claims in 2020, about 56,000, were for less than $5,000.

Nationally, claims arising from motor vehicle accidents also declined by 14.5%, as more people worked from home and traveled less during the pandemic shutdown, the NCCI reported. Office and clerical workers posted the largest decline, but some essential workers, including garbage collectors, mail deliverers and fast-food employees, saw increases, the research found.

The pandemic also produced an increase in claims for the chest and trunk areas of workers’ bodies, while overall claims for that body part decreased. Overall, the average severity of COVID-19-related claims is about one-third the severity of non-COVID claims, the report said.

Claim frequency for occupational disease and cumulative trauma declined.

The researchers said that 2020 was an unusual year, thanks to COVID, and that early data for 2021 suggest that this year may be back in line with historical trends. The NCCI said it will share more data on 2020 along with preliminary information on 2021 at its Annual Issues Symposium in May 2022.