Top 25 Workers’ Compensation Insurers

On Aug. 16, 2011, The National Academy of Social Insurance reported that “the number of workers covered by workers’ compensation dropped by 4.4 percent in 2009, the biggest decrease in two decades.” Moreover, they reported that employer costs associated with benefits decreased by 7.6 percent. According to The National Academy of Social Insurance, these factors indicate that overall employment has declined. In fact, the Bureau of Labor Statistics published unemployment rates at its highest levels since 1982 hovering around 10 percent. Since that time, unemployment rates have steadily decreased and workers’ compensation insurance premium volume has increased.

Direct premium for workers’ compensation writers for the first six months of 2011 has increased by 8.8 percent over the same period last year. This is the largest increase for the second quarter period-over-period since 2006. At this rate, year-end 2011 projects to be the first year that workers’ compensation direct premium written increases year-over-year since 2006 as well.

“The National Council on Compensation Insurance filed 14 increases in the 2010-2011 filing cycle,” said Steven Groeschen, chief consulting actuary and risk analyst at Demotech Inc. “These results reflect rate increases as well as the moderate improvement in the unemployment rate.”

Workers’ compensation direct premium growth reported by insurers within the top 25 was 28.9 percent. Two unaffiliated companies are in the top 25 gainers: Texas Mutual Insurance Co. and Missouri Employers Mutual Insurance Co. Otherwise, members of insurance groups dominate the top 25 gainers, with Hartford Fire & Casualty Group holding six spots.

As we have previously stated, profitability for this line of business is still of concern given the current low investment yields, increasing medical costs and uncertainty about the impact of the federal healthcare law. Whether or not the companies within the workers’ compensation insurance industry can increase direct premium written year-over-year remains to be seen. There are still a lot of unanswered questions pertaining to the market, but for now, the contributing factors that lead to increased premium volume have become apparent again.