Workers’ Comp: Delivering for Our Neighbors

Every year, there are more than 2 million workplace injuries in the United States. Behind each of those claims is a firefighter, a construction worker or a mechanic. They’re our moms, dads, sisters, brothers, and neighbors.

One of them is Travis Wall, a parking enforcement staffer at UCLA. He doesn’t remember the moment that a car slammed into him at 35-40 miles per hour. But after two weeks in a coma, three years of rehabilitation, a dozen surgeries, and countless tears and hugs, Wall has returned to work.

It feels “triumphant,” he said. “I’m a proud man. I take pride in being a good husband, a good father, and a good provider. I was able to get back to work and feel good about myself.”

Wall’s story is a powerful example of how workers’ compensation delivers. Our system exists to help people recover.

From my perspective at NCCI, the U.S. workers’ compensation system is healthy and performing well. For example:

• The frequency of claims — from devastating incidents like Wall’s to more routine injuries — continues its steady drop as workers and workplaces become safer
• Insurers have enjoyed seven straight years of positive financial performance, an unprecedented record
• New technology is providing everyone in the system with access to more robust and timely information to provide better decision making on treatments, claims, and safety.

But for both workers’ comp insurers and regulators, concerns remain.

After seven straight years of strong performance, people frequently ask me, “Are we in for a big swing in the other direction?”

While I can’t predict the future, here are a couple of important observations about what’s happening with the cycle.

First, more timely data and advanced analytics are enabling shorter feedback loops for underwriters. This may be moderating the peaks and valleys in workers’ compensation.

A recent A.M. Best report says it clearly: “Technology has played a key role in diminishing the amplitude of market cycles.”

Second, during my nearly 40 years in insurance, I’ve observed that strong core functions — underwriting, claims, reserving, analytics — make all the difference. For insurers, strong core functions mean a more robust bottom line and a sustainable business.

From the regulators’ perspective, insurers with strong core functions create a stable and solvent marketplace.

The regulatory landscape always has a big effect on the workers’ compensation world, and this year is no different. Issues such as marijuana, opioids, opt-out, post-traumatic stress disorder (PTSD), and insurtech innovations contribute to the regulatory discussion. The desire for stability connects all the players in the system.

I believe that the path to achieving stability is built on a foundation of transparency and trust. Our role at NCCI is to share information, provide transparency, and support open dialogue. That way, we can all work together to reduce uncertainty. It is a difficult task, but the health of our workers’ compensation system depends on it.

People such as Travis Wall, his wife, and their three sons deserve it, and that’s why we must keep delivering for our neighbors.