Workers' Comp Reports Seventh Consecutive Year of Underwriting Gains

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Workers' Comp Reports Seventh Consecutive Year of Underwriting Gains

At the Annual Insights Symposium (AIS), the National Council on Compensation Insurance (NCCI) presented its State of the Line Report, providing a comprehensive overview of the workers' compensation (WC) insurance market. The report includes the latest data, offering preliminary estimates for 2023 and an early forecast for 2024.

For calendar year (CY) 2023, the final written premium for workers' compensation, net of reinsurance, was $43.0 billion for private carriers, showing a 1.1% increase from the $42.5 billion recorded in 2022. This figure aligns with previous estimates presented at AIS 2024.

NCCI initially predicted a combined ratio of 86% for private carriers in 2023, but updated data shows a slightly lower ratio of 85.9%, resulting in a 14.1% underwriting gain. This marks the seventh consecutive year the combined ratio has remained under 90%, reflecting the ongoing favorable market conditions in workers' compensation.

The investment gain on insurance transactions (IGIT) for 2023 was estimated at 9%, a figure that remains consistent with earlier projections, though still below the long-term average. The WC pretax operating gain, which combines underwriting and investment income, reached 23.1% for 2023, marking the seventh consecutive year operating gains have exceeded 20%.

Overall, the workers' compensation sector outperformed the broader property and casualty (P/C) industry in 2023.

Regarding claims frequency, NCCI reported a steady annual decline of 3.4% in lost-time claim frequency over the past 20 years. For Accident Year (AY) 2023, NCCI expects an 8% drop in claim frequency, more than double the long-term average, based on preliminary data. Adjustments to premiums and exposure led to this final estimate being maintained at 8%.

Looking ahead to 2024, NCCI analyzed data from the National Association of Insurance Commissioners (NAIC) and projects that net written premium (NWP) for private carriers will remain around the $43.0 billion mark, similar to 2023. This forecast is influenced by changes in payroll, rate levels, and a projected 9% reduction in premium due to filings in various jurisdictions, continued declines in claim frequency, and moderate shifts in claim severity.

Sapiens Decision Unveils New Underwriting Solution for P&C Insurers

Sapiens, a global provider of insurance software, has launched the Sapiens Decision Underwriting Accelerator, a solution aimed at boosting underwriting efficiency and enhancing straight-through processing (STP) for Property and Casualty (P&C) insurers.

This new offering helps insurers tackle industry challenges by improving STP rates and optimizing underwriting processes to increase profitability. Sapiens Decision Underwriting Accelerator is designed to streamline underwriting while ensuring speed and accuracy, particularly in high-volume cases for both renewals and new policies.

By automating complex decision-making tasks and integrating with AI and machine learning models, the solution accelerates risk assessment, shortens cycle times, and speeds up time-to-market. The solution empowers business analysts to create, update, and test decision logic in real-time, without requiring coding skills. This reduces reliance on IT teams by up to 90%, allowing for faster adjustments and greater operational efficiency.

Additionally, pre-built decision flows help manage the complexity of different states, lines of business, and carriers, enabling faster deployment and reducing implementation time and costs for insurers. The solution also extracts decision logic from legacy systems, making it easier to access, update, and share, helping insurers improve their underwriting processes without needing expensive infrastructure upgrades.

Ilan Buganim, Sapiens' chief technology and information officer, stated that the new solution significantly boosts STP and underwriting efficiency, enhancing profitability for insurers. Sapiens also plans to extend its decisioning solutions to the mortgage sector, addressing similar underwriting challenges with pre-packaged offerings.

Liberty Mutual Reappoints Cara Sweeney to Lead Specialty Casualty Underwriting

Liberty Mutual Reinsurance (LM Re), the reinsurance division of Liberty Mutual, has appointed Cara Sweeney as the Specialty Casualty Underwriting Manager, based in Stamford. In her new position, Sweeney will oversee the underwriting strategy and performance of LM Re's US Specialty Casualty portfolio, reporting to Chantal Rodriguez, Chief Underwriting Officer at LM Re.

Sweeney will also continue to assess risks for complex financial institutions, including those in private equity, venture capital, hedge funds, banking, and insurance sectors, requiring D&O and E&O insurance.

With over 16 years of experience in the insurance industry, Sweeney's expertise is expected to enhance the team’s existing reinsurance capabilities. Prior to this role, she was Vice President at Vantage Risk, contributing to the US Financial Lines underwriting team. Rodriguez expressed confidence in Sweeney's appointment, highlighting her industry experience and market relationships as valuable assets that will bolster LM Re's Specialty Casualty segment both domestically and globally.

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Are you ready to transform your underwriting operations and take your business to the next level? Join us at Underwrite.In and experience the power of GenAI firsthand. Contact us today to learn more about how we can help you revolutionize your underwriting process and thrive in the rapidly evolving world of insurance.