Up, Down & Flat: Workers’ Compensation Pricing in 2018

Workers’ compensation rates in 2018 will be mixed, with some programs seeing pricing flat to down and others seeing spikes, according to a market prediction from the broker USI.

In other words, market trends should continue as they did in 2017, according to the USI report.

“In 2017, we saw a continued downward trend in workers’ compensation, including a reduction in premium rates overall, particularly in the loss-sensitive marketplace. Given the lack of deterioration in many larger carriers’ combined loss ratios, we expect similar aggressive targeting to grow market share in 2018,” the USI report predicted.

USI said that returns for low-risk investment opportunities are still limited. On the one hand, there is both aggressive and prudent pricing coming from carriers seeking to grow premium. On the other, clients with “poor loss results, declining financials” and businesses in states such as Florida, California and New York are facing underwriting discipline (as are insureds in more volatile industry classes).

For 2018, USI predicts pricing will stem from a desire to maintain or increase market share, with a goal of profitable market share driving those strategies.

Other USI predictions for workers’ compensation:

USI’s full report is the 2018 USI Insurance Market Outlook report. The report also forecast trends in commercial market areas including property, general liability, umbrella liability, international, environmental, aviation, crime, cyber, medical malpractice; and kidnap, ransom and extortion.