The number of workplace injury claims continues to decline year after year despite significant changes in workforce demographics that experts thought would increase claims frequency, according to a report by the National Council of Compensation Insurance.
The number of workers aged 55 and over has nearly doubled since 2006. At the same time, that age group began to suffer more workplace injuries than younger workers, when years ago it suffered less. Declines in frequency rates across all age groups offset the impact of that switch.
In fact, claim frequency declined since 2006 for every demographic group identified in the report. Overall, frequency declined 30% from 2006 to 2017, according to BLS data. NCCI calculated and even better decline of 32.6% during that period, using insurer data.
James Lynch, chief actuary of the Insurance Information Institute, said that the data clearly shows why insurer loss ratios are at historic lows and employers have enjoyed double-digit decreases in premiums.
“There’s good news, and there’s better news,” he said. “Frequency is going down everywhere. It’s going down by age, it’s going down by sector, it’s going down by gender.”
Lynch said the improved safety of workplaces follows larger societal changes that have lead to improved safety in general. The percentage of smokers has gone down, people are eating healthier and the crime rate has declined.
Workers may be safer, but they are also older: 22.4% were 55 or older in 2016, almost double their 12% share in 2006, according to BLS data.
Work injury numbers are dropping despite that increase. Older workers were once less likely to be hurt at work, but in recent years have become more accident-prone than their younger peers. While injury rates did decline for workers 55 to 64, the rate dropped far more dramatically for younger workers. In 2017, workers aged 25 to 44 became the group with the lowest incidence rates, in part due to an uptick in injury rates for workers 65 and older, according to the NCCI report.
Females also make up a larger share of the U.S. workforce, and now represent 47% of all workers. Women continue to be less injury prone than males, but the difference between the genders has diminished as female workers increased their numbers in male dominated industries such as transportation and manufacturing. In 2017, men had 17% more lost-day injuries than women, compared to 34% more injuries in 2006, according to BLS statistics.
10 Years Ago
Mark Walls, vice president of communications and strategic management for Safety National, said that the NCCI report stands in contrast to industry concerns 10 years ago, when many feared that increasing numbers of older workers would boost loss costs through more severe claims.
But Walls said the frequency numbers may change. He said research by NCCI and others has shown that workplace accident rates tend to increase when unemployment rates are low, as less experienced and sometimes less physically fit workers join the workforce. The current 4% U.S. unemployment rate is an historic low.
Walls said he’s heard anecdotally from insurance claims managers that claims frequency has started to tick up. Those numbers just aren’t yet available to researchers.
“We have had a significant shifting of people from not working to working, including people not working for physical reasons,” he said. “What the industry thinks we are seeing is that the new workers in the workforce are not as well trained and sometimes are not in as good physical condition.”
That brings Walls to another red flag, which wasn’t covered by the NCCI report. He said when workers are injured of late, they are far more likely to produce a “mega-claim” costing $1 million or more. Walls said while the overall workplace injury rate has declined, the frequency of $1 million claims has gone up.
“It used to be a $5 million loss was huge and $10 million was rare,” Walls said in a recent blog post. “But now $10 million is increasingly common and individual claims are being seen as large as $40 million.”
Sams is editor of ClaimsJournal.com.
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