Overweight America causing W Comp loss ratios to climb

It has been proven out. Obesity increases work comp loss ratios 5 times. Now with studies estimating that 60% of the american work force is considered over weight, this should be of vital concern to the insurance industry. Work comp loss rates have gone down during the recession. Actuaries are reporting lowering loss trends due to the amount of people out of work. As the economy improves and more unemployed get jobs the expectation is that comp loss trends will start to get worse and rates will have to go up. Now throw in the fact that most of the newly hired will be overweight, and have been very inactive in day to day work because of unemployment, I do not think the actuaries have models to make these predictions. I feel it spells a unpredicted bad comp lose ratios than anyone expected. As I have said in previous blog posts, the worse case scenario for business owners will be a violent reversal of increasing comp rates that will be practically unaffordable for small business. This is what I see in the near future. Small business be ready. Until next time be carefult out there and know your risks. K

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