Perfect Storm Against Work Comp Profitability

I just finished a conversation with one of my marketing reps from a leading national carrier and he was complaining about their 140% combined work comp loss ratio. We both agreed that the rates are too low, and have been too low for years to absorb any uptick in claims frequency. Well, as the industry is now experiencing, work comp claim frequency is increasing. I see it as a perfect storm brewing against any potential profitability in work comp. Low rates, safety program cutbacks due to the recession, and out of shape work force, and  a recession that has businesses struggling to survive.  The industry knows that work comp can be an never ending claim, however this experience was thrown out the door during the soft market. Work comp rates fell across the country and in some States as nuch as 30-50%. Now the industry is faced with  claims it has to pay from rates that were not adequate to cover the losses. I know this means change is coming so" hold onto your hat brother".  Until next time be careful out there and know your risks. K

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