Confronting the challenges of the workers comp market
The placement of Workers’ Compensation risks has grown more challenging for employers over the past year with the shrinking of the overall market and expected double-digit rate increases in 2013. Nationwide rates were up 2-5% in 2012 and , for 2013, carriers are citing the need for rates to increase an additional 12-18% in most states. Also, the Experience Modification system is being revised by the National Council on Compensation Insurance (NCCI) for the first time in 25 years. The new formula will switch the emphasis from Loss Frequency to a more even balance between Loss Frequency and Loss Severity. This change will produce both winners, and losers.
In preparation for these challenges, we have established a multilevel solution for employers to gain greater control over the overall cost of their Workers’ Compensation programs. By combining the disciplines of loss control, claims management and casualty market expertise, WGA has launched WC³ as a solution for what is likely to be a turbulent 3-5 year period for employers. The program helps find solutions to control overall costs while incorporating a focus on educating clients about the factors that drive cost and insurance program design for optimal results.
About the Author
Rich Leavitt is the Risk Management Practice Leader at WGA, where he works closely with the teams at large corporations and non-profit organizations to manage their risks.