Workers' Comp: A Resilient Industry Navigating Post-Pandemic Challenges

A Strong Foundation Before and After the Pandemic

The workers' compensation field has demonstrated remarkable adaptability in the face of economic shifts, as highlighted by Donna Glenn, Chief Actuary at the National Council on Compensation Insurance (NCCI). The pandemic introduced new occupational illnesses into the system, but this was counterbalanced by a reduction in other types of claims in 2020. Glenn's insights were shared during an Executive Exchange with Triple-I CEO Sean Kevelighan, where she noted the industry's robust position both before and after the pandemic, including seven years of underwriting profitability.

Labor Market Dynamics and Claim Frequency

Strong employment and wage growth are propelling the workers' compensation system forward. The resilience of the labor market is noteworthy. However, changing labor patterns are also influencing workers' comp claim frequency. Frequency declined in 2020 due to business shutdowns, but rebounded as workers returned to their jobs. Remote work, however, is contributing to a decrease in overall claim frequency, marking a new normal in the industry.

Medical Costs and Emerging Mental Health Concerns

While medical costs have been relatively stable, there is a growing concern about potential future spikes. Medical inflation, though, remains moderate compared to general inflation, thanks to regulatory measures such as medical fee schedules and treatment guidelines. The shift from hospital procedures to outpatient and ambulatory services is also aiding cost control. Additionally, the decrease in opioid use and increased focus on physical therapy are beneficial. However, Glenn warns of emerging mental health issues, particularly PTSD among first responders, emphasizing the need for comprehensive worker care.

For readers, it's crucial to stay informed about the evolving landscape of workers' compensation, including the impact of remote work on claim frequency and the potential rise in medical costs. Keeping abreast of industry trends and regulatory changes can help in making informed decisions and advocating for comprehensive worker care.