mega-trends influencing the workers compensation insurance industry 5th annual national workers’...

Mega-Trends Influencing the Workers Compensation

Insurance Industry

5th Annual National Workers’ Compensation Insurance ExecuSummit

New York, NY

February 5, 2008

Steven N. Weisbart, Ph.D., CLU, Vice President & Chief EconomistInsurance Information Institute 110 William Street New York, NY 10038

Tel: (212) 346-5540 Fax: (212) 732-1916 [email protected] www.iii.org

Six Mega-Trends to Watch

1. Falling Lost-Time Claim Frequency and Fatality Rates

2. A Shrinking Premium Base?3. Medical Claim Cost Inflation4. Indemnity Claim Cost Inflation5. The Aging Workforce6. The Obesity Epidemic

But First, Some Context:

Employment, Real Wages, and Workers Comp Experience

Total Private Employment Grew by26 Million Workers from 1991 to 2007

89.7

89.9 91

.7 94.9 97

.7 100.

1 103.

0 106.

0 108.

6

108.

8

108.

2

115.

7

110.

9 114.

1

111.

8

111.

0

109.

9

80

90

100

110

120

91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07

*Source: U.S. Bureau of Labor Statistics, at http://data.bls.gov/cgi-bin/surveymost

Millions (at mid-year)

Total private employment

rose 29%

Average Weekly Real Earnings in Private Employment Grew by 8.5% from 1991 to 2007

$259

.2

$257

.9

$258

.3

$260

.1

$258

.0

$260

.7 $264

.3

$271

.5 $276

.1 $279

.4

$279

.3

$281

.2

$275

.1

$277

.3

$276

.9

$275

.0

$276

.0

$250

$260

$270

$280

$290

91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07

*Source: U.S. Bureau of Labor Statistics, at http://data.bls.gov/cgi-bin/surveymost

(at mid-year)Constant 1982 dollars

Virtually all of the real wage growth occurred

between 1996 and 2002. Real weekly wages grew

0.6% from 1991-1996 and 0.6% from 2002-2007.

97.0

103.

0107.

0110.

0

110.

9

101.

4

97.0 99

.7

100.

7

107.

0

115.

3 118.

2 121.

795

100

105

110

115

120

125

1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006p

Combined Ratio

p Preliminary AY figure. Includes dividends to policyholdersAccident Year data is evaluated as of 12/31/2006 and developed to ultimateSources: Calendar Years 1994-2005, A.M. Best Aggregates & Averages; Calendar Year 2006p and Accident Years 1994-2006p based on NCCI Annual Statement Analysis.

Workers Comp Underwriting Results: A Tale of Two Trends

WC insurers lopped 25 points off the combined ratio in

just 5 years!

WC insurers added 25 points to the

combined ratio in just 6 years!

Pre-Tax Operating Gain Ratio (%)

13.5%

8.4%

4.4%

9.0%

-1.0%

-7.8%

1.3%

5.2%

13.9%

19.8%19.7%

12.7%

7.5%

-3.2%

-8.6%

-4.2%

17.9%

-15%

-10%

-5%

0%

5%

10%

15%

20%

25%

90* 91* 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06p

WC profitability is on the rise, but is it

sustainable? Hint: see 1998-2002.

Calendar Year

Percent

Investment Gains Have Improved Workers Comp Profitability

Source: NCCI

-25.0%

-20.0%

-15.0%

-10.0%

-5.0%

0.0%

5.0%

10.0%

15.0%

20.0%

25.0%

94 95 96 97 98 99 00 01 02 03 04 05 06p

Pre-Tax Operating Gain Ratio Adjusted Combined Ratio*

WC Investment Income Has Been Less Helpful Lately in Producing Profits

* Adjusted Combined Ratio (ACR) translates combined ratio into typical percentage terms. For example, a combined ratio of 107.0 becomes a -7.0% ACR. Source: NCCI

As u/w results strengthened, investment

results weakened, producing only a modest

operating gain ratio

Mega-Trend #1:

Falling Lost-Time Claim Frequency

and Falling Fatality Rates

Year over Year Change in Number of Lost-Time Claims

-4.2 -4.4

-6.9

-4.5 -4.1 -3.9

-6.8

-9.2

0.3

-6.5

-4.5

0.5

-3.9

-2.3

-4.5

-6.6

-10

-8

-6

-4

-2

0

2

91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06p

Accident Year

Percent Change

Workers Comp Lost-Time Claim Frequency Down Over 50% Since 1991

1991-2005: Based on data through 12/31/2005, developed to ultimate. 2006p: Preliminary based on data valued as of 12/31/2006.Based on the states where NCCI provides ratemaking services. Excludes the effects of deductible policiesSource: NCCI

Rate of Fatal Work InjuriesContinues to Drop

4.5

4.84.84.9

5.35.25.2

4.5

4.3 4.3

4.0 4.04.1

4.03.9

3.5

4.0

4.5

5.0

5.5

92 93 94 95 96 97 98 99 00 01 02 03 04 05 06pSource: US Bureau of Labor Statistics ; Insurance Information Institute.

Fatality rates are down 26.4% since 1994.

Fatal Work Injuries per 100,000 Workers

Number of Fatal Work Injuries Continues to Fall

6,05

56,23

8

6,20

2

6,27

5

6,63

2

6,33

1

6,21

7

6,05

4

5,92

0

5,91

5

5,53

4

5,57

5 5,76

4

5,73

4

5,70

3

5,000

5,200

5,400

5,600

5,800

6,000

6,200

6,400

6,600

6,800

92 93 94 95 96 97 98 99 00 01 02 03 04 05 06pSource: US Bureau of Labor Statistics, US Department of Labor; Insurance Information Institute.

The 14% decline in workplace fatalities since 1994 occurred despite the substantial growth in the size of

the labor force since then.

400

600

800

1000

1200

1400

1600

1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006

Struck by Object Falls Homicides Highway Incidents

Four Most Frequent Work-Related Fatal Events, 1992-

2006

Work-related homicides down

52% since 1994; in 2006 homicides

equal fatal “struck by object.

Source: US Bureau of Labor Statistics, US Department of Labor; Insurance Information Institute.

Highway Incidents

Work-related homicides

But Not All Mega-Trends are Favorable

Mega-Trend #2:

A Shrinking Premium Base?

$25.2 $24.2 $23.3 $22.3$25.0 $26.1

$29.2 $31.1$34.7

$37.8 $38.6

$3.0 $2.7 $2.6 $2.6$3.5

$5.7

$8.0$10.7

$11.3$7.2$9.5

$28.2$26.9 $25.8 $24.9

$28.4

$31.9

$37.3

$41.8

$45.9$47.2

$45.9

0

10

20

30

40

50

1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006p

State Funds ($ B)Private Carriers ($ B)

Competition, Slow Payroll Growth,Large Retentions, Growth of State Funds & Captives

Limit Private WC Premium Growth

Calendar Year

$ Billions

P=PreliminarySources: 1996–2005 Private Carriers, A.M. Best Aggregates & Averages; 2006p, NCCI 1996–2006p State Funds: AZ, CA, CO, HI, ID, KY, LA, MO, MT, NM, OR, RI, TX, UT Annual Statements

Total Workers Compensation Premium

Declined in 2006

-5%

0%

5%

10%

15%

20%

25%

1970

1971

1972

1973

1974

1975

1976

1977

1978

1979

1980

1981

1982

1983

1984

1985

1986

1987

1988

1989

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

E

Note: Shaded areas denote hard market periods.Source: A.M. Best, ISO, Insurance Information Institute

P/C NWP Growth is Cyclical;We’ve Seen Slow Growth Since 2004

1975-78 1984-87 2000-04

2007E is actual 9-month result.

2007: Premium growth through the first 9 months

of 2007 was 0%, the lowest reading since 1943

WC Rates Began Droppingin mid-2003

Source: Council of Insurance Agents & Brokers

WC Rates Have Retreated to Levels Last Seen in 2002

Source: Council of Insurance Agents & Brokers

WC – red line – has generally followed the

pattern for other commercial lines

WC rates– red line – have generally

followed the pattern for other commercial lines

Employers are Increasingly Accepting a Greater Share of Risk

1%

33%

43%

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

50%

1990 2000 2003Sources: National Council on Compensation Insurance; Insurance Information Institute.

The growing use of large deductibles is part of the explanation for decreased

claim frequency

Market Share of Plans with Large Deductibles

The Alternative-Risk-Transfer Market Draws WC Premiums from Traditional Carriers

Automobile, 12%

Property, 10%Workers Comp,

43%

Liability (excl. Auto), 35%

Source: MarketStance.

Workers Compensation accounts for the largest share of the alternative

market, particularly captives

Mega-Trend #3:

Medical Claim Cost Inflation

4.5%3.6%

2.8% 3.2% 3.5%4.1%

4.6% 4.7%4.0% 4.4% 4.2% 4.0%

5.1%

7.4%

10.1%

8.3%

10.6%

8.2%

14.0%

7.4%

9.0%

6.8%

11.7%

7.5%

0%

2%

4%

6%

8%

10%

12%

14%

16%

1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006

Change in Medical CPIChange Med Cost per Lost Time Claim

WC Medical Severity Rising Far Faster than Medical CPI

Sources: Med CPI from US Bureau of Labor Statistics, WC med severity from NCCI based on NCCI states.

3.5

pts

WC medical severity rose more than twice as fast as the medical CPI (8.8% vs. 4.0%)

from 1995 through 2006

$8.3 $8.4 $8.2$8.9 $9.4

$10.1$11.1

$12.0$13.3

$14.4

$16.4$17.6

$19.2$20.5

$22.9$24.6

$5

$10

$15

$20

$25

91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06p

Annual Change 1991–1996: +4.1%Annual Change 1997–2005: +9.5%

Accident Year

MedicalClaim Cost

($000)

2006p: Preliminary based on data valued as of 12/31/20061991-2005: Based on data through 12/31/2005, developed to ultimateBased on the states where NCCI provides ratemaking services; Excludes the effects of deductible policies

Workers Comp Medical Claim Costs Continue to Climb

Cumulative Change = +200%(1993-2006p)

Med Costs Share of Total Costs is Increasing Steadily

Indemnity55%

Medical45%

Source: NCCI (based on states where NCCI provides ratemaking services).

Indemnity52%

Medical48%

Indemnity41%

Medical59%1986

1996

2006p

WC Med Cost Will Equal 70% of Total by 2016 if Trends Hold

Source: Insurance Information Institute.

Indemnity30%

Medical70%

2016 EstimateIf this happens,

•claims severity will accelerate relative to today

•claims management will become more difficult and complex but even more important

Mega-Trend #4:

Indemnity Claim Cost Inflation

IndemnityClaim Cost (000s)

Cost of Lost-Time Claims

$9.9 $9.6 $9.4 $9.8 $10.0$10.6

$11.4$12.4

$13.6

$15.1$16.5$16.9

$17.7$18.0$18.6

$19.6

$5

$7

$9

$11

$13

$15

$17

$19

91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06p

Annual Change 1991–1996: +1.2%Annual Change 1997–2005: +6.6%

Source: NCCI 2005p: Preliminary based on data valued as of 12/31/20061991-2005: Based on data through 12/31/2005, developed to ultimate, from states where NCCI provides ratemaking services.Excludes the effects of deductible policies

Accident Year

Workers Comp Indemnity Claims Costs Have Accelerated, 1993-2006p

Cumulative Change = +108.5%(1993-2006p)

3.0%

4.3%5.0%

4.4%5.2%

4.4%

2.4%2.0%

2.4%2.8%

3.4%

5.9%

7.7%

9.0%

10.1%

4.8%

1.9%

3.0%

5.5%

3.0% 2.4%

9.7%10.9%

1.7%

0%

2%

4%

6%

8%

10%

12%

1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006p

Change in CPS Wage Change in Indemnity Cost per Lost-Time Claim

WC Indemnity Severity vs. Wage Inflation

2.1

pts

2006p: Preliminary based on data valued as of 12/31/2006; 1991-2005: Based on data through 12/31/2005, developed to ultimate. Based on the states where NCCI provides ratemaking services. Excludes the effects of deductible policies. CPS = Current Population Survey. Source: NCCI

WC indemnity severity is once again outpacing

wage inflation

Mega-Trend #5:

The Aging Workforce

US Population:2007 vs. 2025 Projection*

14,269

10,721

8,440

7,361

5,523

5,334

21,128

19,647

16,041

12,268

7,557

8,011

0 4,000 8,000 12,000 16,000 20,000 24,000

60 to 64

65 to 69

70 to 74

75 to 79

80 to 84

85 and over

2007 2025

Source: National Projections Program, Population Division, U.S. Census Bureau

*Using the Census Bureau’s Middle (i.e., most probable) projections

Population in each age group (in thousands)

There will be nearly as many

85+ people in 2025 as there are 70-74

today

How accurate are these forecasts?

278.0

288.3

299.0

270

275

280

285

290

295

300

1996 Forecast

Mil

lio

ns

of

Peo

ple

In 1996 the Census Bureau Projected the 2006 U.S. Population

Source: U.S. Bureau of the Census, (NP-T3-C) Population Projections Program, Population Projections of the Total Resident Population by 5-year age groups, middle series, released January 13, 2000.

Low Projection

Middle Projection

High Projection

270

275

280

285

290

295

300

1996 Forecast 2000 Forecast

Mil

lio

ns

of

Peo

ple

In 2000 the Census Bureau Increased

Its Middle Projection for 2006


Instead of Low, Middle, and High forecasts, future Census

Bureau projections will be probabilistic distributions.

Middle projection was raised from 288 million to 290 million.

250

260

270

280

290

300

1996 Forecast 2000 Forecast Actual 2006

Mil

lio

ns

of

Peo

ple

The Actual 2006 Population Exceeded the “High” 1996 and the “Middle” 2000 Projections


The actual 2006 population was just under 300

million

How Does This Mega-Trend Apply to Workers Compensation?

Quarterly Labor Force Participation Rate, Ages 65-69, 1998-2007

25.2

%

25.2

%

26.3

%

26.5

%

26.2

%

27.9

%

27.2

%

27.4

% 27.9

%

27.3

%

27.8

%

27.6

%

26.8

% 27.6

%

29.3

%

29.5

%

27.9

% 28.5

%

28.7

%

30.8

%

29.3

% 30.1

%

29.1

%

27.0

%

22.9

%

23.0

%

22.8

%

23.0

%

22.3

%

22.5

%

22.1

%

23.5

% 24.4

%

24.4

%

24.3

% 24.9

%

24.4

%

24.4

%

24.8

%

20.0%

22.0%

24.0%

26.0%

28.0%

30.0%

32.0%


The labor force participation rate for workers 65-69 might grow even faster in the future as seniors find they

can’t fully retire on their meager retirement savings.

Labor Force participation rate

Quarterly Labor Force Participation Rate, Ages 70-74, 1998-2007

14.2

%

13.8

%

14.2

%

14.0

%

14.0

%

14.4

%

14.4

% 14.9

%

14.9

% 15.4

%

15.6

%

15.3

%

16.4

% 17.0

%

15.8

%

16.2

% 16.7

%

16.9

%

17.2

%

17.0

%

16.7

%

16.8

%

18.0

%

14.6

%

13.1

%13.6

%

12.4

%12.9

%

12.4

%

12.2

%

12.5

% 13.1

%

13.3

%

13.5

%

13.6

%

13.8

% 14.4

%

13.7

% 14.2

%

10.0%

12.0%

14.0%

16.0%

18.0%

20.0%


The labor force participation rate for workers 70-74 has grown by about 50% since 1998. It too might grow even faster in the future as seniors find they

can’t fully retire on their meager retirement savings.

Labor Force participation rate

Why Elderly Stop Working, byAge Group: 2002

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

55-59 60-64 65-69 70-74 75-79 80+

Poor Health More Time With Family

Wanted To Do Other Things Didn't Like Work

Source: Growing Older in America, US Department of Health and Human Services, p 47.

Percent whostop working

Age 80+ workers not retiring due to poor health!

Older Workers Have More Lost Time from Work Due to Injury or Illness

1211

10

8

6

44

0

2

4

6

8

10

12

14

16-19 20-24 25-34 35-44 45-54 55-64 65+

Source: US Bureau of Labor Statistics, US Department of Labor

There will be more lost time as the

workforce ages in the future.

Median Days Away From Work (2005)

Age 65+ workers median lost time is 50% greater than workers age 35-44

Distribution of Non-Fatal Work Injury Days AwayFrom Work, by Length of Period and Age group,

Ages 45 and over, 2005

38.8

%

11.6

%

20.5

%

30.2

%

32.5

%

15.3

%

17.7

%

34.5

%

28.4

%

19.1

%

12.3

%

40.3

%

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

1-5 days 6-10 days 11-30 days 31+ days

Ages 45-54Age 55-64Age 65 and over

Source: US Bureau of Labor Statistics, US Department of Labor, Table 8 from 2005 Survey of Nonfatal Occupational Injuries and Illnesses Requiring Days Away from Work, Revised data released 11-17-2006.

Percentage of cases

Workers 65+ more likely to be out a month or more

Workers 65+ more likely to

be out two weeks than one

Fatal Work Injury RatesClimb Sharply With Age

4.94.03.63.2

2.72.7

0.8

10.8

0

2

4

6

8

10

12

16-17 18-19 20-24 25-34 35-44 45-54 55-64 65+


The fatality rate for workers 65 and older is triple that of workers age 35-44. The workplace of the future will have to be completely redesigned to accommodate the

surge in older workers.

Fatal Work Injuries per 100,000 Workers (2006)

No Help from Medicare …

Medicare law has long specified that

• If Workers Compensation is available, Medicare will pay nothing,

• Medicare will pay if costs remain after all WC medical benefits are exhausted, and

• If Medicare does pay a bill, it has a right of recovery from the employer or WC insurer.

Workers Compensationand Medicare

Source: Title 42 Code of Federal Regulations, Section 411 et seq.

and Maybe a Fight from Medicare

Medicare is worried that, for workers who are covered by, or eligible for, Medicare, it will be stuck with costs shifted from those responsible for paying WC costs.

So, in those cases,

• It wants to review, and maybe disapprove, Workers Compensation settlements, if it believes there is insufficient WC money to pay for future medical costs,

• This may align Medicare with workers against employers and WC insurers

• This will increase WC administration costs

Workers Compensationand Medicare

Effect on WC Claims of Social Security Retirement Income

When a SS DI recipient reaches the “full benefit” retirement age, the DI benefit becomes a retirement benefit

• Social Security Retirement Income is not offset for WC indemnity paymentsSo disabled workers age 66 and over can collect both – moral

hazard?

Workers Compensation andSocial Security

Mega-Trend #6:

The Obesity Epidemic

Definitions:• Obesity

Having a very high amount of body fat in relation to lean body mass

Body Mass Index of 30 or higher

• Body Mass Index (BMI) A measure of an adult’s weight in relation to his or her

height,Specifically, the adult’s weight in kilograms divided by the

square of his or her height in meters

What Do We Mean by “Obesity”and How Do We Measure It?

Note: This slide and the next 23 slides are courtesy of the Centers for Disease Control and Prevention.

Obesity Trends* Among U.S. AdultsBRFSS, 1985

(*BMI ≥30, or ~ 30 lbs. overweight for 5’ 4” person)

No Data <10% 10%–14%

BRFSS is the CDC’s Behavioral Risk Factor Surveillance System. Each year, state health

departments use standard procedures to collect data through a series of monthly telephone interviews with U.S. adults.

Not a complete picture; many states didn’t provide data

then.



No Data <10% 10%–14%



No Data <10% 10%–14% 15%–19%



No Data <10% 10%–14% 15%–19% ≥20%



No Data <10% 10%–14% 15%–19% 20%–24% ≥25%



No Data <10% 10%–14% 15%–19% 20%–24% 25%–29% ≥30%

1998

Obesity Trends* Among U.S. AdultsBRFSS, 1990, 1998, 2006

(*BMI 30, or about 30 lbs. overweight for 5’4” person)

2006

1990

No Data <10% 10%–14% 15%–19% 20%–24% 25%–29% ≥30%

BMI Categories• Underweight: BMI <18.5• Healthy Weight: BMI=18.5-24.9• Overweight: BMI=25.0-29.9• Obese

Class I BMI=30.0-34.9Class II BMI=35.0-39.9Class III BMI>40.0

For Analysis Purposes,We Create BMI Categories

The Most Obese Workers (BMI=40+)File Twice as Many WC Claims

as Healthy-Weight (BMI=18.5-25) Workers

40.9760.17

75.21

14.19

183.63

117.61

5.53 5.807.05

10.80

8.81

11.65

0

20

40

60

80

100

120

140

160

180

200

BMI <18.5(Underweight)

18.5-24.9(HealthyWeight)

25-29.9(Overweight)

30-34.9 (ObeseClass I)

35-39.9 (ObeseClass II)

40+ (ObeseClass III)

Los

t W

ork

day

s p

er 1

00 F

TE

s

0

2

4

6

8

10

12

14

Cla

ims

per

100

FT

Es

Lost Workdays Claims

Source: Ostbye, T., et al, “Obesity and Workers Compensation,” Archives of Internal Medicine, April 23, 2007.

The most obese have 13 times more lost workdays

than healthy weight workers!

WC Medical Claims Costs are 6.8x Higher for the Most Obese Workers

$7,1

09

$13,

338

$19,

661

$3,9

24

$5,3

96 $13,

569

$34,

293

$7,5

03

$51,

091

$23,

373

$23,

633

$59,

178

$0

$10,000

$20,000

$30,000

$40,000

$50,000

$60,000

$70,000

BMI <18.5(Underweight)

18.5-24.9(Healthy Weight)

25-29.9(Overweight)

30-34.9 (ObeseClass I)

35-39.9 (ObeseClass II)

40+ (ObeseClass II)

Medical Claims Costs Indemnity Claims Costs

Source: Ostbye, T., et al, “Obesity and Workers Compensation,” J. of the American Medical Association, April 23, 2007.

Indemnity costs are 11 times higher for the most obese workers than for healthy-

weight workers.

Not a Mega-Trend Yet, but …

Other things to keep aware of

Regulatory Concerns

• McCarran-Ferguson Narrowing could be harmful to WC rating bureaus and smaller

insurers who rely most heavily on advisory loss cost information

• Health Care Reform Déjà Vu—1992 Health Care reform will be a major theme in 2008 elections as in 1992 Back in 1992, it was proposed that workers comp would be rolled into

the general health care system This could happen again Insurers back then fretted about the “Medical Indemnity Disconnect”

The Terrorism Risk Insurance Program Reauthorization Act of 2007

• 7-Year Extension, expiring 12/31/14• Keeps Federal government’s cap at $100 billion• Keeps 20% Direct Earned Premium Deductible (about $35B)• Eliminates

distinction between foreign and domestic acts of terrorism requirement that terrorist act be on behalf of foreign person or foreign

interest Changes in definition of terrorist act require substantial rate and form

filings in states• Requires Comptroller General to issue report within 180 days on

obstacles in development of private sector market for terror insurance

• NBCR NBCR risks remain excluded Requires Comptroller General to issue report within 1 year on feasibility of

NBCR insurance market

Source: Insurance Information Institute

Insured Loss Estimates: Large NBCR Terrorist Attack ($ Bill)

Type of Coverage New York WashingtonSan

FranciscoDes

Moines

Group Life $82.0 $22.5 $21.5 $3.4

General Liability 14.4 2.9 3.2 0.4

Workers Comp 483.7 126.7 87.5 31.4

Residential Prop. 38.7 12.7 22.6 2.6

Commercial Prop. 158.3 31.5 35.5 4.1

Auto 1.0 0.6 0.8 0.4

TOTAL $778.1 $196.8 $171.2 $42.3

Source: American Academy of Actuaries, Response to President’s Working Group, Appendix II, April 26, 2006.

Summary

• Workers Compensation Has Benefited from Favorable Underlying Claims Trends, but this might not continue

• WC Premium Trends have followed the trend for Commercial Insurance generally

• Trends in Medical and Indemnity Cost are Worrisome

• The Aging of the Population and the Obesity Epidemic could cause WC claims to explode

• Q & A

Insurance Information Institute On-Line

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