Trends Affecting the Workers Compensation

SystemWorkers Compensation Bottom Line Solutions--Revisited

AMCOMP Workers Compensation SeminarNew York, NY

September 12, 2013

Steven N. Weisbart, Ph.D., CLU, Senior Vice President & Chief EconomistInsurance Information Institute 110 William Street New York, NY 10038Office: 212.346.5540 Cell: (917) 494-5945 stevenw@iii.org www.iii.org

2

Real GDP Growth, 1997-2012:New York State vs. U.S.

Sources: US Department of Commerce, Bureau of Economic Analysis; Insurance Information Institute.

100

110

120

130

140

150

1997 1998 1999   2000      2001      2002      2003      2004      2005      2006   2007 2008 2009 2010 2011 2012

New York State US

Since 1997, New York State’s economy grew at a similar paceto the U.S. overall, lagging slightly since the 2001 recession.

Index(1997=100)

+40.3% since 1997

+36.4% since 1997

3

NY State Has Recouped the Jobs Lost in the Great Recession

8300

8400

8500

8600

8700

8800

8900Ja

n 0

2

Jan

03

Jan

04

Jan

05

Jan

06

Jan

07

Jan

08

Jan

09

Jan

10

Jan

11

Jan

12

Jan

13

Data are Seasonally Adjusted, total nonfarm employedSource: US Bureau of Labor Statistics; Insurance Information Institute.

Pre-recession peak 8.814 million employed

in June 2008

In the last 4 years, New York State added 355,700 jobs.However, the unemployment rate is still too high, at 7.48%.

3

Thousands Employed

Employment trough: 8.532 million jobs in June 2009, a

loss of 282,200 jobs from peak

Latest: 8.882 million

employed in July 2013

New peak8.899

million employed in

May 2013

4

Unemployment Improvement Stalled in NY from Apr 2011 to Apr 2013, but Has Resumed

4

5

6

7

8

9

10

Jan02

Jan03

Jan04

Jan05

Jan06

Jan07

Jan08

Jan09

Jan10

Jan11

Jan12

Jan13

US

NY State

Sources: US Bureau of Labor Statistics; Insurance Information Institute.

NY’s July 2013 unemployment rate was 7.48%, about

the same as the US (7.39%)

January 2002 through July 2013

Recession began in

December 2007

NY State’s unemployment rate was lower than the U.S. from 2005-2012.

4

Seasonally Adjusted (%)

5

Unemployment Rates in NY State Metropolitan Areas, July 2013*

7.9%

6.1%5.6%

7.7%

8.7%

7.1% 7.0%7.4% 7.4%7.4% 7.5%

6.4%

7.6% 7.4%

5%

6%

7%

8%

9%

US

NY

Sta

te

Alb

any

Bin

gham

ton

Buf

falo

Elm

ira

Gle

ns F

alls

Ithac

a

Kin

gsto

n

New

Yor

k C

ity

Pou

ghke

epsi

e

Roc

hest

er

Syr

acus

e

Utic

a-R

ome

Unemployment Rate (%)

*Most recent available. Data are preliminary and are not seasonally adjusted.Sources: U.S. Bureau of Labor Statistics; Insurance Information Institute.

6

Nonfarm Payroll (Wages and Salaries):Quarterly, 2005–2013:Q2

Note: Recession indicated by gray shaded column. Data are seasonally adjusted annual rates.Sources: http://research.stlouisfed.org/fred2/series/WASCUR; National Bureau of Economic Research (recession dates); Insurance Information Institute.

Billions05

:Q1

05:Q

2

05:Q

3

05:Q

4

06:Q

1

06:Q

2

06:Q

3

06:Q

4

07:Q

1

07:Q

2

07:Q

3

07:Q

4

08:Q

1

08:Q

2

08:Q

3

08:Q

4

09:Q

1

09:Q

2

09:Q

3

09:Q

4

10:Q

1

10:Q

2

10:Q

3

10:Q

4

11:Q

1

11:Q

2

11:Q

3

11:Q

4

12:Q

1

12:Q

2

12:Q

3

12:Q

4

13:Q

1

13:Q

2$5,500

$5,750

$6,000

$6,250

$6,500

$6,750

$7,000

$7,250

Prior Peak was 2008:Q3 at $6.54 trillion

Latest (2013:Q2) was $7.09 trillion, a new peak--$860B above

2009 trough

Recent trough (2009:Q1) was $6.23 trillion, down

4.8% from prior peak

Payrolls are 13.8% above

their 2009 trough and up 3.1% over

the past year

6

7

Occupational Deaths, 1992–2012: Still Falling or Have We Reached a Plateau?

92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 124,000

5,000

6,000

7,000

6,2

17

6,3

31 6,6

32

6,2

75

6,2

02

6,2

38

6,0

55

6,0

54

5,9

20

5,9

15

5,5

34

5,5

75

5,7

64

5,7

34

5,8

40

5,6

57

5,2

14

4,5

51

4,6

90

4,6

93

4,3

83

Source: U.S. Bureau of Labor Statistics, National Census of Fatal Occupational Injuries in 2012 (Preliminary Results), released August 22, 2013, and previous reports.

The death rate per 100,000 full-time-equivalent workers was 3.5 in 2009,3.6 in 2010, 3.5 in 2011, and (preliminary result) 3.2 in 2012.

Includes multiple deaths in Upper Big Branch coal mine and Deepwater

Horizon oil rig

Number of Fatal Injuries

8

Private Industry: Fewer Injuries & Illnesses with Days Away from Work

2003 2004 2005 2006 2007 2008 2009 2010 20110

200,000

400,000

600,000

800,000

1,000,0009

08

,31

0

85

0,9

30

84

0,5

80

80

3,0

60

80

9,4

20

76

6,2

50

72

3,6

80

71

0,1

70

68

4,3

90

40

7,6

10

40

8,4

00

39

4,0

90

38

0,4

40

34

9,4

50

31

1,8

90

24

1,3

10

22

3,0

20

22

3,9

20

service-producing goods-producing

Source: U.S. Bureau of Labor Statistics, National Occupational Injuries and Illnesses Requiring Days Away from Work, 2011, Table 1, released November 8, 2012.

The number of illnesses and injuries dropped from 2003 to 2007 despite growth in employment and the aging of the workforce.

The drop continued through the Great Recession and into the recovery.

Goods-producing, 2011 vs. 2003: down 45.1%

Service-producing, 2011 vs. 2003: down 24.7%

Number

WC Characteristics

99

NY State Workers CompensationDPW, 2001–2012

$2.01 $2.00 $1.96

$3.44 $3.42$3.62

$4.16

$4.76

$3.50$3.76

$4.13 $4.23

$1.0

$1.5

$2.0

$2.5

$3.0

$3.5

$4.0

$4.5

$5.0

01 02 03 04 05 06 07 08 09 10 11 12

WC premium volume in NY State has recoveredfrom a 19% drop during the financial crisis/soft market.

The gain in 2012 alone was 14.4%.

Sources: SNL Financial; Insurance Information Institute. 10

$ Billions

11

Return on Net Worth, 2002-2011,Workers Comp: NY vs. U.S.

NY RNW for the period 2002-2011 is 5.0%Sources: NAIC, Report on Profitability by Line by State in 2011, p. 284

2.4%

6.9%

10.1%9.6% 10.0%

9.0%

5.1%4.2% 3.9%

6.2%8.1%

9.9%

8.4%

5.9% 6.2%6.8%

1.4%0.6%

0.1%

3.1%

-2%

0%

2%

4%

6%

8%

10%

12%

02 03 04 05 06 07 08 09 10 11

US WComp NY WComp(Percent)

Since 2004, WC has been a less profitable line in New Yorkthan in the nation overall.

12

Workers CompReturn on Net Worth, 2011

ND

WY

OH

WA

NV

AR

WV FL

TX

NH HI

MA

VA

AK

MT IN KY

CA

MO

NE

SD MI

PA

AZ

AL

US

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

50%37

.4%

27.9

%

23.5

%

18.4

%

14.0

%

13.2

%

13.1

%

12.3

%

11.0

%

9.9%

8.9%

8.7%

8.4%

8.2%

7.9%

7.5%

7.5%

7.4%

7.4%

7.3%

7.3%

7.1%

7.1%

6.6%

6.4%

6.2%

Sources: NAIC; Insurance Information Institute

Top 25 States

Nine states posted double-digit profits in WC in 2011

13

Workers CompReturn on Net Worth, 2011

US

UT

GA

MN

TN

OR

ME

MS RI

NM CT

NJ

NC IL

MD

NY

SC WI

IA VT

LA

KS

CO

OK ID DE

-20%

-10%

0%

10%

20%

30%

40%

50%

6.2%

6.3%

6.1%

6.0%

5.6%

5.5%

5.0%

4.9%

4.5%

4.3%

4.0%

3.9%

3.8%

3.5%

3.1%

3.1%

2.8%

2.7%

2.6%

2.6%

2.5%

1.8%

1.1%

0.8%

-0.7

%

-4.7

%

Bottom 25 States

In 2011, in 15 states the Return on Net Worth

was under 4%

Sources: NAIC; Insurance Information Institute

In 2011, in NY, the Return on Net Worth

was 3.1%

Workers Compensation Combined Ratio: 1994–2012F

94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12F90

95

100

105

110

115

120

125

130

10

2.0

97

.0

10

0.0

10

1.0

10

7.0

11

5.3

11

8.2

12

1.7

11

2.6

10

8.6

10

5.1

10

2.7

98

.5

10

3.6

10

4.6

11

0.4

11

6.6

11

7.1

11

6.0

Workers Comp underwriting resultsare the worst they have been in a decade.

Sources: A.M. Best; Insurance Information Institute. 14

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013:1H

0%

1%

2%

3%

4%

5%

6%

7%

8%

9%

10%

4.7%

4.0%4.4% 4.2% 4.0%

4.4%

3.7%3.2% 3.4%

3.0%

3.7%

2.7%

8.8%

7.7%

5.4%

7.8%

5.4%

6.3%6.6%

4.1%

1.4%

3.6%

3.0%

Change in Medical CPI

Change Med Cost per Lost Time Claim

WC Medical Severity Typically RisesFaster Than the Medical CPI Rate

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

The average annual growth in WC medical severity from 2002 through 2008 was over 6% vs. the medical CPI (about 4%), which

itself was higher than the overall CPI

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

p100

110

120

130

140

101.1103.8

108.3

112.1

117.4

122.8

126.1127.5

130.4

134.2136.9

103.1

105.8 104.9

111.7

118.4124.6

133.6

127.0

123.6

133.3

135.5

Change in Median Usual Weekly EarningsChange in Indemnity Cost per Lost-Time Claim

WC Indemnity Severity Generally Tracks Average Wages, 2002-2012p

2012p: Preliminary based on data valued as of 12/31/2012; 1991-2011: Based on data through 12/31/2011, developed to ultimate. Based on the stateswhere NCCI provides ratemaking services. Excludes the effects of deductible policies.Sources: NCCI, BLS, from Current Population Survey

Index (2001=100)

A Growing Exposure Base,but with a Different Mix of Risks

17

Health Care, Education, Services Will Lead

Jan-

11

Feb

-11

Mar

-11

Apr

-11

Ma

Jun-

11

Jul-1

1

Aug

-11

Sep

-11

Oct

-11

Nov

-11

Dec

-11

Jan-

12

Feb

-12

Mar

-12

Apr

-12

Ma

Jun-

12

Jul-1

2

Aug

-12

Sep

-12

Oct

-12

Nov

-12

Dec

-12

Jan-

13

Feb

-13

Mar

-13

Apr

-13

Ma

Jun-

13

Jul-1

3

Aug

-13

0

50

100

150

200

250

300

350

69

19

6

20

5

30

4

11

5

20

9

78

13

2

22

5

16

6

17

4

23

0

31

1

27

1

20

5

11

2 12

5

87

15

3 16

5

13

8 16

0

24

7

21

9

14

8

33

2

14

2

19

9

19

5

17

2

10

4

16

9

Monthly Change in Nonfarm Employment, 2011 - 2013

Thousands

The pace of job growth does not appear to be picking up, although there is obviously considerable variability.

*Seasonally adjusted. August 2013 and July 2013 are preliminary data. 2013 average is January-AugustSources: US Bureau of Labor Statistics; Insurance Information Institute 18

Average Monthly Gain2011: 175,300 2012: 182,800 2013*: 182,600

19

U.S. Employment in ManufacturingMonthly, 1990–2013*

*As of August 2013 (Jul 2013 and Aug 2013 are preliminary); Seasonally adjustedNote: Recessions indicated by gray shaded columns.Sources: US Bureau of Labor Statistics; National Bureau of Economic Research (recession dates); Insurance Information Institutes.

Millions

1/

9/

5/

1/

9/

5/

1/

9/

5/

1/

9/

5/

1/

9/

5/

1/

9/

5/

1/

9/

5/

1/

9/

5/

1/

9/

5/

1/

9/

5/

1/

9/

5/

1/

9/

5/11

12

13

14

15

16

17

18

Recent low point (Jan. 2010) was 11.46 million,

down 16.6% from start of recession (Dec 2007)

Latest was 11.963 million

20

U.S. Employment in ConstructionMonthly, 1990–2013*

*As of August 2013 (Jul 2013 and Aug 2013 are preliminary); Seasonally adjustedNote: Recessions indicated by gray shaded columns.Sources: US Bureau of Labor Statistics; National Bureau of Economic Research (recession dates); Insurance Information Institutes.

Millions

1/

9/

5/

1/

9/

5/

1/

9/

5/

1/

9/

5/

1/

9/

5/

1/

9/

5/

1/

9/

5/

1/

9/

5/

1/

9/

5/

1/

9/

5/

1/

9/

5/

1/

9/

5/4.0

4.5

5.0

5.5

6.0

6.5

7.0

7.5

8.0

It often takes a long time after a recession for

construction employment to surpass its pre-recession level

Peak was 7.7 million in Aug 2006

Latest (Aug 2013) was 5.8 million

21

U.S. Employment in Service Industries, Private Sector, Monthly, 1990–2013*

*As of August 2013; Seasonally adjusted; July 2013 and Aug 2013 are preliminaryNote: Recessions indicated by gray shaded columns.Sources: US Bureau of Labor Statistics; National Bureau of Economic Research (recession dates); Insurance Information Institutes.

Millions

1/

9/

5/

1/

9/

5/

1/

9/

5/

1/

9/

5/

1/

9/

5/

1/

9/

5/

1/

9/

5/

1/

9/

5/

1/

9/

5/

1/

9/

5/

1/

9/

5/

1/

9/

5/65

70

75

80

85

90

95

100

Recent low point (Oct 2009) was 89.171 million

Latest (Aug 2013) was

95.664 million, a new peak

Previous peak was 93.721 million

(Jan 2008)

22

U.S. Employment in Health Care & Social Services, Monthly, 1990–2013*

*As of Aug 2013 (Jul 2013 and Aug 2013 are preliminary); Seasonally adjustedNote: Recessions indicated by gray shaded columns.Sources: US Bureau of Labor Statistics; National Bureau of Economic Research (recession dates); Insurance Information Institutes.

Millions

1/

9/

5/

1/

9/

5/

1/

9/

5/

1/

9/

5/

1/

9/

5/

1/

9/

5/

1/

9/

5/

1/

9/

5/

1/

9/

5/

1/

9/

5/

1/

9/

5/

1/

9/

5/9

12

15

18 Employment in the health care and social service sectors grew in virtually every month for the

last 22 years, unaffected by recessions…

Cumulative growthover 23 years

(through 2012) : 89.5%

…and this growth is

expected to continue

indefinitely

Low Investment Returns

23

24

U.S. Treasury Security Yields*:A Long Downward Trend, 1990–2013

*Monthly, constant maturity, nominal rates, through August 2013.Sources: Federal Reserve Bank at http://www.federalreserve.gov/releases/h15/data.htm. National Bureau of Economic Research (recession dates); Insurance Information Institutes.

0%

1%

2%

3%

4%

5%

6%

7%

8%

9%

1/3

1/1

99

0

1/3

1/1

99

1

1/3

1/1

99

2

1/3

1/1

99

3

1/3

1/1

99

4

1/3

1/1

99

5

1/3

1/1

99

6

1/3

1/1

99

7

1/3

1/1

99

8

1/3

1/1

99

9

1/3

1/2

00

0

1/3

1/2

00

1

1/3

1/2

00

2

1/3

1/2

00

3

1/3

1/2

00

4

1/3

1/2

00

5

1/3

1/2

00

6

1/3

1/2

00

7

1/3

1/2

00

8

1/3

1/2

00

9

1/3

1/2

01

0

1/3

1/2

011

1/3

0/2

01

2

1/3

1/2

01

3

Recession2-Yr Yield10-Yr Yield

Yields on 10-Year U.S. Treasury Notes have been essentially below 5% for a full decade.

Since roughly 80% of P/C bond/cash investments are in 10-year or shorter durations, most P/C insurer portfolios will have low-yielding bonds for years to come.

U.S. Treasury security yields

recently plunged to record lows

24

25

Distribution of Bond Maturities,P/C Insurance Industry, 2003-2012

16.0%

15.2%

15.7%

16.2%

16.3%

29.8%

29.2%

28.8%

29.5%

30.0%

32.4%

36.2%

39.5%

41.4%

40.4%

31.3%

32.5%

34.1%

34.1%

33.8%

31.2%

28.7%

26.7%

26.8%

27.6%

15.4%

15.4%

13.6%

13.1%

12.9%

12.7%

11.7%

11.1%

10.3%

9.8%

9.2%

7.6%

7.6%

7.4%

8.1%

8.1%

7.3%

6.4%

6.3%

5.7%16.5%

15.2%

14.4%

16.0%

15.4%

0% 20% 40% 60% 80% 100%

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

Under 1 year

1-5 years

5-10 years

10-20 years

over 20 years

Sources: SNL Financial; Insurance Information Institute.

The main shift over these years has been from bonds with longer maturities to bonds with shorter maturities. The industry first trimmed its holdings of over-10-year bonds

(from 24.6% in 2003 to 15.5% in 2012) and then trimmed bonds in the 5-10-year category (from 31.3% in 2003 to 27.6% in 2012) . Falling average maturity of the P/C industry’s bond portfolio is contributing to a drop in investment income along with lower yields.

Inflation-Adjusted P/C Industry Investment Gains: 1994–2012F1

$54.8

$64.5

$69.1

$74.8

$57.6

$45.9

$56.5$59.4

$69.8

$63.4

$70.9

$33.8

$42.0

$56.2 $57.4$53.9

$81.7

$71.5$75.9

$30

$60

$90

94 95 96 97 98 99 00 01 02 03 04 05* 06 07 08 09 10 11 12F

In 2012 (1st three quarters) both investment income and realized capital gains were lower than in the comparable period in 2011. And because the Federal Reserve Board aims to keep interest rates exceptionally low until the unemployment rate hits 6.5%—likely at

least another year off—maturing bonds will be re-invested at even lower rates.

1Investment gains consist primarily of interest, stock dividends and realized capital gains and losses.*2005 figure includes special one-time dividend of $3.2B; 2012F figure is I.I.I. estimate based on annualized actual 2012:Q3 result of

$38.089B. Sources: ISO; Insurance Information Institute.

($ Billions, 2012 dollars) Average yearly gain: $60.85B.

We haven’t hit that average in the last 5 years.

The Aging Workforce

27

Labor Force Participation Rate, Ages 65-69, Quarterly, 1998:Q1-2013:Q21998.1

1998.3

1999.1

1999.3

2000.1

2000.3

2001.1

2001.3

2002.1

2002.3

2003.1

2003.3

2004.1

2004.3

2005.1

2005.3

2006.1

2006.3

2007.1

2007.3

2008.1

2008.3

2009.1

2009.3

2010.1

2010.3

2011.1

2011.3

2012.1

2012.3

2013.1

20%

22%

24%

26%

28%

30%

32%

34%

22.1%

22.5%

22.3% 23.0%

22.8%

23.0%

22.9% 23.5% 24.4%

24.4%

24.3% 24.9%

24.4%

24.4%

24.8%

25.2%

25.2%26.3%

26.5%

26.2%

27.9%

27.2%

27.0%

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%30.3%

30.1% 30.9%

31.0%

30.7%

31.0%

31.4%

30.9%

31.2%

31.6%

31.3%

31.5%

31.4%32.8%

32.3%

31.1%32.2%

32.2%

32.5%

31.8%

31.8%

31.7%32.9%

Not seasonally adjusted. Sources: US Bureau of Labor Statistics, US Department of Labor; Insurance Information Institute.

The brown bars indicate recessions.

Labor Force participation rate

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.

1 in 3 in this age group are working. Virtually

none of them are “baby boomers”

Labor Force Participation Rate,Ages 70-74, Quarterly, 1998:Q1-2013:Q2

19

98

.1

19

98

.3

19

99

.1

19

99

.3

20

00

.1

20

00

.3

20

01

.1

20

01

.3

20

02

.1

20

02

.3

20

03

.1

20

03

.3

20

04

.1

20

04

.3

20

05

.1

20

05

.3

20

06

.1

20

06

.3

20

07

.1

20

07

.3

20

08

.1

20

08

.3

20

09

.1

20

09

.3

20

10

.1

20

10

.3

20

11

.1

20

11

.3

20

12

.1

20

12

.3

20

13

.1

9%

12%

15%

18%

21%

12.5%

12.2%

12.4% 12.9%

12.4%

13.6%

13.1%

13.1%

13.3%

13.5%

13.6%

13.8% 14.4%

13.7% 14.2%

14.2%

13.8%14.2%

14.0%

14.0%14.4%

14.4%

14.6%

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%

17.5%

17.3%

16.9%

18.6%

18.2%

17.7%

17.9%18.9%

19.2%

18.0%

18.1%

17.4%18.4%

18.0%18.4%19.3%

19.5%

19.2%

19.1% 19.9%

19.6%

18.8% 19.3%

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

Labor Force participation rate

The labor force participation rate for workers 70-74 grew by about 50% since 1998.Growth stalled during and after the Great Recession but has since resumed.

Nearly 1 in 5 in this age group is working.

A dozen years ago it was 1 in 8.

30

Fatality Rates Improved Slightly Since2006 but Still Climb Sharply With Age

2.8

2.7 3.

3 3.7 4.

2

5.0

11.2

2.6 3.

0 3.1 3.4 4.

1 4.6

10.2

2.4 2.6 2.7 3.

2 3.7

4.5

12.2

2.5

2.4

2.4 3.

0 3.6 4.

3

12.1

2.8

2.2 2.

7 2.9 3.

6

4.7

11.9

3.0

2.5

2.4

3.8 4.

4

11.0

2.9

0

2

4

6

8

10

12

14

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

200620072008200920102011

Source: US Bureau of Labor Statistics, at http://www.bls.gov/iif/oshcfoi1.htm/#2010

The fatality rate for workers 65 and older was 5 times that of workers age 25-34. The workplace of the future will have to

be completely redesigned to accommodate the surge in older workers.

Fatal Work Injury Rate per 100,000 full-time-equivalent workers No improvement in

fatal work injury rate for this age group

31

Older Workers Lose More Daysfrom Work Due to Injury or Illness

20-24 25-34 35-44 45-54 55-64 65+0

2

4

6

8

10

12

14

16

5 6

9 10

12

15

56

9

1112

13

56

8

10

13

15

56

9

12

14 14

2008 2009

2010 2011

Source: US Bureau of Labor Statistics, Nonfatal Occupational Injuries and Illnesses Requiring Days Away From Work, 2011 (Table 10), released November 8, 2012.

Median Days Away From Work

Youngest baby boomer is age 48 (in 2013)

Median lost time of workers age 65+ is 2-3X that of workers age 25-34

Oldest baby boomer is age 67 (in 2013)

32

Older Workers Are MuchMore Likely to Break a Bone

20-24 25-34 35-44 45-54 55-64 65+0

2

4

6

8

10

12

14

16

18

6.7 7.8 7.4

9.9

13.4

15.3

3.1 3.7 4.0 4.35.9 6.4

Fractures Multiple Traumatic Injuries

*per 10,000 full-time-equivalent workersSource: US Bureau of Labor Statistics, US Department of Labor at http://www.bls.gov/news.release/pdf/osh2.pdf Table 14

Incidence Rate* (2011)

33

Older Workers Are More Likely to Slip When Walking, but Less Likely to Overexert Themselves

20-24 25-34 35-44 45-54 55-64 65+0

10

20

30

40

50

60

9.9

10

.5

11

.4

12

.8

12

.1

10

.2

10

.9 12

.7 17

.0

22

.3

30

.6 35

.1

34

.7 37

.7

44

.3

49

.6

39

.6

23

.8

Vehicles Floors, Walkways, etc. Overexertion

Source: US Bureau of Labor Statistics, US Department of Labor at http://www.bls.gov/news.release/pdf/osh2.pdf Table 14

Incidence Rate (2011)

Source/Nature of Injury:

The Obesity Epidemic

34

In 1994, in no state was the percent of adults who were obese as high as 20%.

By 2010, all 50 states had adult obesity rates of 20% or more. In 12 states, 30% of the

adults were obese.

35

32%

31%

32%

30.4%35%

20.7%

36

Overweight and Obesityin New York and the U.S., 2012

Underweight (BMI 12.0 - 18.4)

Normal (BMI 18.5 - 24.9)

Overweight (BMI 25.0 - 29.9)

Obese (BMI > 30.0)0%

5%

10%

15%

20%

25%

30%

35%

40%

2.6%

36.9% 37.0%

23.6%

1.8%

34.2%35.8%

27.6%

New York

U.S.

Source: US CDC at http://apps.nccd.cdc.gov/brfss/display.asp?cat=OB&yr=2012&qkey=8261&state=UB

37

The Most Obese Workers File Twice as ManyWC Claims as Healthy-Weight Workers

BMI <18.5 (Underweight)

18.5-24.9 (Healthy Weight)

25-29.9 (Overweight)

30-34.9 (Obese Class

I)

35-39.9 (Obese Class

II)

40+ (Obese Class III)

0

20

40

60

80

100

120

140

160

180

200

4

6

8

10

12 4

0.9

7

14.19

60

.17

75

.21

11

7.6

1 18

3.6

3

5.53 5.80

7.05

8.81

10.80

11.65

Lost Workdays Claims

Los

t W

orkd

ays

per

100

FT

Es

Cla

ims

per

100

FT

Es

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

The most obese have twice as many claims and 13 times

more lost workdays than healthy weight workers

38

WC Medical Claims and Indemnity Costsare 5-10x Higher for the Most Obese Workers

BMI <18.5 (Underweight)

18.5-24.9 (Healthy Weight)

25-29.9 (Overweight)

30-34.9 (Obese Class I)

35-39.9 (Obese Class II)

40+ (Obese Class III)

$0

$10,000

$20,000

$30,000

$40,000

$50,000

$60,000

$70,000 $7

,109

$7,5

03

$13,

338

$19,

661

$23,

373

$51,

091

$3,9

24

$5,3

96

$13,

569

$23,

633

$34,

293

$59,

178

Medical Claims Costs Indemnity Claims Costs

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

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

healthy-weight workers.

39

Additional (to WC) Costs of Obese Workers

25-29.9 (Overweight) 30-34.9 (Obese Class I) 35-39.9 (Obese Class II) 40+ (Obese Class II)$0

$1,000

$2,000

$3,000

$4,000

$5,000

$6,000

$148 $475 $824

$1,269 $85

$277

$657

$1,026

$0

$391

$1,010

$3,792

Medical Claims Costs Absenteeism Presenteeism

Source: Finkelstein, E., et al, “The Costs of Obesity in the Workplace,” Journal of Occupational and Environmental Medicine, Volume 52, No. 10 (October 2010), pp. 971-976.

The most obese workers cost employers for greater medical

care and by being less productive (by being absent more and being

less productive when at work.

Estimated Per Capita Costs

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