keyboard_backspaceBack to main blog page

PMC Insurance Group

Read articles, watch webinars, training material for practically any topic in the insurance industry.

Search Results

Posts tagged with increase - increase

You Have Workers’ Comp Questions We Have Answers

Author DMalloy , 11/20/2017
For 20 years, PMC has not only designed creative solutions for all size accounts but repeatedly out-executed the competition. Our unique network allows us to write Aviation to USL&H risks and find solutions for those last minute opportunities! Our broad range of class codes and strong carrier relationships helps you to increase new business and retain your existing accounts. 

Workers’ Comp Market Injured But Still Standing

Author DavidMalloy , 6/12/2012

From http://www.insurancejournal.com

Like the economy, the workers’ compensation market has suffered in recent years. Results for 2011 were no better than 2010. The good news: results for the workers’ comp market were not worse either.

The combined ratio held steady at 115 for the workers’ comp line of business, according to the NCCI Holding Inc.’s “State of the Line” report published in May. That’s the same as in 2010. While stable, the reported combined ratio stands as the highest combined ratio for all major commercial lines for the third straight year.

A number of factors contribute to the line’s challenging conditions, the experts say. The weak economy, high unemployment rates, rising claims frequency and unrelenting medical inflation all contribute to the market’s health.

Another reason for workers’ comp’s under-performance is rate inadequacy.

“The rate inadequacy is definitely an issue,” says Tom Koval, senior vice president, general counsel and government affairs, for FCCI Insurance Group based in Sarasota, Fla.

As the economy starts to rebound and payrolls jump, premiums will increase, leading to better results. However, Koval says the workers’ comp industry still needs relevant rate increases to come out ahead.

Chris Cunniff, senior vice president and product manager for workers’ compensation at Liberty Mutual, agrees rates fell behind, partly due to unexpected circumstances such as a rise in claim frequency in 2010.

“I think the bureau rates put forth by the NCCI and other bureaus did fall behind a little bit,” he says. “The NCCI has been filing for bureau rate increases to catch up. We’ve seen some other increases filed in other non-NCCI states as well.”

Cunniff believes other circumstances have contributed much more to the problem of rate inadequacy than bureau rate recommendations.

“If you look at the data, the biggest driver (of rate inadequacy) has been companies filing deviations or discounts below bureau loss cost levels in an attempt to retain or win business,” Cunniff says. That is the primary driver of rate inadequacy, he says.

Despite low rates in recent years, payrolls and premiums do appear to be trending up.

In its “State of the Line” report, the NCCI found that 2011 premiums for workers’ comp were up by $36.3 billion, or 7.4 percent from 2010 levels.

Even with that increase, rates have not kept up with overall workers’ comp cost drivers, the experts say.

“Workers compensation, because of its direct connection to employment and the labor markets, has been the property/casualty line most significantly impacted by the continued difficult economic environment,” said NCCI Chief Actuary Dennis Mealy. “Combined ratios remain at unsustainably high levels, and investment returns are not sufficiently high to generate operating returns near the cost of capital.”

Since 2006, NCCI loss costs have declined but so far in 2012, loss costs have generally increased, with NCCI loss costs up 2.5 percent on average and countrywide bureau loss costs up 7.8 percent.

The increase in 2012 is due to a large increase in bureau loss costs in California, the NCCI stated.

Dave Bellucsi, chief actuary for the Workers’ Compensation Insurance Rating Bureau of California, says loss adjustment expenses, which were high to start with in his state, have continued to rise. Some of the factors driving that trend are medical liens, he says.

In the Golden State’s workers’ compensation system, a lien is a direct claim against the defendant for a benefit which is not otherwise payable to the injured worker. Medical liens — a California phenomenon — are jamming up the administrative system, Bellucsi says.

“I’ve heard as high as a half a million liens are being filed for mostly medical services,” he says. Liens must be resolved by a workers’ comp judge, so the overall cost on the system is burdensome even if the lien amount is small.

Other factors behind loss cost increases in NCCI states — 38 states in total — include longer claim durations and upward pressure on claim frequency.

Bellucsi says claim frequency has also been an issue for California.

“For the last 40 years, with the occasional exception, frequency declined,” he said. “In 2010, that reversed. We saw a healthy spike of close to a 10 percent increase in 2010. In 2011, it didn’t get any worse, but it didn’t get any better, basically stayed at the same level.”

The spike in claim frequency in California stems from a sharp rise in cumulative injury claims, according to Bellusci. “Those are claims that occur over a longer period. They’re not tied to a specific event. It may be a carpal tunnel syndrome or cumulative back. It’s not one lifting, but the worker’s been lifting stuff for many years and that’s caused problems.” Most end up in litigation as well, he says. GET THE REST


NCCI Portrays a "Conflicted" Workers Compensation Industry

Author DavidMalloy , 5/21/2012
From : ProgramBusiness.com

NCCI today released its annual State of the Line workers compensation market analysis, describing the current state of the market as "conflicted." This year's report indicates that the workers compensation calendar combined ratio was 115 in 2011, the same number as in 2010.

"NCCI has observed a number of countervailing indicators in current industry conditions," said NCCI President and CEO Steve Klingel. "In some ways, we are seeing an improved condition from 2010. By other measures, however, the market remains in a worrisome state. In sum, we see a market that is conflicted as to its forward trajectory, and that makes for a challenging environment."

"Workers compensation, because of its direct connection to employment and the labor markets, has been the property/casualty line most significantly impacted by the continued difficult economic environment," added NCCI Chief Actuary Dennis Mealy. "Combined ratios remain at unsustainably high levels, and investment returns are not sufficiently high to generate operating returns near the cost of capital. On the more positive side, the growth in written premium provides strong support that the worst of the recession has passed. Additionally, the industry is well capitalized for the future."

As reported above, the workers compensation calendar year combined ratio for private carriers was 115 in 2011, the same result as in 2010. Not only did the overall combined ratio hold steady, all of the underlying components were also remarkably stable. However, for the third straight year, workers compensation holds the distinction of having the highest combined ratio of all the major commercial lines.

In terms of premium (including state funds), net written premium increased to $36.3 billion in 2011. This 7.4% increase in premium is the first increase since 2005, and a welcome shift following the cumulative 27% decline in premium from 2006–2010.

Other market indicators/trends highlighted in NCCI's 2011 State of the Line report include:
 • NCCI estimates that the combined ratio for private carriers for Accident Year 2011 is 114—down 2 points from 116 in 2010. 
• The private carrier reserve position continued its modest deterioration in 2011—for the fourth consecutive year. NCCI's estimate of the reserve position for the private carriers as of year-end 2011 is an $11 billion deficiency. 
• Since 2006, NCCI loss costs generally declined; in contrast, so far in 2012, loss costs have generally increased, with NCCI loss costs up 2.5% on average and countrywide bureau loss costs up 7.8%. The increase in 2012 is mostly due to a large increase in bureau loss costs in California. The increases in NCCI states have been attributable to a number of factors, including longer claim durations and upward pressure on claim frequency. 
• Lost-time claim frequency improved in 2011. After increasing 3% in 2010, claim frequency in 2011 declined 1% on average in NCCI states. NCCI research last year indicated that distortions in the data resulting from the recession and subsequent recovery affected our measure of claim frequency; current research indicates that those distortions continue.  
• In 2010, the average indemnity cost per lost-time claim decreased by 2.8%. In 2011, the average change was still a very modest increase of 2%.  
• The average medical cost per lost-time claim showed similarly favorable results. In 2010, the average cost per claim was just 1.3%, while in 2011 the increase was 4.0%. These are the lowest increases in average claim costs since the early 1990s.
• Although investment yields remain low, investment gains for the workers compensation insurance industry remained strong in 2011. Investment gains as a ratio to premium held at 14% of premium, higher than the average return of 11.6% that the industry earned from 2001–2010. ?
• Although the investment gain has improved, combining the underwriting loss with the large investment gains, the result is a pretax operating loss of 1% for the industry in 2011. This is the third consecutive year of near-zero operating gains. 
• The combined ratio of the residual market pools also increased slightly, from 120 in 2010 to 121 in 2011. At this time, the pools are quite small, so individual losses and states can have a disproportionate impact on the combined ratio. 
• Depopulation of the residual market ceased in 2011, reversing the trend of declining residual market premiums that began in 2005. Premiums grew by 13% in 2011 to approximately $509 million. Overall, the market share of the residual market pools serviced by NCCI for 2011 increased from 4.6% to 5%.  

Looking Ahead

NCCI's current analysis shows that the combined ratios for workers compensation remain at unsustainably high levels, and investment returns are not high enough to generate operating returns near the cost of capital. And, although claim frequency declined in the latest year, it is unclear whether it is yet returning to its long-term downward trend.

On the more positive side, the growth in written premium provides strong support that the worst of the recession has passed. Additionally, the industry is well capitalized for the future.

Moving forward, NCCI will continue to closely monitor trends and developments in claims frequency, an uncertain underwriting cycle, the as-yet-unknown impact from healthcare and financial services reforms, including the Federal Insurance Office (FIO), and new efforts to introduce alternatives to workers compensation.

The entire NCCI State of the Line presentation can be found at ncci.com. 

For more information about NCCI's State of the Line report, please visit ncci.com or contact NCCI Media Relations Director Gregory Quinn at 607-723-7878 or gregory_quinn@ncci.com.

NCCI is the nation's most comprehensive source of workers compensation insurance information. We gather data, analyze industry trends, and prepare objective insurance rate and loss cost recommendations. These activities, together with our research, analytical services and tools, and overall commitment to excellence, help foster a healthy workers compensation system. Visit ncci.com.


Operating in the Continental US!
Phone: 1-877-PMC-COMP| (781)-449-7744
Email PMC | Visit our website

Ask the Workers’ Comp Expert: NCCI to Change Experience Modification Formula

Author DavidMalloy , 5/8/2012
Ask the Workers’ Comp Expert: NCCI to Change Experience Modification Formula
by Robert G. Jones, Vice President, PMC Insurance Group

Typically, business owners paying $5,000 or more annually in workers’ compensation insurance premium qualify to be experience rated (some variations by state). The result is an insurance premium modification factor will be calculated annually for such businesses based upon individual three prior years’ payroll and loss history. This data is reported to the appropriate rating bureaus by the individual business owner’s past insurance companies.

In general, historical loss data for a particular business is compared to the average loss data for all similar businesses in its state of domicile. This comparison results in a debit or credit experience modification factor that is used to adjust the business owner’s annual workers’ compensation insurance premium. Most states use the National Council on Compensation Insurance to calculate experience modification factors for individual businesses. A few states, including New York, have their own separate workers’ compensation rating bureaus.

Effective January 2013, NCCI will implement a new formula for calculating experience modification factors. The key change in the formula is the increase in the loss per claim, from $5,000 currently to $15,000 in the new formula. Thus the size of losses per claim will have significantly greater impact on driving up the experience modification factors for business owners with large individual claims. (More information to come in the months ahead.)

PMC Insurance Group is IIABNY’s endorsed workers’ compensation specialist. Our insurance professionals have extensive experience helping IIABNY members expand their marketing capabilities by providing workers’ compensation solutions for their clients. Give Bob Jones a call at (440) 313-5002.  


 Operating in the Continental US!
 Phone: 1-877-PMC-COMP| (781)-449-7744
Email PMC | Visit our website

MA Workers Comp Rates Could Increase By 19.3 Percent

Author DavidMalloy , 4/2/2012
PMC Insurance Group The cost of employee compensation insurance for Massachusetts employers could rise dramatically later this year if rates proposed by insurers are approved by state regulators.

The Workers’ Compensation Rating and Inspection Bureau of Massachusetts, which represents companies that write workers’ compensation polices, asked the state to approve an average rate increase of 19.3 percent. Most businesses are required to carry workers’ compensation insurance, which covers the medical treatment, rehabilitation, and lost wages of employees injured on the job.

If approved, the rates would go into effect in September.

The substantial increase is necessary, the bureau said, because the cost of claims continues to rise, but the state has denied smaller requests in three of the past four years. The Division of Insurance rejected proposed increases of 2.3 percent increase in 2008, 4.5 percent increase in 2010, and a 6.6 percent increase in 2011.

“If these three small increases in rates had been granted by the Commonwealth,’’ said Paul Meagher, president of the Workers’ Compensation Rating and Inspection Bureau of Massachusetts, “we would not need such a significant rate increase now.’’

Richard C. Lord, president of Associated Industries of Massachusetts, the state’s largest employers’ group, said yesterday in a blog post that the rate request deserves consideration. He said he is concerned that without an increase, fewer companies will offer the insurance, making it harder for businesses to buy policies.

“Private-market coverage is harder to come by because the economics of workers compensation no longer add up for insurers,’’ Lord wrote. “The growing disconnect between costs and premiums has already prompted several insurance companies to scale back their activity in Massachusetts.’’

Massachusetts once had some of the highest worker compensation costs in the country, but following reforms in 1991, those costs have declined steadily, falling by two-thirds over the past 20 years. If a premium cost $100 in 1991, the current rate would be $33.21. If the new rate request is approved, that premium would rise to $39.62, according to the Workers’ Compensation Rating and Inspection Bureau of Massachusetts.

The bureau said insurers need the increase to cover the rising costs of health care and wage replacement, driven by higher salaries and the longer leaves that claimants are taking. The number of claims has declined, but not fast enough to offset the increases in medical and wage replacement costs, the bureau said.

“While we recognize that the current filing calls for a significant rate increase, it reflects the real costs of providing this kind of insurance,’’ said Meagher. “Without a rate increase, we will be unable to maintain a competitive market for workers’ compensation insurance in Massachusetts.’’

The proposed rates will be examined in hearings held by Joseph G. Murphy, the state insurance commissioner. Murphy said yesterday that his office intends to “take a long, hard look at the process. This is a large increase, and this administration is particularly sensitive to the cost of doing business in the state.’’

Murphy said he expects to schedule a public hearing by the end of March.  

This article is courtesy of programbusiness.com, Source- Boston Globe dated mar 2, 2012  
  

Call us today and put our expertise to work for you!

PMC Insurance Group (P) 877-PMC-COMP (P) 781-449-7744 (F) 781-449-7889
www.pmcinsurance.com info@pmcinsurance.com

1

To contact us, and for more information, please visit our CompleteMarkets storefront.

NY Lawmakers To Consider Raising Minimum Wage To 8.50 An Hour

Author DavidMalloy , 3/28/2012
PMC Insurance Group NEW YORK – Hundreds of thousands of workers making minimum wage in New York could soon be getting a big raise.
Minimum wage workers haven’t seen a pay increase in three years. That could soon change, since State Assembly Speaker Sheldon Silver reportedly plans to introduce a bill today, raising the state’s minimum wage from $7.25 an hour to $8.50. That’s a 17 percent increase. The bill would also require the rate to be adjusted annually for inflation. Nationwide, 18 states already have a higher minimum wage rate. Earlier this month, Silver spoke about the need to bring New York up to par. He said the current minimum wage is unrealistically low. “It’s absurd to expect anyone, let alone a working family, to afford the cost of living today,” he said. It’s an issue both Governor Andrew Cuomo and Mayor Michael Bloomberg have championed recently. “The cost of living in New York City, like nearly everywhere else, has gone up,” Bloomberg said during his annual State of the City address. “And not just housing, but food, transit and all the key parts of a family’s budget. But there’s one thing that, in all fairness, hasn’t gone up: The ability of those at the bottom of the economic ladder to pay for those essential needs.”  

To keep a hold of your finances, contact your local insurance agent today!
This article courtesy of CBSNewYork  

Call us today and put our expertise to work for you!

PMC Insurance Group (P) 877-PMC-COMP (P) 781-449-7744 (F) 781-449-7889
www.pmcinsurance.com info@pmcinsurance.com

1

To contact us, and for more information, please visit our CompleteMarkets storefront.