In Partnership with
Strong and stable
After years of unparalleled industry results, IBA chats to three industry experts from Method Insurance, AmTrust Financial Services, and Foresight Insurance about headwinds and tailwinds in the US workers’ compensation system
Julie Richt
Method Insurance Services
Industry experts
Matt Zender
Amtrust Financial Services
Emilio Figueroa
Foresight Insurance
As Method’s EVP of revenue, Julie Richt is responsible for maximizing operating performance to achieve financial goals regarding premium, retention, and profitability. Julie works closely with vendors, carriers, and agency partners to position the company for success.
Julie is an insurance industry veteran, with over 17 years of insurance industry experience. She’s earned her Property & Casualty license, Life and Health license, and Insurance Counselor certification. She serves on the board of directors of the Independent Insurance Agents of Omaha.
Method Insurance Services
Julie Richt
Matt Zender is senior vice president, workers’ compensation strategy and workers’ compensation product manager for AmTrust Financial Services, one of the top workers’ compensation carriers in the US. At AmTrust, he manages the WC product line and strategy. He has been in the industry for over 25 years and is active in a number of committee and board positions of thought leaders and bureaus throughout the country, including CWCI, NCCI, and NYCIRB.
Amtrust Financial Services
Matt Zender
Emilio Figueroa is a recognized global insurance innovation thought leader and has been a speaker on InsurTech and RiskTech topics at conferences throughout North America and Europe. A property/casualty industry veteran of nearly three decades, Emilio led the creation of multiple insurance programs for risk-management venture firms, and previously led innovation and creation across multiple insurance verticals, including MGA, captives, alternative risk transfer vehicles, and multiple reinsurance firms.
Foresight Insurance
Emilio Figueroa
“[Telematic technologies] are [growing in prevalence] in workers’ compensation from an underwriting standpoint, as well as a safety and risk-mitigation standpoint. All of that gives us more data to hopefully predict brighter futures in the workers’ compensation space”
Julie Richt,
Method Insurance
THE US WORKERS' compensation system is booming after several years of unparalleled results. Despite a myriad of challenges triggered by the COVID-19 pandemic, the inflationary economic climate, and the so-called Great Reshuffle in the labor market, the workers’ compensation system has retained its title as one of the most profitable segments within the US property and casualty (P&C) industry.
According to the National Council on Compensation Insurance (NCCI), the industry’s net written premium increased by about one percent to $43 billion in 2021, with private carrier premium accounting for $38 billion. Private carriers posted a profitable combined ratio of 87 percent for the year, making 2021 the fifth consecutive year with a combined ratio below 90 percent for the workers’ compensation insurance market and the eighth consecutive year of underwriting profitability.
For the panel of workers’ compensation insurance experts gathered for the latest edition of IBA’s Executive Roundtable Insights Series, eight years of profitability is cause for celebration – but change might be on the horizon.
“Being aware of long-term mental-health concerns and being able to maintain a grasp on increasing indemnity expenditures for pandemic-related claims is important to retaining a good loss ratio”
Emilio Figueroa, Foresight Insurance
“We're looking at a line of business that just came through something [COVID-19] that was, frankly, existential at one point. The predictions that the WCIRB and the NCCI were putting out were scary, and we’ve come through that resilient”
Matt Zender,
AmTrust Financial Services
Emilio Figueroa, chief insurance officer at Foresight Insurance, is already seeing “rate increases” in many states. In California, for example, the Workers’ Compensation Insurance Rating Bureau recently authorized a pure premium rate filing for Sept.1, 2022 at an average of 7.6 percent above the average approved September 1, 2021 advisory pure premium rates. Overall, premiums have increased less than one percent between 2020 and 2021, but Figueroa warns that “rising claim frequency is starting to offset growth.”
Despite some changes on the horizon for the US workers’ compensation system, all three experts are positive about the industry’s “bright future,” in the words of Figueroa. Zender says he’s “very bullish” about the space.
“We're looking at a line of business that just came through something [COVID-19] that was, frankly, existential at one point. The predictions that the WCIRB and the NCCI were putting out were scary, and we’ve come through that resilient,” he says. “I think one of the reasons for that is we’ve come to understand how our data can help us. We use data and analytics in underwriting through claims, and it’s allowing us as an industry to ensure we’re pricing risks appropriately, and we’re doing so in a contemporary fashion. Overall, the rate levels are lower, and we’re okay with that because we’re using analytics to ensure we’re charging the right rate for our policyholders.”
Richt agrees that data and analytics have had a positive impact on the market’s underwriting profitability over the
Julie Richt, executive vice president, revenue, Method Insurance, says the workers’ compensation system was “very resilient coming out of the pandemic,” and is now in a “strong and stable” position, ready to tackle any changes to the risk landscape.
“This is a very profitable space overall, but there have been some challenges over the last couple of years around the workforce,” says Richt. “The workforce has changed a lot – people have gone remote, jobs have changed, workers have shuffled, and they’ve looked at the pandemic as an opportunity to re-evaluate their jobs/careers.”
“I also see innovation in proactive risk management,” she adds. “Employers are investing in things like wearable technologies for the construction industry, which helps them to gauge the daily physical activities of their employees and figure out how to prevent some human error and accidents. In manufacturing, companies are automating some processes to reduce volatility in the work environment, and in trucking, they’ve started to monitor driving differently [with telematic technology]. Those technologies are [growing in prevalence] in workers’ compensation from an underwriting standpoint, as well as a safety and risk-mitigation standpoint. All of that gives us more data to hopefully predict brighter futures in the workers’ compensation space.”
To try to attract and retain workers in today’s tight labor market, employers are increasing wages, and as their payrolls expand, their workers’ compensation premiums automatically rise along with their indemnity benefits. The three elements – wages, premiums, and benefits – typically stay in balance, but with the speed of the Great Reshuffle and the fact that employers are turning to less-experienced staff to fill vacant roles, there’s a risk of some short-term disconnects among wages, indemnity payments, and premiums, which could result in some rate increases.
“The main points of concern during the pandemic were lower payrolls, higher claim frequency, higher individual claims costs, and unstable financial markets, which would all lead to flat profitability in the line,” he says. “We can't overcome future concerns, but we can be prepared and learn how to mitigate and respond to that shifting risk landscape as we see it changing.
“As we get back into a normal post-pandemic society, we’re seeing a slight increase in claims frequency and severity. We’ve seen how hybrid and remote workers have moved the power balance from the employer to the employee. Being aware of long-term mental-health concerns and being able to maintain a grasp on increasing indemnity expenditures for pandemic-related claims is important to retaining a good loss ratio. We need to be nimble enough as an industry to shift our appetite to remain a positive force within the line and shift our risk mitigation strategies quickly.”
Read on
Figueroa believes technology will help to “ease the engagement in the complete policy life cycle” so that insureds, brokers, agents, and insurers feel there’s an “honest collaboration.” This collaboration is critical in a changing marketplace, according to Richt, who says brokers and agents should re-engage employers on training and onboarding practices with the help of carrier resources and risk-management tools. With successful engagement and collaboration among all key stakeholders, all three experts predict strong outcomes for the market.
AmTrust Financial Services is a niche specialty property and casualty insurance company with nearly 6,000 employees worldwide. We have grown to become an industry-leading insurance provider, focusing on small business insurance solutions including workers’ compensation, BOP, package, cyber, and EPLI. We are a top warranty writer in the United States, and help international businesses manage a number of risks such as medical malpractice, professional indemnity, property, legal, and health. AmTrust currently has a Financial Strength Rating of A- (Excellent) with a Stable outlook and a Financial Size of “XV” from AM Best.
Find out more
Foresight is the workers’ compensation insurtech that is innovating how workers compensation is priced. We drive down insurance premiums – often the largest operating expense for businesses after payroll – by applying a proprietary, best-in-class safety-coaching program called Safesite that functions like a credit score for businesses implementing sound risk-management practices.
Find out more
Founded by pioneers in the occupational medicine industry, Method’s mission is to mitigate workplace injuries and deliver exceptional healthcare outcomes for injured workers, expediting a return to work, preserving families’ economic livelihoods, and enhancing employers’ productivity. Method has extensive experience in all aspects of program management and a broad appetite for high-hazard, high-mod, mid-market risks. Method is headquartered in Nashville, Tennessee, with offices in Austin, Texas; Dallas, Texas; Las Vegas, Nevada; and Omaha, Nebraska. Method is a WP Global Partners, Inc. portfolio company.
Find out more
“We're looking at a line of business that just came through something [COVID-19] that was, frankly, existential at one point. The predictions that the WCIRB and the NCCI were putting out were scary, and we’ve come through that resilient”
Matt Zender,
AmTrust Financial Services
“Being aware of long-term mental-health concerns and being able to maintain a grasp on increasing indemnity expenditures for pandemic-related claims is important to retaining a good loss ratio”
Emilio Figueroa, Foresight Insurance
“[Telematic technologies] are [growing in prevalence] in workers’ compensation from an underwriting standpoint, as well as a safety and risk-mitigation standpoint. All of that gives us more data to hopefully predict brighter futures in the workers’ compensation space”
Julie Richt,
Method Insurance
In Partnership with
Strong and stable
After years of unparalleled industry results, IBA chats to three industry experts from Method Insurance, AmTrust Financial Services, and Foresight Insurance about headwinds and tailwinds in the US workers’ compensation system
Read on
Emilio Figueroa
Foresight Insurance
Matt Zender
Amtrust Financial Services
Julie Richt
Method Insurance Services
Industry experts
AmTrust Financial Services is a niche specialty property and casualty insurance company with nearly 6,000 employees worldwide. We have grown to become an industry-leading insurance provider, focusing on small business insurance solutions including workers’ compensation, BOP, package, cyber, and EPLI. We are a top warranty writer in the United States, and help international businesses manage a number of risks such as medical malpractice, professional indemnity, property, legal, and health. AmTrust currently has a Financial Strength Rating of A- (Excellent) with a Stable outlook and a Financial Size of “XV” from AM Best.
Find out more
Foresight is the workers’ compensation insurtech that is innovating how workers compensation is priced. We drive down insurance premiums – often the largest operating expense for businesses after payroll – by applying a proprietary, best-in-class safety-coaching program called Safesite that functions like a credit score for businesses implementing sound risk-management practices.
Find out more
Founded by pioneers in the occupational medicine industry, Method’s mission is to mitigate workplace injuries and deliver exceptional healthcare outcomes for injured workers, expediting a return to work, preserving families’ economic livelihoods, and enhancing employers’ productivity. Method has extensive experience in all aspects of program management and a broad appetite for high-hazard, high-mod, mid-market risks. Method is headquartered in Nashville, Tennessee, with offices in Austin, Texas; Dallas, Texas; Las Vegas, Nevada; and Omaha, Nebraska. Method is a WP Global Partners, Inc. portfolio company.
Find out more
As Method’s EVP of revenue, Julie Richt is responsible for maximizing operating performance to achieve financial goals regarding premium, retention, and profitability. Julie works closely with vendors, carriers, and agency partners to position the company for success.
Julie is an insurance industry veteran, with over 17 years of insurance industry experience. She’s earned her Property & Casualty license, Life and Health license, and Insurance Counselor certification. She serves on the board of directors of the Independent Insurance Agents of Omaha.
Method Insurance Services
Julie Richt
Matt Zender is senior vice president, workers’ compensation strategy and workers’ compensation product manager for AmTrust Financial Services, one of the top workers’ compensation carriers in the US. At AmTrust, he manages the WC product line and strategy. He has been in the industry for over 25 years and is active in a number of committee and board positions of thought leaders and bureaus throughout the country, including CWCI, NCCI, and NYCIRB.
Amtrust Financial Services
Matt Zender
Emilio Figueroa is a recognized global insurance innovation thought leader and has been a speaker on InsurTech and RiskTech topics at conferences throughout North America and Europe. A property/casualty industry veteran of nearly three decades, Emilio led the creation of multiple insurance programs for risk-management venture firms, and previously led innovation and creation across multiple insurance verticals, including MGA, captives, alternative risk transfer vehicles, and multiple reinsurance firms.
Foresight Insurance
Emilio Figueroa
“We're looking at a line of business that just came through something [COVID-19] that was, frankly, existential at one point. The predictions that the WCIRB and the NCCI were putting out were scary, and we’ve come through that resilient”
Matt Zender,
AmTrust Financial Services
“Being aware of long-term mental-health concerns and being able to maintain a grasp on increasing indemnity expenditures for pandemic-related claims is important to retaining a good loss ratio”
Emilio Figueroa, Foresight Insurance
“[Telematic technologies] are [growing in prevalence] in workers’ compensation from an underwriting standpoint, as well as a safety and risk-mitigation standpoint. All of that gives us more data to hopefully predict brighter futures in the workers’ compensation space”
Julie Richt,
Method Insurance
In Partnership with
Strong and stable
After years of unparalleled industry results, IBA chats to three industry experts from Method Insurance, AmTrust Financial Services, and Foresight Insurance about headwinds and tailwinds in the US workers’ compensation system
Read on
Emilio Figueroa
Foresight Insurance
Matt Zender
Amtrust Financial Services
Julie Richt
Method Insurance Services
Industry experts
AmTrust Financial Services is a niche specialty property and casualty insurance company with nearly 6,000 employees worldwide. We have grown to become an industry-leading insurance provider, focusing on small business insurance solutions including workers’ compensation, BOP, package, cyber, and EPLI. We are a top warranty writer in the United States, and help international businesses manage a number of risks such as medical malpractice, professional indemnity, property, legal, and health. AmTrust currently has a Financial Strength Rating of A- (Excellent) with a Stable outlook and a Financial Size of “XV” from AM Best.
Find out more
Foresight is the workers’ compensation insurtech that is innovating how workers compensation is priced. We drive down insurance premiums – often the largest operating expense for businesses after payroll – by applying a proprietary, best-in-class safety-coaching program called Safesite that functions like a credit score for businesses implementing sound risk-management practices.
Find out more
Founded by pioneers in the occupational medicine industry, Method’s mission is to mitigate workplace injuries and deliver exceptional healthcare outcomes for injured workers, expediting a return to work, preserving families’ economic livelihoods, and enhancing employers’ productivity. Method has extensive experience in all aspects of program management and a broad appetite for high-hazard, high-mod, mid-market risks. Method is headquartered in Nashville, Tennessee, with offices in Austin, Texas; Dallas, Texas; Las Vegas, Nevada; and Omaha, Nebraska. Method is a WP Global Partners, Inc. portfolio company.
Find out more
Emilio Figueroa is a recognized global insurance innovation thought leader and has been a speaker on InsurTech and RiskTech topics at conferences throughout North America and Europe. A property/casualty industry veteran of nearly three decades, Emilio led the creation of multiple insurance programs for risk-management venture firms, and previously led innovation and creation across multiple insurance verticals, including MGA, captives, alternative risk transfer vehicles, and multiple reinsurance firms.
Foresight Insurance
Emilio Figueroa
Matt Zender is senior vice president, workers’ compensation strategy and workers’ compensation product manager for AmTrust Financial Services, one of the top workers’ compensation carriers in the US. At AmTrust, he manages the WC product line and strategy. He has been in the industry for over 25 years and is active in a number of committee and board positions of thought leaders and bureaus throughout the country, including CWCI, NCCI, and NYCIRB.
Amtrust Financial Services
Matt Zender
As Method’s EVP of revenue, Julie Richt is responsible for maximizing operating performance to achieve financial goals regarding premium, retention, and profitability. Julie works closely with vendors, carriers, and agency partners to position the company for success.
Julie is an insurance industry veteran, with over 17 years of insurance industry experience. She’s earned her Property & Casualty license, Life and Health license, and Insurance Counselor certification. She serves on the board of directors of the Independent Insurance Agents of Omaha.
Method Insurance Services
Julie Richt
Share
Share
Share
WC Net Written Premium
Private Carriers and State Funds
Calendar Year
p Preliminary
Source: NAIC's Annual Statement data; includes state insurance fund data for the following states: AZ, CA, CO, HI, ID, KY, LA, MD, MO, MT, NM, OK, OR, RI, TX, and UT
Each calendar year total for state funds includes all funds operating as a state fund in that year
01
02
03
04
05
06
07
08
09
10
11
12
13
14
15
16
17
18
19
20
21p
50
40
30
20
10
$ Billions
38.0
38
42.6
43
Sources: NCCI's Policy data, NAIC's Annual Statement Statutory Page 14, NCCI's Financial Call data Rate / Loss cost departure reflects carrier departure from NCCI rate level, which excludes a profit and contingency provision and expense constant Based on data for all states where NCCI provides ratemaking services; rate/loss cost departure, schedule rating, and dividends exclude TX
What factors are affecting premiums?
Private Carriers - NCCI States
Payroll
Low Cost & Mix
Rate / Loss Cost Departure
4%
Schedule Rating
1%
Dividends
0%
2016 vs. 2021
28%
The risks tied to labor changes vary by industry, according to Richt. Where there was exponential growth and quick hiring practices during the pandemic – for example, in the wholesale and inland marine/commercial auto segments – a lack of adequate employee onboarding and training led to an uptick in frequency and severity of workers’ compensation claims. In a similar vein, as service industries – like hospitality and retail – try to bounce back post-pandemic, many are having to hire inexperienced workers from a shrinking labor pool, who may be more susceptible to accidents.
“A short-tenured worker would be defined as less than one year with an employer … and the effect that has on claim frequency really does vary by segment,” says Matt Zender, senior vice president, workers’ compensation strategy, AmTrust Financial Services. “In the leisure, hospitality, and restaurant space, workers are 50 percent more likely to experience a claim if they’ve been in the job for less than one year. That sounds bad, but if you take that same tenure
and apply it to the wholesale space, they’re 200 percent more likely to have a claim. It's due to the lack of familiarity, the lack of training, and the changing landscape they’re dealing with.”
last decade. Now, she says, more technology and automation are needed in claims, in order to drive down overall claims costs.
The risks tied to labor changes vary by industry, according to Richt. Where there was exponential growth and quick hiring practices during the pandemic – for example, in the wholesale and inland marine/commercial auto segments – a lack of adequate employee onboarding and training led to an uptick in frequency and severity of workers’ compensation claims. In a similar vein, as service industries – like hospitality and retail – try to bounce back post-pandemic, many are having to hire inexperienced workers from a shrinking labor pool, who may be more susceptible to accidents.
“The main points of concern during the pandemic were lower payrolls, higher claim frequency, higher individual claims costs, and unstable financial markets, which would all lead to flat profitability in the line,” he says. “We can't overcome future concerns, but we can be prepared and learn how to mitigate and respond to that shifting risk landscape as we see it changing.
“As we get back into a normal post-pandemic society, we’re seeing a slight increase in claims frequency and severity. We’ve seen how hybrid and remote workers have moved the power balance from the employer to the employee. Being aware of long-term mental-health concerns and being able to maintain a grasp on increasing indemnity expenditures for pandemic-related claims is important to retaining a good loss ratio. We need to be nimble enough as an industry to shift our appetite to remain a positive force within the line and shift our risk mitigation strategies quickly.”
“A short-tenured worker would be defined as less than one year with an employer … and the effect that has on claim frequency really does vary by segment,” says Matt Zender, senior vice president, workers’ compensation strategy, AmTrust Financial Services. “In the leisure, hospitality, and restaurant space, workers are 50 percent more likely to experience a claim if they’ve been in the job for less than one year. That sounds bad, but if you take that same tenure and apply it to the wholesale space, they’re 200 percent more likely to have a claim. It's due to the lack of familiarity, the lack of training, and the changing landscape they’re dealing with.”
“The main points of concern during the pandemic were lower payrolls, higher claim frequency, higher individual claims costs, and unstable financial markets, which would all lead to flat profitability in the line,” he says. “We can't overcome future concerns, but we can be prepared and learn how to mitigate and respond to that shifting risk landscape as we see it changing.
“As we get back into a normal post-pandemic society, we’re seeing a slight increase in claims frequency and severity. We’ve seen how hybrid and remote workers have moved the power balance from the employer to the employee. Being aware of long-term mental-health concerns and being able to maintain a grasp on increasing indemnity expenditures for pandemic-related claims is important to retaining a good loss ratio. We need to be nimble enough as an industry to shift our appetite to remain a positive force within the line and shift our risk mitigation strategies quickly.”
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Copyright © 2022 Key Media
People
Terms & conditions
Privacy policy
Conditions of use
About us
Contact us
RSS
Asia
NZ
AU
CA
US
UK
contact us
specialty
Best Insurance
Resources
RISK MANAGEMENT
News
Copyright © 2022 Key Media
People
Terms & conditions
Privacy policy
Conditions of use
About us
Contact us
RSS
Asia
NZ
AU
CA
US
UK