The Insurance Journal reports that the U.S. workers’ compensation market saw solid gains in 2014, thanks in part to premium increases and favorable claims frequency. This was the fourth consecutive year in which the industry reported improved results, A.M. Best said in a report.
The U.S. workers’ compensation combined ratio came in at 101.5 for 2014. While a combined ratio under 100 is considered healthy, the number reflects steady improvement compared to the 118.1 combined ratio generated in 2010, according to the report. Net premiums written came in at $46.8 billion for the sector in 2014, a steady climb from $34 billion produced in 2010.
A.M. Best noted the improvement but pointed out that the positives are near-term, as uncertainty remains about the industry’s ability to maintain rate adequacy in the longer term.
But several giants in the fields shrunk their market share in 2014. Liberty Mutual Insurance’s U.S. workers’ compensation net premiums written for 2014 dropped 27.5 percent compared to the previous year. The decline was enough to knock it from second to fifth place in a new A.M. Best special report on the sector’s overall performance. A Liberty Mutual spokesperson said the drop is part of the insurer’s strategy to rid itself of weak accounts.
American International Group also lost ground. AIG booked $2.4 billion in net premiums written during 2014 for a 5.2 percent share and third place. That’s a 10.4 percent drop from what AIG achieved in 2013, when it produced more than $2.7 billion in net premiums written for a 6.2 percent market share and fourth place.
Other top-ranked U.S. workers’ compensation insurers generally maintained their rankings, but some gained premiums and market share while others lost ground. Top-rated Travelers Group, for example, achieved $3.8 billion in net premiums written during 2014 for an 8.2 percent piece of the market. The number is 4.3 percent higher than the $3.68 billion in net premiums written during 2013, which represented an 8.3 percent market share.
Second-place Hartford Insurance Group also grew, with $3 billion in net premiums written during 2014 for a 6.4 percent share of the market—1.4 percent higher than the $2.97 billion generated in 2013, when it had 6.7 percent of the market and was in third place.