Underwriting profitability remained relatively stable in the U.S. workers’ compensation market in 2020 as the COVID-19 pandemic raged and premium volumes fell. But while the pandemic may be ebbing in the U.S. in 2021, the workers’ comp space cannot yet say it was unscathed.

The top 3 workers’ compensation players held their positions in 2020 despite seeing sharp falls in premium volume, S&P Global Market Intelligence data shows. The Travelers Cos. Inc. continued to rule the roost with control of 7.3% of the U.S. market, even though its direct premiums written fell 11.3% to $3.74 billion.

Changes further down the ranks were confined to one-position moves. Chubb Ltd. took fourth place from Liberty Mutual Group Inc., AF Group nudged State Insurance Fund Workers’ Compensation Fund out of the eighth spot and Old Republic International Corp. knocked American International Group Inc. out of the top 10.

Premium volume was down across the board as the pandemic kept workers at home or saw them furloughed or laid off. Direct written premiums were down 10.5% year over year to $31.41 billion for the top 20 and 9.2% to $51.06 billion for the industry.

However, underwriting profitability looks to have held up despite concerns about a flurry of losses from the introduction of rebuttable presumptions for pandemic-related workers’ compensation claims in several states, which shifts the burden of proof to the employer from the employee.

The workers’ compensation industry’s collective direct incurred loss ratio, prior to consideration of reinsurance, increased year over year, but only by 1.3 percentage points to 47.4%.

The combined ratio is likely to have seen a similar trend. Dan Aronson, U.S. casualty leader at insurance broker Marsh LLC, said during an April webinar that the industrywide private carrier combined ratio was estimated to be 86% for 2020, compared with 85% for 2019.

Workers’ compensation underwriting profitability has been “pretty solid” in recent years because of falling claims frequency, Sid Ghosh, vice president at Moody’s, said in an interview. The pandemic, which halted many business activities, has helped workers’ compensation claims frequency “tremendously,” he said.

There are signs that claims costs from workers catching COVID-19 will not be as high as feared. Dennis Tierney, Marsh’s director of workers’ compensation claims, on the webinar said one surprise was that the average COVID-19 claim cost less than $5,000, compared with around $20,000 for the typical workers’ compensation claim.

That said, the workers’ compensation market may not be done with the pandemic yet. Tierney said the potential for long-term health effects of COVID-19 is not yet fully known. As time goes on, the overall picture of the pandemic’s impact may change, he said.

Ghosh said another unknown is how working from home for a prolonged period of time may affect workers’ health in the long run. “We don’t know how that is going to evolve,” he said. He also noted that the claims frequency reductions were “a temporary benefit to the industry” that would be reversed as people return to work.

The introduction of new presumption rules in several states is “a worry for the workers’ comp industry,” Ghosh said, although Moody’s not aware of a material number of claims resulting from these changes so far. He added that some states were considering whether to expand the rules from essential workers to a wider group.