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The National Council on Compensation Insurance (NCCI) revealed in-depth data on the performance of the US workers compensation system in 2020. Because of job losses and shrinking payrolls during the pandemic recession, net written premium dropped 10% to $42 billion in 2020. However, private insurers posted a profitable calendar year combined ratio of 87, the fourth straight year with a combined ratio below 90 for workers compensation insurance.

The pandemic was the moment to rise to the challenge, and the workers compensation system did so with integrity,” said Bill Donnell, President and CEO of NCCI. “Our workers compensation system is fulfilling its noble mission to help injured workers.”

NCCI Chief Actuary Donna Glenn said, “The pandemic has been devastating for families, healthcare workers, and the economy. The workers compensation system has been strong and resilient. While net written premium dropped significantly during the recession, other financial metrics remain favorable, at or near historic highs. We have seen fewer COVID-19 claims than originally anticipated.”

Here are other key details included in NCCI’s State of the Line Report on workers compensation insurance:

– – Combined Ratio – The calendar year combined ratio is 87, while the reported accident year combined ratio is 100.
– – Reserves – The reserve position for private insurers remains strong, growing to a redundancy of $14 billion as of Year-End 2020.
– – COVID-19 Claims – Workers hurt by COVID-19 made more than 45,000 claims in 2020 with more than 95% of those claims costing less than $10,000. Carriers reported $260 million in total COVID-19 incurred losses in 2020.
– – Workers Hurt by COVID-19 – Hardest hit were workers in nursing homes, hospitals, clinics, and other healthcare settings along with first responders, which all together account for 75% of the claims.
– – COVID-19 Severity – To date, the costliest 1% of COVID-19 claims account for 60% of COVID-19 loss dollars.
– – Claim Frequency – Excluding COVID-19 claims, claim frequency decreased 7% in 2020, continuing the long-term lost-time claim frequency decline.
– – Claim Severity – While indemnity claim severity is expected to increase 3% in 2020, the average cost of the medical portion of a lost-time claim is expected to change between plus or minus 2%.

The complete workers compensation State of the Line Report and State of the Line Guide are available at

Glenn and other NCCI experts noted a series of issues on the organization’s watchlist, including the uncertainty of how workers with long-haul symptoms will fare and how quickly the recovery will drive an increase in payrolls and workers compensation premiums.