Marsh has published an Insight Report on the effects of COVID-19 on the Workers’ Compensation industry so far. Here are some of the highlights of its report.
Some six months after the World Health Organization declared a pandemic, many of the most dire predictions about COVID-19’s impact on workers’ compensation systems have not been realized. Claims of COVID-19 exposure in the workplace have been outpaced by a decline in other types of reported occupational injuries, and the workers’ compensation insurance market remains competitive.
Industry observers have forecast that workers’ compensation premium volume will drop by as much as 10% to 20% in 2020 and will likely not continue to grow in 2021 as the labor market remains challenging. Despite this negative premium growth and a number of changes to state regulations or directives regarding the compensability of COVID-19 claims, Marsh anticipates the impact to insurer profitability to be less drastic and for the line to normalize fairly quickly.
The National Council on Compensation Insurance (NCCI), Workers’ Compensation Insurance Rating Bureau of California (WCIRB), and other industry observers have published sizable initial ranges of estimated claims losses from COVID-19. But a large influx of COVID-19 claims have not yet materialized, with limited exceptions in health care. And initial analysis shows that the average severity of COVID-19 claims is lower than expected.
Telemedicine will play an increasingly important role in workers’ compensation, potentially even after the pandemic subsides and workplaces largely transition to a new normal. Amid the pandemic, employers are reporting a variety of benefits and practical applications for telemedicine, including to facilitate triage and claim intake, initial injury assessments follow-up visits, and injury rehabilitation.
Prior to the pandemic, employers had expressed interest in telemedicine but had not widely adopted its use in workers’ compensation, in part because laws in some states limited its use. Since COVID-19 emerged as a threat, however, many states have eased restrictions and encouraged employers and claims administrators to use telemedicine, which can offer many benefits to employers and workers, including the ability to avoid crowded waiting rooms and lengthy commutes.
The explosion of telemedicine in workers’ compensation during the pandemic also mirrors its greater use by primary care physicians and others in group health settings. As employees become more familiar with telemedicine’s benefits during the pandemic, they may expect it to remain a readily available option post-COVID-19 — including as a means for receiving care following workplace injuries.