Comes of Age
By Annmarie Geddes Lipold
(And Not a Minute Too Soon)
Where there are reliable
data, there’s an opportunity
to apply predictive modeling.
In workers’ compensation,
early adopters are enjoying
better and more accurate
pricing and improved
NOTHING MOTIVATES INNOVATION in the workers’ com- pensation industry like crisis. Just when lower loss costs tart leading to more competitive premium prices, trending undercurrents begin lurking in the industry’s combined ratio.
The combined ratio of the private workers’ comp industry has rarely
shown profitability in the past 20 years. From 1991 through 2010, the
average combined ratio is 108.3, and the 2010 calendar year
combined ratio is 115.0, according to the National Council
on Compensation Insurance Inc. (see table Page 36).
Results from NCCI are based on data from
approximately half the private insurance
market’s written premium.