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Employers starting to see rate increases
8/2/2012
 
After enjoying one of the longest soft markets in recent memory, employers are starting to see workers' compensation rate increases of 5-7% and even as high as 10%, reports Business Insurance.

“There also have been some increases in employer retention levels as insurers tighten their underwriting standards in an attempt to improve the line's profitability,” the publication adds. “The discipline is certainly back in the marketplace and, unfortunately for buyers, that means they are all going to pay more, at least in the guaranteed-cost market,” Bob Jacobsen, area vice president for brokerage Arthur J Gallagher & Co. in Chicago, commented to the publication.

Companies with unfavorable loss experiences are receiving additional underwriter scrutiny and are being quoted higher rates. Insurers are under pressure because of rising healthcare costs, recession-related claim cost increases driven by an inability to return injured workers to work, and because of lackluster premium volume growth, Business Insurance said.

Earlier in the year Fitch Ratings Ltd. reported that the workers’ comp line posted a 117% combined ratio nationwide for 2011, its worst result in 10 years and worse than the combined ratio for other lines.