OLDWICK, N.J.-The weak economy has taken its toll on the workers compensation insurance industry and a speedy recovery is unlikely, A.M. Best Co. Inc. said in a special report Monday.
The insurance rating organization said the workers compensation insurance industry’s net premiums written plunged 14.5% to $12.3 billion in 2009, the lowest level since 1999.
In fact, net premiums written for workers comp fell five years in a row, decreasing approximately 41% since peaking at $21 billion in 2004, according to Oldwick, N.J.-based A.M. Best.
At the same time, the workers compensation insurance industry’s composite combined ratio deteriorated 8.8 percentage points to 120%, the highest composite combined ratio since 2002, when it reached 118.6%.
“The deterioration was driven primarily by the downward spiral in premium volume as the economy continued to take its toll on exposure levels and competitive pricing remained widespread,” Best said in a statement.
“As the economy moves slowly from recession to recovery, the consensus anticipates a jobless recovery; and therefore, sluggish premium growth, meaning the workers compensation segment’s underwriting performance is not expected to rebound over the near term,” Best said.
Source: Associated General Contractors