The National Council on Compensation Insurance (NCCI), which gathers data, analyzes industry trends, and provides objective workers compensation rate and loss cost recommendations, asked 100 leaders in the workers compensation industry about the five most critical trends affecting the future of workers compensation. Here’s what these industry leaders told NCCI concerning the critical trends affecting workers’ compensation:
1. How does an aging and changing workforce affect key industry drivers such as claims frequency and severity, along with wage and employment levels?
Insurers are looking at complications in health coverage due to the more complex medical conditions of workers and are monitoring the increase in hiring of unskilled workers and how that may impact workplace safety. They are spending more time educating others on the challenges of the aging workforce and monitoring contract workers, as well as establishing an overall focus on workplace safety and education.
2. What does the future hold for medical care costs given so many variables, such as emerging healthcare technology and treatments, issues related to opioids and marijuana in the workplace, and mega-claims associated with seriously ill or injured workers?
Leaders say it is difficult to forecast where medical costs are going because of the rapid changes in technology and treatment. Insurers are working with physicians and specialists to ensure they aren’t overprescribing treatments or medications and are enhancing claims systems to enable deeper analysis of complex medical cases. Some are looking into new solutions like artificial intelligence and telemedicine.
3. Will the gig economy ever grow to the extent that it affects the traditional workforce? And will insurers develop innovative products to serve that market?
Many leaders wonder if the impact of the gig economy is more hype than reality. States are starting to pass legislation related to the gig economy and insurers are dealing with the complexity of that and how it varies from state to state. Insurers say they are looking at alternative coverage options for gig workers and monitoring state legislative activity to keep ahead of changing trends.
4. How will rapidly changing workplace technology affect American jobs and the workers comp industry? Can regulation and legislation keep pace?
Leaders are looking at rapidly changing technological advances in the workplace but also realize that corresponding regulation is not keeping up with the changes. They’re adapting to new technology and automation, while considering alternatives for policy delivery systems for workers and employers.
5. Will insurers be able to react quickly enough to preserve rate adequacy if trends shift?
Leaders told us they’re closely monitoring the trend of declining loss costs reported by rating bureaus. They’re feeling the impact of slowed growth due to lower premiums, and many are investing in predictive analytics to help with pricing and dedicating more resources to actuarial research and analysis.
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