June 25, 2012

According to a new residual market report by NCCI that came out on June 22, 2012 after six straight years of decreases, the number of new applications and the amount of new premium bound in the residual market started to grow in the second half of 2011 and continued to grow into the first quarter of 2012.

For the first quarter of 2012, the number of new applications seeking coverage in the residual market grew by 19 percent over the same period in 2011 and the new premium bound grew by 116 percent.

The residual market share of the total market has increased to 4 percent for Calendar Year 2011 for NCCI Plan-administered states, which is the first such market share increase in eight years.

This report is no surprise based on what’s been said at the 2012 NCCI symposium that there has been considerable growth in the assigned risk pool in the first quarter of 2012, as well as a 3% increase in claims frequency. Obviously blue-collar industries that have a high frequency of accidents tend to see their experience modification drive upwards and in many cases these companies are forced into the assigned risk pool. This is always a danger for brokers. Although their clients may continue to keep them as their broker while in the assigned risk pool, once their clients are in the assigned risk, there are many other brokers shopping to get these clients out of the assigned risk to win their business. It’s as if employers placed in the assigned risk pool are put on display and are there for the taking.

The easiest way for a broker to look good to a client or a prospect in this situation is through              workers compensation premium recovery. Fast results that will secure a client or prospect for life.