May 24, 2013

According to NCCI, growth within the workers compensation residual market pool is continuing.  There was an $800,000 increase in premiums in 2012 after a $500,000 increase in 2011.  Overall growth is continuing so far in 2013. 

NCCI, which consists of 21 states, claims that the interest rate environment is the underlying cause for this increase.

Although the residual market has traditionally been mainly consisted of smaller contracting and construction accounts, there has been an influx of accounts paying premiums over $50,000 in the residual market.  This trend is expected to increase significantly if the federal terrorism backstop is not renewed in 2014 and underwriters decide not to write large risks concentrated in major cities such as New York and Chicago.

Employers, already dealing with a stagnant economy, will not be happy with a lack of options and higher premiums for their workers compensation insurance. The quickest and easiest way to reduce your clients’ and prospect’ experience mods and provide them with a better underwriting profile to enter the renewal marketplace is through workers compensation premium recovery.