As a result, premium volume declined and underwriting results deteriorated yet again, reported A.M. Best.
While the line is still dealing with the same issues in 2011, A.M. Best said there is some reason to be hopeful as premium growth is on track to be positive for the first time since 2005.
However, as the workersâ€™ comp system celebrates its centennial in 2011, conditions appear grim over the near term, and A.M. Best said it expects underwriting results to weaken further before they get better.
A.M. Best released a report on the state of workersâ€™ compensation. Other key findings in this report:
- Results for the workersâ€™ comp line of business deteriorated sharply in 2010, with the calendar-year combined ratio increasing nearly seven points to 118.1, the highest level since 2000.
- Net premiums written (NPW) for the line fell for the fifth consecutive year in 2010. Premium volume has declined more than 30 percent since NPW reached its high in 2005. While NPW declined for most insurers, a number of companies saw an increase in 2010.
- The top five workersâ€™ comp insurers ranked by NPW in 2010 remained unchanged, with Liberty Mutual Insurance Cos., American International Group (AIG), Travelers Group, Hartford Insurance Group and the State Insurance Fund of New York still leading.
- Through Sept. 15, 2011, negative rating actions outpaced positive rating actions in the workersâ€™ comp segment by more than a 2-to-1 margin. In addition, there were eight rating units affirmed with negative outlooks during this time, and A.M. expects this trend to continue for the remainder of 2011.