You are currently viewing 2023 Insurance Workers Comp Update for Home Health

2023 Insurance Workers Comp Update for Home Health

Impact from COVID and the increases in wages that took place in 2021 are still impacting the insurance market today.

Today’s Conditions

Workers Comp rates have continued to come down for this industry sector at a remarkable rate over the past several years.  This was primarily a result of employees seeing double digit pay increases in the past few years.  WHY?  The increase in wages did not necessarily represent a true “exposure” increase for the carrier, so rates were driven down at nearly similar factor.  Carriers quickly noticed that employers had overwhelming increases in payroll from year to year, however, employee counts were almost stable.  With many employers offering higher wages and aggressively seeking employees with company perks, fewer and fewer employees would contribute to the burden of fraudulent workers comp claims for falsified injuries.

In addition, for a lengthy period of 2020 and even into 2021, many courts were just beginning to climb out of the backlog of legal cases filed.  Criminal cases would take priority over wrongful injury and workers comp type claims, and so some of the larger legal Reserves didn’t come to light immediately on an insured’s Loss Run.

New workers comp carriers had entered the space in the past few years.  With rates at already all-time lows and with more competition, not only is the size of the pie shrinking, but each carrier is getting a smaller and smaller piece of the pie as there are more mouths to feed each year.

Future Conditions

Similar forces could continue into 2024, and then as operating margins of carriers dwindle, the initial impact may be carriers exiting the space entirely.  Those new entrants that decided to dabble in this space and those that do not have solid A.M. Best Ratings may be the first to fall.  The dropout of carriers is the first signal to the rest of the marketplace of financial distress.

As the complete claims picture comes into full view with accurate claim reserving, the additional impact of medical inflation will further stress the overall workers comp market.  Underwriter operating costs for wages will also continue to increase.  All of these past and current factors will eventually lead to the beginning of substantial rate hikes across many states.

MPL Risk – We’re an insurance brokerage firm specializing in serving the Healthcare industry.  We help many of our clients navigate various insurance market conditions by aligning the business with appropriate coverages and carriers.  Our carriers can Quote Workers Comp Insurance, Liability and Malpractice Insurance, Auto Liability, EPLI, Cyber Liability, and many other lines of coverage.  Call Us Today (267) 888-4790!