AM Best Sees WC Remaining Profitable as Combined Ratio Falls

• AM Best expects the U.S. workers’ compensation insurance segment to remain profitable but forecasts its combined ratio will decline to 93.0% this year from 89.0% in 2024.
• “Results appear to have reached an inflection point with incurred losses beginning to tick higher,” AM Best said in a commentary.
• The ratings firm has maintained its stable outlook on the segment, citing expected sustained profitability expected in line with recent years and results benefiting from favorable prior-year reserve development.
• Offsetting factors include projected loss reserve deficiency anticipated to increase at year-end 2024 year over year, resulting in a weaker reserve position.
• Sustained rate declines are expected to begin to pressure the loss and loss-adjustment expense ratio.
• The segment’s net premiums written are expected to remain flat for 2024 because of the soft rates. This is despite sustained low unemployment data combined with monthly job creation.
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Pennsylvania Cuts Rates Near 9%

• Pennsylvania officials have approved an 8.67% reduction in loss costs, a change expected to lower insurance premiums for businesses across the state.
• The cut was derived from a loss-cost filing by the Pennsylvania Compensation Rating Bureau, the independent entity representing workers’ compensation insurers in Pennsylvania.
• Approximately 370 insurance companies currently offer workers’ compensation coverage in the state.
• The reduction in loss costs took effect on Tuesday.
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