February 20, 2018

Workers Comp Claim Frequency Is Up for the First Time in 5 Years

NCCI is the largest U.S. provider of workers’ compensation data and they have produced a report showing that for the first time in five years, the frequency of workers’ compensation claims increased.  The increase is probably due in part to a confluence of factors stemming from the ongoing economic recession.

NCCI report findings…

  • Claim frequency for workers’ compensation injuries increased by 3% in 2010, marking the first increase since 1997
  • Claim frequency had been declining at an average rate of 4.3% per year since 1990, with only 1994 and 1997 seeing increases
  • Even though claims frequency was up, the increase in average indemnity and medical costs per claim decreased in 2010

NCCI attributed the increase in claim frequency to 3 key factors..

  1. A shift away from the construction industry in 2010, which was significant because the construction industry generally has a lower frequency per premium collected than other industries
  2. The recession has set off an increase in the average number of hours worked per week for the first time since 2008 (up 0.6%)
  3. Overstatements in final payroll estimates, which resulted in an increased number of audits and returned premiums

The shift away from construction and the increase in number of hour worked attributed for only 1% of the 3% increase, but the overstatements in final payroll estimates accounted for the other 2% of the total 3% increase.

The report also mentioned one less key contributor to the 2010 increase was that many workers opted to delay filing claims until 2010 being fearful of losing their jobs in 2009 and now have filed since the economy made modest improvement in 2010.

With an increase it claims, It’s very important to be represented well by your Workers Comp Administrator.

Contact United Comp (513) 891-4785 if you have any questions about any of your workers compensation related issues.