Spółka i firma w UK - Faltering Economy Rising Costs Make For Higher Excess Workers Comp Premiums

Faltering Economy Rising Costs Make For Higher Excess Workers Comp Premiums

30 mars 2017 @ 15:16

Companies that purchase excess workers compensation insurance are likely going to be find an unpleasant (and pricey) surprise when the time comes to renew their coverage, say industry experts, who report that insurance companies' combined ratios have declined while costs of claims have climbed. The combination means that premiums for coverage will grow as insurers attempt to maintain their profitability levels. Insurers point to a number of reasons that have driven up costs, including ever-increasing medical costs, as well as increases in claims costs resulting in part from the lackluster economy-injured workers are having a tough time returning to work after rehabilitation. The nationwide combined ratio for this line of business was, at 117 percent, the worst in a decade and worse than the performance of other lines. Capacity in this market is shrinking, with one major insurer leaving the business and others being acquired by larger companies.
This coverage is often purchased by those who wish to self-insure for the majority of loss exposures that they expect to encounter in the year, yet want to buy a policy to offer protection for major, catastrophic risks. The policy is available in two categories; the former approaches loss from a severity standpoint, while the latter handles loss on a frequency basis. Specific coverage places a limit on losses that the policyholder is financially responsible for in one covered claim while aggregate coverage is activated at the point when a cumulative, per-occurrence loss limit is reached.
Employers intent on purchasing excess workers compensation insurance that are fortunate enough to have an excellent loss experience will always be the desirable accounts that insurers want to have on their books for the long term. However, even those favored policyholders may see increases of five to seven percent in their premiums when renewal time comes around. Those employers whose loss experience is greater will undergo closer scrutiny from underwriters, which again translates into higher prices. Industry experts also report that the increased number and extent of claims may have some basis in the faltering economy, which has seen a strong uptick in layoffs, reductions in force, and work furloughs.
Work with an industry expert for creative solutions
To obtain the best rates from top-rated insurers in the industry, work with a professional insurance advisor. An advisor with experience in this line of business can help identify the exposures that the business is facing and help reduce the frequency and/or severity of claims that drive up premium rates.
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