Workers’ Comp Premiums Drop in 2024, But Claim Costs Are Rising 

As per the National Council on Compensation Insurance (NCCI), workers’ compensation remained strong and profitable in 2024. However, claims costs are starting to rise.  

Premiums Are Down 

According to the report, net premiums fell 3% in 2024 as compared to 2023, being the only drop among all property and casualty insurance lines. “Rates decreased faster than payrolls grew,” the report explained. Or more so, even though more people are working and wages are on the rise, employers are paying much less for coverage simply because the rates have been reduced.  

Despite this decline, the industry remains very profitable. The combined ratio remained the same as last year, holding steady at 86. This marks the 8th consecutive year the workers’ comp line has stayed under 90, demonstrating remarkable consistency in an industry known for its volatility. “The workers’ compensation system continues an era of exceptional performance,” said Donna Glenn, NCCI’s Chief Actuary. 

Change in Claims 

With the system looking healthy overall, claim severity has gone up. 

• Medical claim severity rose by 6% 
• Indemnity claim severity also rose by 6% 

Therefore, if someone injures themselves on the job, the average cost to care for them or to replace their income has gone up, and continues to do so. To add on, lost time claim frequency dropped by 5%, which is a bigger drop than usual.  

Trends by Industry 

According to NCCI, claims look different depending on where people work. For example:  

• Remote workers are filing fewer claims. Office jobs, especially, are seeing lower risk.  
• Fewer claims for restaurants in both 2022 and 2023.  
• Steady drop in healthcare claims since 2015, especially in strain injuries like lifting or bending.  
• Private education claims went up, specifically for injuries due to injuries caused by being hit or struck, possibly linked to workplace violence. 

While the system is still working, it’s somewhat complicated, with some industries doing better than others.  

It’s interesting to note that back in 2004, workers’ comp made up 17% of all commercial insurance. However, now in 2024, it’s down 10%. This doesn’t mean that it is any less important, but other types of insurance, like cyber, property, and liability, are growing faster. 

What This Means for You 

As an employer:

• Premiums are low; therefore, good for your bottom line.  
• Rising claim severity could lead to higher costs along the way.  
• It’s best to invest in safety and managing risks, especially in high-claim sectors like education or healthcare.  

As someone in insurance or risk management:  

• Observe industry-specific trends. 
• Understand remote work, workplace safety, and even violence to see how they are changing claims.  
• Conversations about future rate changes are inevitable if severity keeps rising; therefore, stay prepared.  

The market is still in great shape, with premiums being low and profitability being high. However, signs of emerging challenges can be seen, like rising claim costs, evolving workplace risks, and shifting industry patterns. The best choice for all is to stay informed, act early, and prioritize safety.