The nation’s largest workers’ comp insurer says it’s tracking an odd trend this recession – and as a result, employers are likely to see their comp premiums increase.
Liberty Mutual Group’s latest statistics show that injury rates are climbing, which runs counter to what normally happens in an economic downturn.
During a down economy companies ordinarily terminate less-experienced workers who are more likely to be injured on the job. That would lead to a reduction in injuries and lower premiums, according to Liberty.
But for reasons that are still unknown, injury rates appear to be on the upswing. George Neale, Liberty’s executive VP and general claims manager, says it’s still too early to tell what’s driving the increases.
And if the trends they’re seeing are accurate, Neale says it could cause major challenges for claims payers.
Meanwhile, Liberty’s CEO Edmund Kelly has been quoted in The Wall Street Journal as saying that workers’ comp is a “time bomb” for insurers.
According to Kelly, workers’ comp is largely unprofitable during times of low inflation. He then said Liberty Mutual is “willingly reducing our exposure” due to concerns about inflation in the coming years.
That could mean the company may be much more selective about the businesses it issues comp policies to. And that could have the effect of driving up premiums due to the fact that there’d be less competition in the market.