Ratings and Rating Services on workers’ compensation insurers could potentially face negative pressures from the last half of 2008, into 2009. Workers’ compensation rates have been declining significantly reducing the margins of insurers that write this business.
In a report, the agency added that so far these declining prices have not led to weak insurer performance because state reforms have contained loss costs and led to better earnings.
Workers’ compensation insurance is highly regulated. Regulations vary in each and every state – that alone could make this a very challenging business.
In the meantime players are left to contend with long-tailed claims, persistently high medical cost inflation and the possibly disruptive effect of periodic reforms and state-run funds.