NCCI: WC frequency keeps dropping

The frequency of claims per 100,000 workers fell 4.0% in 2009 and likely kept falling this year, though claim size keeps growing. Business Insurance passes along the highlights of NCCI’s analysis (pdf).

Since 1991, frequency is down nearly 55%. Check this table of frequency change by year:

Getting better all the time.

NCCI has plenty of reasons, which I crib heavily:

  • Global competition has fostered advances in automation, technology, and production, such as the following:
    • Increased use of robotics
    • Increased use of modular design and construction techniques
    • Increased use of power-assisted processes
    • Advances in ergonomic designs
    • Proliferation of cordless tools
  • The aging of the workplace has put downward pressure on claim frequency because older workers tend to have fewer workplace accidents.
  • Emphasis on workplace safety and loss control has continued.
  • Benefit reforms of the early 1990s have tightened compensability standards.

Less rosy: Indemnity claims continue to rise faster than inflation:

Uh-oh.

I’ll take a moment to note that the 2009 gap between the growth in indemnity payments and the growth in average weekly wage is 4.5% – (1.0%) = 5.5%. That’s the biggest gap since 2001.

And medical severity is growing faster than Medical CPI, though the gap isn’t so striking:

Rising with the tide.

Most of the NCCI report breaks down the frequency statistics by size of claim, size of insured, industry group, etc. Definitely worth a look.

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