In this time of tremendous distress for the financial services sector, the workers' compensation industry continues to function quite well, with active competition for business and a shrinking residual market.

In fact, the calendar year and accident year underwriting results are approaching break-even status, which is a necessity in this investment climate if the industry hopes to earn a reasonable return on its capital.

However, a low-interest-rate environment that has persisted for several years, combined with the dismal short-term performance of the equity markets, continues to leave the line with post-tax returns that barely meet the industry's cost of capital.