What does 2010 have in store for the workers' compensation market? The sector can be considered a mix of good and bad news. Aggregate costs for claims remain low, but with ample capacity in the marketplace and continued difficulties in the national economy, including construction and manufacturing, pricing remains weak. Positively, sector fundamentals are solid and in balance, nothing like what we saw at the end of the last decade. In short, claims are down, but so are premiums; the net result is modestly decreased profitability.

The state of the U.S. economy plays a significant role in the workers' compensation market, as does the national employment landscape. Experience shows us that a similar environment has been in place for several years now. Claims frequency has been down for the last 4 years. With an abundance of layoffs, a situation in which seniority rules, the age of the average worker continues to increase.

Reason dictates that this older, more experienced and more capable class of workers is less likely to be injured on the job site, particularly in occupations where the potential for significant injury and loss are the greatest (i.e., construction and similar “heavy” industries).

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