In a May report, the National Council on Compensation Insurance (NCCI) described the condition of the workers' compensation market as "deteriorating." In making that assessment, we pointed to a number of significant challenges confronting market stakeholders, including: 

• Premium decline—2010 net written premium for workers' compensation private carriers declined another 1.3 percent (a disturbing trend, albeit this was a much smaller decline than those of the prior two years).
• Deteriorating underwriting results—With investment yields at historic lows, the current levels of underwriting losses are not sustainable. 
• Claim frequency—It is unclear whether an upward tick in claim frequency is a "new normal" or a one- or two-year phenomenon coming on the heels of the Great Recession.
• The political situation in Washington, D.C.—With the enactment of the financial reform bill and the establishment of the new Federal Insurance Office, the influence of the federal government over property & casualty insurance issues is likely to increase significantly. 
• The health care reform bill—The impact of this bill on workers' compensation insurance remains uncertain.
• Rising medical expenses—The average medical cost per lost-time claim increased 2 percent in 2010.

In dealing with many of these challenges, the market will need to wait for the economy to spring back, or for employers to once again begin meaningful hiring, or for our leaders in Washington to agree on a final disposition of national health care.

That is not to say, however, that there are no actions that can be taken to reduce system costs. One area in particular that appears ripe for attention is the growing issue of obese workers and the extra costs those workers cause the system.

A Growing Epidemic
As any casual observer of the news knows, the incidence of obesity in the U.S. is growing dramatically. Intuitively, the implications of this trend for workers' compensation are disturbing.