While a number of commercial lines segments' profits improved in 2018, property segments, due to reduced catastrophe-related losses, and workers' compensation touted the lowest combined ratio of any major segment at 86.4%. (Credit: NicoElNino/Shutterstock)
The U.S. workers' compensation market is on track for a fifth consecutive year of underwriting profits in 2019 despite recent weakening in market fundamentals, according to Fitch Ratings. The industry's statutory combined ratio fell to 86% in 2018 and has averaged 93% annually since 2015.
Over the past five years, most large underwriters posted favorable underwriting profits in the workers' compensation segment. In 2018, positive results were partly driven by the recognition of greater reserve redundancies, which totaled approximately 15% of segment earned premiums. But workers' compensation is historically a cyclical and more volatile business, so a shift in the future is always a possibility.
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Denny Jacob
Denny Jacob is an associate editor for NU PropertyCasualty360. Contact him at [email protected].
