Monday, August 23, 2010

Workers Comp Premium Plunge Not Good News For Employers

In 2009, Workers Compensation insurance premiums plunged. The top 25 WC carriers saw premiums decrease collectively by 13.2%. The entire WC insurance premium volume declined by 12.4%. For some carriers, the decline was more pronounced: AIG saw premiums drop by 22.2%.

This wasn't the result of rate decreases--it was caused by precipitous drops in payroll, as the economic crisis roiled its way through the country. As carriers performed audits for 2009 policies, again and again they saw that large Return Premiums were due policyholders, due to significant declines in payroll.

Now, not only is this bad news for employers in that it reflects slashed payrolls, it also portends an era of tightened underwriting standards by employers. As carriers deal with lower premium volume, they are tightening up their criteria for writing business. The net effect of this will be a significant increase in Assigned Risk policies (and in most states, the Assigned Risk programs carry much,much higher premium charges, and much poorer customer service.)

Oh, and for the folks out in California, their rating bureau, the WCIRB, has announced it wants a rate increase of around 30%. That may never come to pass, due to political pressure, but some significant rate increase seems likely.

So all in all, we would appear to be heading into a period of significantly higher Workers Comp insurance premiums, at least for those employers still in business (more on that in my next post.)

Thursday, August 12, 2010

A Glowing Review For The New Book

Okay, can I share something of which I am inordinately proud? My latest book, Workers Compensation: A Field Guide for Employers, just received a glowing review in the "Workers Compensation Law Section Newsletter" published by the Pennsylvania Bar Association.

The reviewer, David B. Torrey, is a Workers' Compensation Judge in the PA Department of Labor & Industry, and here are a few excerpts from his kind and generous review:

"His chapters on classification and experience rating, meanwhile, may be the most lucid explanation currently available."

The judge also wrote: "I know that I have read and annotated the book repeatedly, and am always picking up nuances that I can relate to the cases that I have heard (and hear) litigated before me."

Judge Torrey concludes his review thusly: "So buy a copy of Mr. Priz' book and take in a critical explanation and account of fronting--and a myriad of other insurance customs, practices, and procedures. Like a new Beaujolais, breathe it in, drink it in, get lost in it, and don't ever let some risk manager catch you unaware on the topic of insurance coverage."

My goodness, I don't believe I've ever heard anyone wax rhapsodic about a Workers' Compensation book, but I am delighted (and humbled) that Judge Torrey has found my work so useful.