Workers' comp state funds now control a quarter of the insured workers' comp market, despite the fact they only write in 25 states, according to a new study by Conning Research and Consulting.
The study, "Workers' Compensation State Funds: Evolution of a Competitive Force," analyzes the role of state funds and their competitive positioning versus the traditional workers' compensation marketplace, and alternative forms of workers' compensation risk financing. The study reviews state funds' financial and market share results, their effects on the overall market and prospects for future growth.
"In comparison to the industry as a whole, state funds' loss ratios are higher, but they compensate with lower expenses and increased investment income," said Mark Jablonowski, analyst at Conning Research & Consulting.
He said that operating results are on par with the rest of the workers' compensation industry. As for why state funds have shown such strong financial results and grown so rapidly, Conning pointed to their dedication to loss prevention and control.
"Our research indicates that a key to the state fund success may well be their dedicated approach to loss prevention and control," said Stephan Christiansen, director of research at Conning. "Their mission often includes shared responsibility for health and safety with other state agencies, and so they often incorporate state-of-the-art loss prevention initiatives with financial rewards tied to the insured's loss performance."
21 2-resize-380x300-resize-380x300-resize-380x30050-crop-215x144.jpg)
