A new study says rising workers' compensation premiums are more closely associated with decreases in the Dow Jones Industrial Average and interest rates on U.S. Treasury bonds rather than higher claims payments—an assertion challenged by an industry association.
The study was released by the University of California's UC Davis Center for Healthcare Policy and Research, which conducts research on healthcare access, delivery, costs, outcomes and policy.
J. Paul Leigh, UC Davis professor of public-health sciences and senior author of the study, says, “Insurance companies appear to have been setting premiums according to their returns on the stock and bond markets, not according to the number of claims they have. They invest because they need a financial cushion to pay for claims and, if they lose, raise premiums to recoup their losses.”
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