Following a profitable year for the industry, the p&cinsurance market will be stable and competitive in 2014, accordingto “Wells Fargo Insurance 2014 Insurance Market Outlook,”which was released on Jan. 30. The report, issued by Wells FargoInsurance, covers a range of product segments, from workers'compensation and employment practices, to property and technologyand network security.

“We expect 2014 to be a good year for the majority of ourcommercial property and casualty insurance customers,” says SimonHodge, head of the Professional Risk Group at Wells FargoInsurance. “We anticipate significant marketplace capacity,excellent coverage quality in many areas, and do not expect a lotof pricing volatility.”

The experts at Wells Fargo Insurance explored what the yearmight hold for the workers' compensation industry specifically. Inthe report, they forecast continued rate increases for thefirst three quarters of 2014, along with continued reductionin the combined loss ratio, resulting from higher prices seenover the past three years.

Other predictions for the workers' comp industry include:

• Expected moderation in rate increases in Q4 resulting in flatto 5-percent increases.
• Moderate reserve releases will further increaseprofitability.
• Continued movement away from guaranteed cost programstructures into higher deductible program structures, eitherbecause they are a more appealing alternative ora necessity.
• If TRIPRA is allowed to expire, then insureds with ahigher number of employees in urban areas and select insuredswith high exposures in rural areas will experiencehigher-than-average rate increases.
• Insureds with guaranteed-cost program structures or poorloss experience will see 10- to 20-percent increases, with higherincreases in problematic states, such as California and NewYork and urban areas.
• Insureds with low deductibles will see 5- to 15-percentincreases.
• Insureds with high deductibles will see zero to5-percent increases
• The continued use of predictive modeling analysis toimprove risk selection, proper retention levels, and pricingwill result in more conservative underwriting by the insurers.

For findings related to other arenas, such as risk managementand overall market capacity and pricing, access the full report.