SG: I think there are four key takeaways from the report:

The WC sector is structurally correlated to the macro economy and the labor markets. The US economy has added five million jobs during 2015–2016, which led to a stable performance, although increased competition will lead to margin compression in the next couple of years.
WC business is highly cyclical and is one of the most competitive commercial lines, and therefore vulnerable to pricing volatility. In aggregate, we expect WC pricing to fall modestly over the next couple of years, assuming a stable business environment. However, given the low interest rate environment and the generally long duration of WC reserves, we expect pricing declines to remain controlled in the current market cycle. It's also important to remember that an individual insurer's rates could vary, depending on its risk profile, industry sectors and the states in which it operates.
Increased use of opioids is a growing concern for insurers as well as state legislatures, prompting states to adopt stricter regulations and controls around these substances.
Big Data and machine learning will likely shape future markets. The emergence of artificial intelligence (AI), machine learning and big data will improve the underwriting and efficiency of processing the business. Some commercial insurers have already begun applying natural language processing to workers' compensation claims files (doctors' notes and prescriptions) to preempt complications from claims likely to be complex (for example, by flagging such things as opiate abuse, diabetes or obesity or other co-morbidities). Insurers are using big data and predictive analytics to comb through social media feeds for evidence of fraudulent activity, notably in workers' compensation or injury cases. Given the extensive amount of data analyzed and used by insurers related to workers' compensation claims, those insurers who fall behind in data analytics will be subject to adverse selection. However, advancements in automation and technology will change the nature of work and the underlying exposures in various industries over time as more routine tasks are automated.

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Workers’ comp market shows underwriting profit but compression ahead, says Moody’s report

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