ORLANDO,FLA.–The chief executive of the National Council on Compensation Insurance said members of the comp insurance industry should be proud of their business and ignore negative press.
Speaking to attendees at the NCCI Annual Issues Symposium here yesterday, Steve Klingel said it was a misconception that the workers' compensation system is not working well.
It is, he said, "a public-private system that works effectively overall, if not perfectly" and he said he wanted to get industry participants to "feel good and hold your heads high…we play a key role in an important endeavor."
He noted that the workplace has consistently become safer with injury claims continuing to decrease.
Some of this, Mr. Klingel said, could be attributed to factors such as increased use of robotics in the workplace, risk management discipline.
A "huge motivator," he said is the structure which allocates the cost of injury to employers.
He pointed to studies that have found 77 to 80 percent of injured workers are highly or somewhat satisfied with their medical care, commenting that "employees are getting what they need out of the systems."
Employers, said Mr. Klingel, on an overall basis, are seeing comp represent just under 2 percent of their total employee cost and over the past 15 years it has been within that 2 percent range.
"That stability helps our economy," he commented, while noting that individual employers may see volatility.
He said employers with safe workplaces and good experience ratings strive to keep them so they get good rates and those with bad experience ratings have an incentive to improve to lower insurance costs and be more competitive.
Mr. Klingel noted that the percentage of self insured employers has increased to 24 percent of the market and other businesses are operating with greater deductibles, factors, he said, that are "a great motivator to manage loss potential."
Despite public criticism of their profits, Mr. Klingel said their results were neither reasonable or excessive, noting that on an underwriting basis firms had been profitable only twice in the last 30 years and had made money only because investment returns averaged 14 percent over those decades.
Return on surplus, he noted, averaged just under 8 percent "a fair return given the risk, I would argue."
Mr. Klingel said despite critics who browbeat the industry, his message is that "the system works effectively and honorably and we should hold our head collectively high."
© Arc, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to TMSalesOperations@arc-network.com. For more information visit Asset & Logo Licensing.