Comp Injury Frequency Falls Again, NCCI Finds

NU Online News Service, July 8, 12:34 p.m. EDT

The major data group for the workers' compensation insurance industry said preliminary figures show claim frequency fell 4 percent in 2008 and is likely to decline again this year.

However, the study by Boca Raton Fla.-based National Council on Compensation Insurance also found the cost of lost wage claims has been rising above wage levels--5 percent in 2008 compared with a 3.7 percent increase in wages.

Also rising are the medical costs of claims projected as a 6 percent increase for 2008 compared with the 3.7 higher wage rate.

Still, compared with past years of increases in indemnity severity, that trend has slowed, reflecting limited wage growth in the recession, NCCI reported. Economic factors should also reduce claim frequency in 2009, the company said.

NCCI researchers found that a "noticeable exception" to the decline in frequency are high-cost permanent total disability claims--driven primarily by workers age 50 or under. "It wasn't older workers," the report said.

For claim frequency, "virtually every major employment category examined has experienced a marked decline," said NCCI.

NCCI said for its study it compared the latest available statistical plan data for states for which it provides rate-making services to the same data from four years prior. Most analyses in the study compare policies that expired in 2007 to policies that expired in 2003.

NCCI listed among its key findings:

o Over the last five years, there were significant declines in total lost-time claims frequency for all industries, geographic regions and employer sizes.

o The number and frequency of permanent total disability claims have increased significantly over the last four years, with all major causes of injury contributing to the rise.

o While claim frequency generally decreases as risk size increases, single-state risks in some classes have higher claim frequency at the higher payroll sizes than at lower payroll sizes.

NCCI said the industry group with the most lost-time frequency in 2007 was contracting. In that same year the region with highest frequency was the West. The biggest cause for claims was vehicle injuries.

Among previously reported trends lowering frequency, NCCI said, are increases in robotics use, modular construction, power-assisted processes, cordless tools and ergonomic design.

Also mentioned is a workforce with older workers who have fewer injuries, better job training, workplace safety emphasis and improved fraud deterrence.

The study, "Workers Compensation Claim Frequency Continues Decline in 2008," is online at https://www.ncci.com/nccimain/IndustryInformation/ResearchOutlook/Pages/WCClaimFrequency2008.aspx