The workers’ compensation space is facing new challenges as claims costs rise.
So what’s the outlook for the industry? Kevin Combes, director of US casualty claims, global risk and consulting and commercial risk solutions at Aon, recently participated in IBA’s Workers’ Comp Power Panel. During the panel, Combes talked about wins and losses for the workers’ comp space over the past year, as well as the impact of COVID-19 on the sector.
“In terms of wins, I would have to say – and I probably have a unique perspective here – but I would say that the proliferation of bespoke and tech solutions are driving really significant improvements in efficiency throughout the claims process,” Combes said. “I mean, if we think about commercial auto as a prime example of how these kinds of mobile applications have really smoothed out the claims process and really accelerated those types of claim resolutions, I think that’s a definite win.
“We’re seeing more and more tech. The investment in insurtech last year was as big as it’s ever been,” he said. “So I’d say that’s definitely a win, because the industry definitely gains from all this innovation.”
Combes said that one of the challenges the industry was facing was an exodus of talent.
“In terms of losses, I would have to say that the Great Resignation – the talent departing the industry right now – I think is a really significant factor,” he said. “It’s one that is going to be challenging throughout 2022 – to find and retain and develop the kind of talent that we’ve seen leave the industry. I think that’s going to be a big loss at the end of the day.”
Combes also said that the COVID-19 pandemic presented challenges to industry that impacted the workers’ compensation space.
“The first major challenge was the transition, the massive pivot that had to occur for people to work from home,” he said. “...It presented huge technical challenges for a lot of large organizations that didn’t have the IT infrastructure to support all of those people working remotely. … And we’ve seen all sorts of subsequent challenges. I mean, just in terms of the long-haul COVID claims, and who knows how those are actually going to bear out? … So there’s a lot of challenges, and I don’t think we’re at the end of it.”