Staggering cost of COVID-19's impact on US workers' compensation revealed – report

Staggering cost of COVID-19's impact on US workers' compensation revealed – report | Insurance Business America

Staggering cost of COVID-19's impact on US workers' compensation revealed – report

Regardless of the differences in claim counts and loss activity per state, the impact of COVID-19 on America’s workers’ compensation industry is considerable, a new report from the National Council on Compensation Insurance (NCCI) has revealed.

The report is a cross-bureau collaborative effort among the various workers’ compensation bureaus of 45 states, as well as the NCCI. States that participated in the report include California, Delaware, Indiana, Michigan, Minnesota, New Jersey, North Carolina, Pennsylvania, and Wisconsin, which contributed claim and loss activity information during 2020. The analysis did not include claim and loss experience from self-insured employers or denial and expense-only claims.

According to the report, the 45 jurisdictions analyzed by the report represent $630 million in incurred loss dollars, across some 80,000 COVID-19 claims last year. Of the states analyzed, California had the most COVID-19 claim counts in 2020, with more than 6,000.

Other findings of the report include:

  • For the 45 states included in this analysis, COVID-19 claims represent 11.0% of total claims counts and 3.5% of incurred losses.
  • Indemnity-only claims emerged as a significant share of reported COVID-19 claims.
  • In aggregate, COVID-19 claims that remained open have relatively higher case reserves due to the uncertainty of COVID-19 infections, later than average accident dates, and the timing of the various waves of the pandemic.
  • COVID-19 indemnity claims closed more quickly than non-COVID-19 indemnity claims, partly driven by the large share of indemnity-only claims.
  • Despite the higher closure rate, the ratio of paid to paid plus case losses on COVID-19 claims is lower when compared to that for non-COVID-19 claims.

To further discuss the analysis of the collaborative report, the NCCI is inviting industry stakeholders to participate in a webinar on January 20, 2022. The webinar is open to all and is free to access at no additional cost.