Imagine navigating through a labyrinth where each twist and turn brings new challenges. For insurance agents trying to place workers’ compensation risks, that can be a daily reality. Just as you think you have a handle on the path ahead, inflation shifts the walls of this maze, making it even more complex. Hidden within this intricate network are medical cost increases, varying state regulations, and the ever-present threat of escalating expenses.
Let’s unravel the threads of this complex web, guided by the latest findings from the Workers’ Compensation Research Institute (WCRI), so you can better understand what it means for you and your clients.
Eye-Opening Findings from the WCRI Report
Given recent findings, the fact that the impact and administration of workers’ comp can differ significantly depending on location is especially relevant. The WCRI’s latest report reveals that states tying their workers’ comp fee schedules to general inflation — such as Alabama, Delaware, Illinois, and Oregon — have experienced more significant increases in medical costs. General inflation, which spiked at 9% by June 2022, has substantially impacted these states compared to those that base their fee schedules on Medicare rates. Over 40% of states reported increases in workers’ compensation costs, with medical expenses rising between 2% and 10%, primarily driven by hospital payments, provider consolidation, and medical labor shortages. Florida, for example, reported a 7% increase in total cost per claim (2022-23), with higher wages and longer durations of temporary disability benefits as the cause.
Jeff Sandy, Vice President of Workers’ Compensation Brokerage for Jencap Insurance Services, provides a grounded perspective: “We aren’t seeing this increase passed through to insureds as a general comment. Illinois continues to be worth monitoring as it has been identified as one of the lead states when changes occur.” Knowing these trending facts and figures within the workers’ comp space helps you anticipate changes and strategically plan your offerings for relevant clients.
A Growth Opportunity in the Making
A partner like Jencap helps you stay informed, even if this isn’t your area of expertise — which ultimately helps you win, service, and keep more business. Jencap specializes in providing workers’ compensation solutions tailored to the needs of diverse industries, including high-hazard operations. With access to over 70 monoline workers’ compensation carriers, we can accommodate all premium sizes, multi-state accounts, new ventures, and more. Interested in learning more? Get a quote today!
