For work comp, the soft market is over

It’s increasingly evident that the way-too-long soft market in workers comp is coming to an end – if it isn’t already over.
The latest news comes from MarketScout (reported by Mark Ruquet in PropertyCasualty360.com), which indicated WC rates were up three percent in December, the highest increase among all P&C lines.
Earlier, Moody’s noted that reserve releases (insurance companies deciding they have too much money set aside to cover future claim costs) for work comp claims had pretty much ended, and ISO reported P&C insurers’ net income for the first three quarters of 2011 had declined by two-thirds from the same period in 2010.
This comes as welcome news to insurers, brokers, TPAs, and has implications for work comp services companies as well. And while employers may not look forward to paying higher premiums, they have to realize they’ve been enjoying a long period of low rates and great availability, factors which have reduced their expense significantly over more years than anyone could have expected.
For TPAs, many of whom have been hanging on by a thread while waiting for employers to once again look hard at self-insurance, this couldn’t come any sooner. Word is there’s been an uptick in proposal requests from employers.
For companies such as York (which just completed another acquisition of JI Companies late in December), Broadspire, Gallagher Bassett, and Sedgwick, this could well be the start of some nice, profitable growth. That is, if they don’t decide to cross the stupid line when it comes to pricing.
What does this mean for you?
Congratulations, you’ve made it through the longest soft market in recent history.