Expert Commentary

NCCI Annual Issues Symposium—2015

Presentations from the 2015 NationalCouncil on Compensation Insurance (NCCI) Annual Issues Symposium are available on the organization's website. The meeting again offered insightful information on the state of the line as well as a wide range of issues facing the workers compensation industry and the insurance industry at large.

Workers Compensation Issues
June 2015

NCCI President and Chief Executive Officer Stephen J. Klingel, CPCU, WCP, opened the symposium with an overview of the current workers compensation environment. In his presentation, "Workers Comp Outlook: Indicators, Issues, and Industry Success," Mr. Klingel discussed several issues that would be recurrent themes in the presentations that followed. In his opinion, the key principles of the workers compensation system are under attack—from such basics as who is an employee and what is considered a workplace in the age of mobility and Uber, to ongoing court challenges related to exclusive remedy and benefit levels. Of particular importance, he stated that benefits and rates must be in balance for a healthy system. "At its best, it is a cooperative system that is equitable and balanced." But Mr. Klingel believes that the stakeholders in the workers compensation process are prepared to face the challenges.

State of the Line

NCCI Chief Actuary Kathy Antonello, FCAS, FSA, MAAA, delivered a comprehensive review of current workers compensation results in her presentation on the "State of the Line." She began by providing an overview of the property-casualty market results before delving into data specific to workers compensation. Of particular note is that the workers compensation calendar year combined ratio dropped for the third straight year. The ratio for 2014 is 17 points better than it was in 2011. Also of note is that claim frequency dropped another 2 points from 2013 and that the residual market share remains unchanged from 2013. All of these results serve as an indicator that the line is currently relatively healthy. Additional information about the presentation can be found in this NCCI summary.

Insurance Industry Outlook

Insurance Information Institute President and Economist Robert Hartwig, Ph.D., CPCU, offered his view of the state of the current property-casualty insurance market along with some thoughts on where he believes the workers compensation environment is headed in a presentation titled "The Workplace of Tomorrow: The 'On-Demand' Economy and Implications for Workers Compensation." After discussing the relative calm in which the industry finds itself, he turned his sights to the trials facing workers compensation. Echoing the thoughts of Mr. Klingel, Dr. Hartwig talked about the challenges to exclusive remedy and the rise of the opt-out agenda in a handful of states and offered both optimistic and pessimistic predictions as to what the future will hold for the American worker.

A Glimpse into the Future

Salim Ismail, founding executive director, Singularity University, and former Yahoo vice president, provided very thought provoking insights into the future in his presentation entitled "Disruptive Convergence: Jaw-Dropping Insights Into Breakthrough Technologies." Mr. Ismail discussed the impact that technology has in reshaping our world. Of particular note, as respects workers compensation, is that he believes that evolving technology will result in the need for fewer workers and that the concept of jobs will eventually disappear. Mr. Ismail also discussed the issue of the blurring of the line between employee and contractor. As an example, he offered that Uber has taken the position that it is simply a software application that allows the interaction between service providers and customers and should not be considered the employer of drivers who use its application to connect with potential users.

The State of the Economy

In "US Macro Outlook: In a Virtuous Cycle," Moody's Analytics Senior Economist Adam Kamins presented a positive spin on the economy. He provided an upbeat forecast, citing lower oil prices, aiding consumer spending, and increased home building starts due to pent-up demand as two of the factors driving an upturn in the economy. Mr. Kamins did, however, offer a caveat about the optimistic economic forecast. He advised that there should be concern regarding the stagnant economies around the world (i.e., China and Russia) as the export of US goods and commodities, along with tourism, is hurt by the strong dollar.

Workers Compensation Regulatory/Legislative Environment

NCCI Division Executive—State Relations Lori Lovgren, J.D., CPCU, and NCCI Practice Leader and Senior Actuary Ann M. Bok, FCAS, MAAA, offered an in-depth review of "Regulatory and Legislative Trends." The presentation began with an overview of countrywide developments and then drilled down on specific topics related to premium, results, rate filings, indemnity/medical, and residual markets in the jurisdictions that NCCI serves as the statistical agent.

Workers Compensation Research Topics

Again this year, the symposium provided a forum for the presentation of studies related to key workers compensation issues. NCCI Practice Leader and Senior Actuary Barry Lipton, FCAS, MAAA, offered three studies: "State Differences in the Treatment of Joint Injuries—Preliminary Results," "Time From Injury to Treatment in Workers Compensation—Preliminary Results," and "Report Lag and Claim Severity," while NCCI Practice Leader and Senior Actuary Natasha Moore, FCAS, MAAA, presented her findings on "The Impact of Workers Compensation Rx Fee Schedules."

Additionally, Workers Compensation Research Institute President and Chief Executive Officer, Richard A. Victor, J.D., Ph.D., and California Workers Compensation Institute President Alex Swedlow provided their thoughts on "Best Practices for Workers Compensation Medical Cost Containment." Dr. Victor offered findings on "Regulating Physician Dispensing," while Mr. Swedlow reviewed "Controlling Quality of Care and Cost: The Form and Function of Medical Dispute Resolution."

Opinions expressed in Expert Commentary articles are those of the author and are not necessarily held by the author's employer or IRMI. Expert Commentary articles and other IRMI Online content do not purport to provide legal, accounting, or other professional advice or opinion. If such advice is needed, consult with your attorney, accountant, or other qualified adviser.

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