Industry experts and economists discussed the impact of COVID-19 on workers compensation in a recent webinar hosted by the National Council on Compensation Insurance (NCCI) and the Insurance Information Institute (Triple-I).A few key takeaways:
- Covid-19 has both direct and indirect impact on workers compensation insurance. Sean Cooper, Practice Leader and Senior Actuary at NCCI, argues that direct COVID claims will have an upward influence on claim costs and frequency, while limited opportunities of returning to work could increase both the cost and duration of claims.
- Common presumptions resulting from proposed legislation and state executive orders are rebuttable. "Workers compensation laws cover injuries arising out of and in the course of employment," said Jeff Eddinger, Senior Division Executive at NCCI. Although it is reasonable to presume that healthcare workers who come in direct contact with COVID patients contracted the virus during the course of their employment, it is important to determine whether other essential workers receive more exposure from work or in public.
- A pandemic catastrophe provision could be a solution to workers compensation insurance in future pandemics. "Traditional methods of calculating estimated impact do not necessarily apply to catastrophic events that have very low frequency and very high severity," concluded panel experts. NCCI is currently engaging with an external modeling firm to determine if a pandemic catastrophe provision would be appropriate for future filings.
You can watch the full webinar here and event highlights here. NCCI also published a white paper on the potential impacts of COVID-19 on workers compensation and enumerated various scenarios in its rates estimation tool.
For more information and resources, go to fairinsure.org.