October 7, 2022
What: Workers Comp in California could be headed for another overhaul as its premiums are among the highest in the country. Recent reforms have been driving up claims costs and extending benefits, which is putting upward pressure on premiums.
Why it matters: California’s litigation environment can be challenging. We expect the state to investigate the growing number of digital loss control solutions and telemedicine options to help relieve pressure. That being said, it is an important market for many carriers, making it likely they will help collaborate on solutions.
Read: Pressure builds for workers’ compensation overhaul – CalMatters
What: After taking part in a 4-day work week experiment for 3 months, 86% of the participating companies involved said that they are “likely” or “very likely” to continue after the pilot ends. This study is being conducted in the UK, but there are similar large-scale trials taking place in the USA, Scotland, New Zealand and Iceland.
Why it matters: One of the interesting things that we’re watching is how this will affect workers comp, but it’s hard to know in advance what impact it will have. There’s a growing number of pay-as-you-go workers comp policies, so there could be significant cost savings in that area. However, studies show that if employees are overburdened or rushed, they tend to have more work-related injuries.
What: Loss estimates for Hurricane Ian are around $3.8B, and insurance in Florida was already strapped, having lost 6 insurers this calendar year. Florida’s state-created property insurer, Citizens Property, was growing fast and could be among the hardest hit by this natural disaster.
Why it matters: We’ve kept an eye on Florida’s P&C market throughout this year as several carriers failed to secure reinsurance and prices spiked across the board. Now the market is being put to the test. If this becomes a balance sheet event it could turn the industry into a tailspin. With supply chain shortages, labor pressure, inflation, and evolving exposures, this could be the icing on the cake to return a hard market in numerous lines. And the hard market would likely not be limited to Florida.
Read: Hurricane Ian reignites panic for Florida’s strapped insurance market
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