Some surprising news from workers’ compensation providers may lead to higher premiums in the near future.
Liberty Mutual Group, the nation’s largest workers’ comp insurer, says companies are reporting more employee injuries, which is the opposite of what normally happens during a recession.
Normally during an economic downturn, companies lay off less experienced workers who are more likely to get injured.
But claims data gathered by Liberty Mutual Group show injury frequency is edging up.
George Neale, Liberty Mutual’s executive VP and general claims manager, says it’s too early to tell what’s driving the increase.
Meanwhile, Liberty Mutual’s CEO is quoted in The Wall Street Journal as saying that workers’ comp is a “time bomb” for insurers.
Edmund Kelly said workers’ comp is largely unprofitable while inflation is low.
Kelly said Liberty Mutual is “willingly reducing our exposure” because of concerns about inflation come 2014 and 2015.
That means the company is less likely to issue workers’ comp policies in some cases, which may have the effect of driving up premiums with less competition.