NCCI Answers the Question: What Impact Do Recessions Have on Workers Compensation Insurance?
BOCA RATON, Fla., Oct. 17, 2019 /PRNewswire/ — The National Council on Compensation Insurance (NCCI) released its Quarterly Economics Briefing (QEB), which examines how recessions affect the workers compensation insurance system through the impact on overall levels of employment, payroll, and the frequency of workplace injuries.
«NCCI’s Quarterly Economics Briefings investigate important topics in the US economy, helping stakeholders understand the related impact on the workers compensation system,» said Bill Donnell, president and CEO of NCCI. «This quarter, we looked at the effects a recession would have on our industry.»
«Using data from the Great Recession, as well as hypothetical future scenarios, we find the primary factor is the decrease in the overall level of employment and payroll normally associated with recessions,» said Patrick Coate, NCCI economist and report author. «In addition, recessions impact injury frequency due to the change in overall workforce composition. These are important considerations for insurers, regulators, and employers alike.»
Key takeaways from this quarter’s QEB include:
- The employment share in sectors with high injury frequency and short-tenured workers (who have higher frequency than longer-tenured workers) falls during a recession
- In a future recession, payroll losses and the decline in injury frequency due to changes in workforce composition are likely to be milder than in the Great Recession
To read the full report, click here.
Founded in 1923, the mission of the National Council on Compensation Insurance (NCCI) is to foster a healthy workers compensation system. In support of this mission, NCCI gathers data, analyzes industry trends, and provides objective insurance rate and loss cost recommendations. These activities—combined with a comprehensive set of tools and services—make NCCI the source you trust for workers compensation information.
NCCI Media Contact
Dean W. Dimke, Public Relations & Communications Director
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SOURCE National Council on Compensation Insurance (NCCI)