According to the latest “State of the Line Report” from the National Council on Compensation Insurance (NCCI), the workers’ compensation Calendar Year 2018 combined ratio for private carriers was 83%. This is the fifth consecutive year that comp has posted an underwriting gain. Total market net written premium volume increased to $48.6 billion in 2018.

The industry-reported combined ratio was 97% for accident-year 2018, and NCCI expects this accident year’s combined ratio to develop favorably over time.

NCCI’s Chief Actuary Kathy Antonello said the combined ratio of 83 is the lowest on record since the 1930s. It was 89% in 2017.

“The industry’s favorable combined ratio results over the last several years has been primarily driven by notable improvement in the underlying loss ratios. Underwriting discipline appears to have contributed to these results in what seems to be a perpetual low interest rate environment, with low investment returns,” said Antonello.

Other findings from the report include that, as of Year-End 2018, the overall reserve position for private carriers is a $5 billion redundancy. A redundant workers’ comp reserve position has not been observed in at least 25 years.

On a preliminary basis, average lost-time claim frequency across NCCI states declined by 1% in 2018. In NCCI states, the preliminary 2018 average indemnity accident year claim severity increased by 3% relative to the corresponding 2017 value. Medical lost-time claim severity increased by 1%.

The workers’ comp Residual Market Pool premium volume was approximately $1 billion during 2018, representing a residual market share of about 7%.

Read the press release here.