The coronavirus has certainly had a huge impact on our country, and it will likely impact our industry as well, say experts. Higher unemployment numbers and a decrease in payroll totals could lead to declines in comp premiums, even mid-policy.

Premium declines will vary depending on the industries and policy types, but they will likely impact many employers. In addition, disputes arising over premiums could lead to other changes including higher rates.

“With layoffs, payrolls are adjusting,” said Renee Dube, New York-based vice president, national property and casualty practice for USI Insurance Services LLC. Given “that’s how the carriers establish premium”, brokers industrywide “are having those conversations” about reductions, she said.

The Department of Labor’s March jobs report showed 701,000 fewer jobs than in February, with the unemployment rate rising to 4.4%. A report released by the Labor Department on April 2 showed that 6.6 million people filed new unemployment claims the last week of March.

Brokers should advocate for mid-term audits and a reduction in premium where the exposure base of policyholders is lower, Dube said.

“There are a lot of moving parts right now,” she said, including class codes, or industry classifications used in addition to payroll to calculate risks in certain professions. Such class codes could change, since some workers who used to travel for work are now working from home and may be less likely to get injured, she said.

Mark Wilhelm, St. Louis-based CEO of Safety National Casualty Corp., noted that payroll reductions aren’t uniform. For example, the hospitality sector has seen drastic reductions in payroll, but health care, retail, logistics and other sectors continue to employ workers and in some cases are adding employees.

“This is hitting industries very unevenly,” Mr. Wilhelm said, adding that internally Safety National is just beginning to discuss possible premium reductions for policyholders.

“It’s going to be a case-by-case basis,” he said.

Smaller businesses, many of which use pay-as-you-go comp programs, will likely have an easier time adjusting premiums, said Philip Noftsinger, Roanoke, Virginia-based executive president of the consulting firm CBIZ Inc. “Many will adjust automatically,” he said.

Another issue to watch, according to experts, comes from the compensability of workers exposure to the virus. This is generally considered an injury among health care workers, but it could expand to other industries, Mr. Noftsinger mentioned they are getting questions from manufacturing sectors.

Government pressure to provide comp benefits to non-health care workers who are exposed on the job is an issue of concern. Several states have introduced legislation.

“Presumption” legislation that would assume a worker contracted the virus in the course of employment would be an “expansion of coverage…with no ability to charge for it,” said Mr. Wilhelm, who spoke during a webinar hosted by his company and Sedgwick Claims Management Services Inc.

“Some states have even tried to include all essential workers. That would take in grocery stores, liquor stores…Anyone who contracted COVID-19 would have presumed to have gotten it in the workplace,” he said.

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