US workers' comp premiums tick up YOY in Q2; Markel enters top 20

A majority of the 20 largest U.S. workers' compensation underwriters saw their direct premiums earned increase year over year in the second quarter, with Markel Corp. recording the biggest growth at 46.3%, according to an S&P Global Market Intelligence analysis.

That increase for Markel pushed it into the top 20 list, up from No. 29 year earlier and No. 24 in the second quarter of 2019.

Direct premiums earned for the entire workers' comp industry amounted to $12.40 billion, up from $11.84 billion in the second quarter of 2020.

Though it retained its spot as the top writer of U.S. workers' comp policies, The Travelers Cos. Inc. recorded a 1.6% dip in premiums earned on a yearly basis to $908.3 million.

Speaking during Travelers' second-quarter earnings call, Gregory Toczydlowski, executive vice president and president of business insurance, said the company had expected the worker's comp market to hit bottom earlier, but the COVID-19 pandemic disrupted that. However, there has been "clearly" favorable frequency activity of late, he said.

The Hartford Financial Services Group Inc., which held the No. 2 spot in the second quarter, saw premiums earned rise 6.2% to $784.1 million. The company in a Form 10-Q filing said its increasing exposure base from stronger payrolls as the domestic economy recovers from the pandemic have boosted earned premiums.

American International Group Inc. was the only insurer to log a double-digit year-over-year decrease in workers' comp direct premiums earned in the second quarter. The company's net premiums earned totaled $282.4 million, down 14.2% from the year-ago period.

The industry's loss ratio in the second quarter was 48.8%, up from 45.6% a year earlier. Fairfax Financial Holdings Ltd. posted the lowest loss ratio among the largest underwriters for the second consecutive quarter.

A Fitch Ratings report published in June projected that workers' compensation underwriting performance would remain strong through the year with favorable results driven by recent reductions in claims frequency and further recognition of material reserve redundancies.