Workers' compensation premiums declined year over year in the first half of 2019, an S&P Global Market Intelligence analysis finds.
Of the top 20 workers' compensation underwriters, 14 reported first-half
Loss ratios among the 20-largest writers of workers' compensation business generally declined in the period, however, pointing to continued industry profitability.
"The main thing we've been observing is an improvement in loss frequency. Workers are basically safer. [It's] been a long-term trend and it continues to unfold," RBC Capital Markets analyst Mark Dwelle said.
Potential risks to that profitability are rising wages and a U.S. economy that continues to grow, he said.
Travelers Cos. Inc. held on to its position as the biggest writer of workers' compensation policies even as its premiums fell compared to a year earlier. Direct premiums earned were off 1.19% at $2.13 billion from $2.16 billion in the first half of 2018. At 46.55%, Travelers' direct incurred loss ratio was second-best among the top five insurers.
"They (Travelers) employ a lot of analytics and they also do a lot on the back end with managing claims to keep their loss ratios low," Dwelle said.
Hartford Financial Services Group Inc., which sits in the No. 2 spot, went against the industry trend as its earned premiums rose slightly to $1.70 billion. Zurich Insurance Group AG rounded out the top three with $1.33 billion of earned premiums in the first half of the year, down 5.59% from $1.41 billion a year ago.
AmTrust Financial Services Inc. fell three spots year over year and two spots from full year 2018 to seventh as its premiums plunged 15.54% to $1.19 billion from $1.40 billion. California's State Compensation Insurance Fund recorded the second-largest percentage decline as its earned premiums tumbled 15.11% to $594.6 million from $700.5 million.
American International Group Inc.'s loss ratio stood out as well above its peers at 90.12%. The company also saw premiums earned fall more than 14% year over year.
Arch Capital Group Ltd. climbed into the top 20 after it recorded a 7.08% year-over-year rise in premiums earned.
