Actuarial Analysis of
Workers' Compensation Programs
Many clients use a combination of self-insurance and "excess
insurance" or reinsurance to handle their workers' compensation losses. Many California clients have seen workers'
compensation costs increase rapidly between the 1990's and 2003 and then fall just as rapidly until 2006. Costs
have been increasing since 2006 and the outlook for the future is very poor. Workers' Compensation costs, which were
once a merely an annoyance, have become a serious problem for many employers.
A client's annual actuarial
report, which was once a routine item on Management's check-list, is now a much more important document.
changed how we analyze workers' compensation. We now put more than twice as much time and effort into a
typical workers' compensation analysis than we did in the 1990's. As the actuary for several large workers' compensation
JPA's we continually analyze current databases containing hundreds of thousands of workers' compensation
claims. Most of the extra technical work is "below the surface" of what appears in a client report. See our Technical Approach discussion for some details.
This extra effort pays off. Over the past several years we
have delivered consistent, reasonable estimates and projections to our clients.
How We Can Help
- Provide reasonable, consistent estimates of self-insurance liabilities;
- Provide a detailed analysis of self-insurance Capital requirements;
- Recommend the most favorable self-insured retention ("SIR");
- Provide valuable advice on future Assessment Risk when considering an "excess" workers' compensation JPA.