The main items in a report are the estimate of the self-insurance liability and the funding recommended for next year. We include an extensive discussion and analysis of the findings and conclusions.

Workers’ compensation (“WC”) is characterized by:

  • A relatively large number of claims;
  • A long “tail;”
  • Government regulation of injured worker benefits.

The main cost in WC is medical treatment for injured workers. Severe inflation in medical costs, which has gone on for decades, has a big effect.

When we say that WC has a long "tail" we mean that there is often a very long time between the accident and the final payment on the claim. Payments can stretch out over 40 years or more. This causes difficulties for all workers’ comp insurers, including self-insurers.

Every so often governments attempt to control workers’ compensation costs through reform legislation. Sometimes reform legislation is very successful, other times less so. It is difficult to evaluate how effective reform will be until it has been in effect for several years.

The actuary must consider these factors, plus many others, in providing a self-insurer with financial estimates and projections.

Bay Actuarial has many years of experience in WC. We prepare many actuarial WC reports every year and are constantly evaluating the latest trends in claim frequency, average claim amount, etc. We can produce a report very quickly if necessary.