By William Nibbelin, Head of Industry Data and Actuarial Science, Triple-I 

While the workers’ compensation line continues to demonstrate remarkable resilience, underlying metrics indicate carriers must move beyond national averages to maintain long-term underwriting stability, according to the NCCI Annual Insights Symposium (AIS) 2026 – a key event for the workers’ comp industry.

“There’s not a single number that defines the workers’ compensation system,” said Donna Glenn, NCCI chief actuary, in her remarks on the NCCI State of the Line report. “Behind this year’s 91 combined ratio, factors such as industry mix, state differences, and carrier variation are all shaping results.”

Glenn added that insurers must interrogate the data and question these outcomes “to deliver deeper, actionable insights.”

State Differences

The workers’ comp system operates as a collection of unique jurisdictions with independent statutory frameworks and distinct economic exposures, creating variations in performance across states. NCCI acts as the licensed rating, advisory, and statistical organization for workers’ comp in most states, with California and New York being notable exceptions. Together, NCCI-rated states, alongside California and New York, make up 80 percent of the workers’ comp marketplace.

California results heavily skewed national reporting, with the state’s private-carrier accident-year combined ratio totaling 129 in 2025. Claims in the state can remain open after five years, at three times the national average, which has fueled a sharp escalation in cumulative trauma (CT) claims. Such claims now represent over 25 percent of all indemnity claims in the state, compared to a stable average of less than 5 percent across NCCI jurisdictions.

Litigation is another key driver, as more than 90 percent of CT claims in California become litigated. The transition to virtual case hearings has also allowed specialized legal firms to expand their reach statewide. Consequently, the California bureau filed a substantial 10.4 percent rate increase for late 2026.

In contrast, New York approved a loss cost decrease of 21.9 percent, effective late 2026, marking 10 consecutive years of downward rate adjustments. Workers’ comp writers in New York file for rate changes differently than those in California. In New York, they are required to use the New York Compensation Insurance Rating Board loss costs and, therefore, are only able to file loss-cost multipliers when filing for a rate change. In California, they can file loss costs in addition to their loss-cost multipliers.

New York also enforces strict medical treatment guidelines, generic drug formularies, and capped medical fee schedules that require extensive regulatory processes to alter.

On the exposure side, New York has experienced a noticeable post-pandemic structural shift in its economy. While overall total private sector jobs rose to 8.5 million, higher-risk sectors like construction and retail shrank by 7 percent and 9 percent, respectively, since 2019.

Regulatory Impacts

Looking at other states,Nevada was used as an example of how standalone statutory mechanisms impact actuarial trends. The state filed a standalone 21.6 percent loss cost increase for early 2026, an extreme outlier within NCCI states, driven by new state regulations. Senate Bill 317 effective October 1, 2026, will raise Nevada’s long-standing statutory cap limit on exposure reporting of $36,000 of an employee’s payroll to approximately $100,000.

Local medical and administrative delivery systems also impact state performances. NCCI actuaries evaluated temporary disability duration across claims closed within two years and observed substantial state-by-state disparities:

• Low Duration States (e.g., Oregon, Vermont): 6–7 weeks on average.
• High Duration States (e.g., the Carolinas, Georgia): 15 weeks on average.

Local care protocols, administrative efficiency, and attorney involvement amplify these disparities, with durations of litigated claims averaging six months longer than non-litigated counterparts.

“The time to close a workers’ compensation claim shows wide variation across jurisdictions: an additional 9 to 25 weeks after all medical services have been delivered”, said Raji Chadarevian, NCCI executive director for actuarial research. “That can have a meaningful impact on the cost of the claim.”

Industry-Specific Trends

At an industry level, claim trends diverge significantly from national averages:

• Construction remains the largest industry sector by premium volume at 27 percent and achieved the largest drop in claim frequency at approximately 7 points between 2023 and 2024. Frequency decreased across each of its 10 largest job classifications, though medical severity remained the highest of any industry sector, driven by severe fall-from-height hazards. Notably, medical claim severity rose by a substantial 13 points between 2023 and 2024, with over half of the top ten construction classes reporting double-digit severity increases.

• Health Care is, on average, a higher-frequency industry. Breaking from historical declines, claim frequency increased slightly in 2024, driven by significant multi-year employment growth that introduced a high volume of inexperienced, short-tenured workers. This was the sole sector that meaningfully contributed to job growth in 2025.

• Office & Clerical roles are a historically low-frequency, low-exposure sector. Following a significant drop in frequency in 2020 due to widespread pandemic-related remote work, and a subsequent rebound in 2021, frequency decline has continued to outpace most other sectors. However, the sector recorded a slight increase in frequency in late 2024, primarily from a spike in motor vehicle accident claims for clerical workers whose professions involve driving.

Learn More:

Core Drivers and Emerging Risks for Workers’ Comp

Triple-I State of the Line Issues Brief: Workers’ Comp (members only)

Facts + Statistics: Workplace Safety/Workers’ Comp

Spotlight On: Workers’ Compensation

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By William Nibbelin, Head of Industry Data and Actuarial Science, Triple-I 

Factors driving stability in the workers’ compensation line were a central focus at the NCCI Annual Insights Symposium (AIS) 2026 – a key event for the workers’ comp industry. In aggregate, workers’ comp welcomed its 11^th consecutive year of net underwriting profitability in 2025, continuing to outpace the broader property/casualty industry.

Alongside this success, industry leaders and actuaries provided insights into the underlying trends and emerging risks to watch going forward for the line.

Key Findings

• Premium: Workers’ comp net written premium decreased by 1.5 points in 2025, to $45.6 billion. For private carriers, this decrease was 0.2 points, to $41.6 billion.

• Changes in premium include a 6-point decline in 2025 bureau loss costs and payroll growth of 4.8 points, comprising 0.5 points in employment and 4.3 points in wage rate.
  • Despite an overall decrease in premium, the residual market share declined to just 5 percent in 2025.

• Profitability: The 2025 calendar year net combined ratio of 92.8 was an increase of 4.0 points over 2024 at 88.8. For private carriers, the net combined ratio of 91 was an increase of nearly 5 points over 2024 at 86, marking 12 consecutive years of underwriting gains. The accident year combined ratio of 102 is projected to develop downward by 5 to 6 points based on historical reserve experience.

• Reserves: NCCI estimates a net redundant industry reserve position of $14 billion for private carriers.

• Severity Trends: Both medical and indemnity severity increased by 4 points in 2025.

• Frequency Trends: Lost-time claim frequency decreased by 2 points in 2025, compared to a decrease of 5.9 points in 2024. This represents a more moderate decrease in frequency compared to the long-term average annual decline of 3.8 points.

Economic Uncertainty

NCCI filed a 5 percent decrease in loss costs effective in 2026, marking the 13^th consecutive year of declines. These results are a product of rising payroll and long-term frequency improvements, coupled with favorable reserve development expectations, which together have outpaced severity increases.

However, underwriting margins face clear headwinds from economic uncertainty, including the significant rise in energy prices and the potential for stagflation. In a stagnant economy, businesses stop growing, unemployment rises, and prices increase.

Yet, as NCCI Practice Leader and Senior Economist Stephen Cooper noted, the economy has remained resilient in 2026, despite these risks.

“Employment growth on a month-to-month basis has been volatile over the past year, with most growth concentrated in one sector,” Cooper explained. “Overall, however, the labor market remains in balance, as both supply and demand have evened out and there have been early signs of the labor market potentially strengthening in 2026.”

Evolving Risks

The symposium highlighted several structural and technological changes altering the nature of workers’ comp risk:

Pain Management: Pain management protocols have increasingly shifted toward holistic treatment methods, including extended physical therapy and topical solutions. Major surgery utilization has dropped by 8 points since 2016, whereas physical therapy utilization has expanded considerably, driven by a greater intensity of procedures per session, rather than an increase in session frequency.

Delivery of Care: Medical benefits are heavily impacted by the broader U.S. healthcare delivery system. Over the past decade, private equity firms have invested more than $1 trillion into independent ambulatory surgery centers, specialty practices, and outpatient clinics. Simultaneously, massive hospital networks are consolidating or restricting health care access in rural communities. These changes contributed to a 5-point drop in the share of workers visiting emergency departments on the day of their injury.

Remote Work: Work-from-home options are increasingly used as “reasonable accommodations” for injured employees in some industry sectors. By eliminating commuting constraints, remote work structures allow injured employees to perform tasks virtually, mitigating lost-time indemnity claims.

AI: Beyond general system performance optimization, AI tools are being deployed for early-stage claim triage, automated medical bill auditing, and identification of potential litigation vulnerability. NCCI has also instituted formal governance structures for digital assets and initiated programs that leverage machine learning models to streamline the risk classification code assignment process.

Aging Workforce: Employees aged 55 and older now account for nearly one-quarter of the total labor force, a segment that will expand over the next decade. While the experience of older workers minimizes injury frequency, their physiological responses are more complex, yielding higher average medical costs and prolonged recovery periods.

“Demographic forces help to shape the workers’ compensation claim environment,” said Paul Hendrick, NCCI Practice Leader and Senior Actuary. “Factors such as employee tenure or the aging workforce are not abstract economic concepts; they have a real, tangible impact on the nature and frequency of claims that occur every day in the workers’ comp system.”

Learn More:

Steady Workers Comp Performance Masks Uneven Industry Realities

Triple-I State of the Line Issues Brief: Workers’ Comp (members only)

Facts + Statistics: Workplace Safety/Workers’ Comp

Spotlight On: Workers’ Compensation