Last week we debunked unwarranted fears that workers comp is in a profit-crushing “COVID crisis” — mostly because COVID-19 claim costs and claim counts are relatively low.Workers' Compensation
Reality is COVID-19 costs will be more than offset by the massive decrease in new claims seen so far, a decrease that may deepen as jobs continue to disappear.
The latest from WCIRB California supports that assessment, forecasting insurers COVID-19 costs will total $800 million in 2020. That may even be too high.
WCIRB estimates cost per claim will be almost $34,000, a figure that far exceeds anecdotal reports from my consulting clients.
Given Californias presumption laws are the broadest of all states (so far) and therefore costs are likely higher there than anywhere else, its unlikely COVID-19s impact will be to crush insurer profits. No, the real issue for insurers, TPAs, and service entities is the decline in revenue.