Workers Comp Sees Eighth Year of Underwriting Gains Despite 2024 Premium Dip

NCCI’s Annual State of the Line Report, presented at AIS 2025, offers key insights into the performance of the workers compensation (WC) insurance sector. Despite a 3.2% decline in net written premium to $41.6 billion for calendar year 2024, the WC line posted a combined ratio of 86.1% and an operating gain of 23.7%. This marks the eighth consecutive year of underwriting profitability and reinforces a sustained soft market trend in WC underwriting. These numbers also significantly outperformed the broader P&C sector.

Claims adjusters should take note of updated frequency and severity trends: Accident Year 2024 claim frequency declined by 6%, while indemnity and medical lost-time severities increased by 5% and 6%, respectively. These shifts carry implications for adjusting strategies, particularly as wage inflation and medical costs continue to influence overall claim values.

Preliminary data for the first half of 2025 indicates a slight 1.9% decline in direct written premium and a modest uptick in the direct loss ratio to 50%. However, assuming historical trends hold, NCCI projects the 2025 combined ratio will remain favorable—likely between 85% and 93%. Adjusters should anticipate continued high claim volumes paired with stable severity trends, driven by wage and employment growth.

As regulatory and economic environments evolve, WC continues to deliver strong results, reinforcing its position as one of the most stable and profitable lines in the insurance industry. Claims professionals should remain vigilant in evaluating wage trends, adjusting medical costs, and monitoring policy mix changes that could impact exposure and claim complexity in 2025 and beyond.