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Navigating Workers Compensation in Today’s Workplace

COVID-19 brings additional workplace safety concerns across all industries. Successful agents will partner with reputable carriers with strong underwriting, risk control and claims expertise to help businesses improve workplace safety.
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As every industry deals with the global pandemic, uncertainty is coming to the forefront surrounding remote work and, more recently, doubts about workplace safety as people return to work. Now, workers compensation insurers have no option but to step up to the plate and deal with the ever-changing workplace environment created by COVID-19.

At the beginning of 2020, workers comp was a profitable line of business, benefiting from high payroll, low claims frequency and a good economy. “We've had a soft market for workers comp for a long time, at least six or seven years, where rates have been declining," says Jim Mitchell, executive vice president, workers compensation and accident & health, RT Specialty. “But, talking with a number of our carrier partners recently, they've definitely seen an uptick in claims activity."

In the first couple of months of the pandemic, carriers were seeing few COVID-19-related claims, but “now it's becoming heavy in the health care space—it's become more of an avalanche of claims that are coming in," Mitchell says.

For essential worker classes, like health care, “underwriters are asking a lot more COVID-19-related questions," he continues. “They're underwriting COVID-19 a lot more closely and charging higher rates. The rest of the classes are still very soft."

For agents, carriers and wholesalers in the workers comp market, COVID-19 has created a new set of hazards that they need to be aware of.

“We are always analyzing the evolution of the workforce and exposure changes," says Mary Woods, senior vice president and chief underwriting officer, Travelers. For years, rates and claims were low as companies developed much safer workplace environments, but with many employees continuing to work remotely, some working from makeshift home offices, some workers returning from extended periods of time off and becoming sick or injured, the inherent nature of certain hazards has changed.

The pandemic brings additional workplace safety concerns across industries—whether work activities take place in a factory, retail store, office setting or elsewhere. But it's the transition to working from home that has the market concerned.

“The ability to create appropriate ergonomic workspaces for an employee working from home is very difficult," says Matthew Ford, vice president, field marketing & underwriting, Amerisure. “For those in office settings, meetings are now virtual, causing more employees to be sitting for most of the day, which puts a strain on employee wellness with limited physical movement and exercise." 

And even after companies open up again, they may be more inclined to continue to allow employees to work from home, “which will lead to different exposures from what we've seen in the past, which could affect loss costs," Woods says. 

On Oct. 1, Amazon, the world's largest online retailer, released data showing more than 19,000 of its U.S. front-line workers had contracted the coronavirus this year. And while insurers are seeing claims rise for front-line workers, claims for health care workers are seeing a larger increase.

“We continue to evaluate the effect of COVID-19 on various classes and industries," Woods says. “Obviously, COVID-19 will have a larger impact on health care workers, especially those treating patients who have contracted the virus."

Amazon was also in the news in late September when details of an investigative report revealed the rate of injuries to employees was 22 per 100 workers at a warehouse in DuPont, Washington, five times the industry average. A result of workers being forced to meet ever-increasing consumer demands during the pandemic? Such workplace injuries could impact the workers comp market, leading to potential increases in premiums over time.

Providing risk management and loss control services to clients can help alleviate some of these new hazards.

“The most successful agents will partner with reputable carriers with strong underwriting, risk control and claims expertise, including in-house nurses and medical professionals, to help businesses understand their exposures and improve workplace safety," Woods adds.

Carriers understand the changing workplace environment, and as the country reopens, independent agents will be critical in helping their clients navigate the ever-evolving COVID-19 situation to provide a safe workplace.

Olivia Overman is IA content editor.

This article was published in the December 2020 issue of Independent Agent magazine.

For more resources, join the Big “I" Virtual University (VU) live webinar, “Workers Compensation: 5 Mistakes Every Agent Makes," available through 2021. 

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Monday, December 7, 2020
Workers Comp