Gulfshore Insurance > Frequently Ask Question > Workers Compensation Claims > 2022 Midyear Market Outlook – Workers’ Compensation Insurance

Commercial Lines Workers Compensation Insurance 1Unlike other forms of coverage, the workers’ compensation insurance market has stayed resilient in recent years. Accord­ing to the National Council on Compensation Insurance (NCCI), the segment’s private carrier combined ratio in 2021 was 87, matching 2020’s results and marking the eighth con­secutive year of underwriting profit.

Additionally, industry data confirmed workers’ compensation coverage was the only major commercial line of business to generate a negative average rate change in the first quarter of 2022 at -1.23%. Although the COVID-19 pandemic contrib­uted to some fluctuations in the number of workers’ compen­sation claims and associated costs, insurance experts predict claim frequency will continually decline while claim severity will see moderate changes—thus maintaining the market’s robust reserves. Looking ahead, the segment should remain stable, with most policyholders experiencing rate decreases and others seeing minimal rate increases.

Developments and Trends to Watch

  • Labor shifts—Over the past year, many employees have begun leaving their jobs in search of positions that offer greater work-life balance, flexibility and benefits, coining a new employment trend known as the “Great Reshuffle.” This trend has led to a rise in short-tenured employees and increased labor shifts between industries. Such changes present several workers’ compensation implications. Accord­ing to the NCCI, short-tenured employees have significantly higher injury frequency rates than their long-tenured coun­terparts, potentially contributing to additional workers’ compensation claims—especially in the construction, manu­facturing and wholesale trade sectors.
  • Wage inflation issues—In efforts to attract and retain employ­ees amid the Great Reshuffle, many businesses have increased their workers’ pay. Although this trend is happen­ing across industry lines, it has been most prevalent in sec­tors with a large proportion of lower-wage positions (e.g., leisure and hospitality), according to the NCCI. Because pay­roll is leveraged as an exposure base to calculate workers’ compensation premiums, wage inflation could prompt increased rates. After all, higher wages are tied to greater benefits, and it’s important for benefits and premiums to remain in balance. The NCCI also reported that the surge in employees receiving raises and moving from lower-wage positions to higher-paying roles could create short-term dis­connects between wages, benefits and workers’ compensa­tion premiums.
  • Gig economy challenges—Gig workers are individuals who work on demand and at will by performing short-term jobs or tasks for multiple clients. As the gig economy expands, busi­nesses that utilize such workers have encountered various challenges. In particular, some states have developed legisla­tion regarding whether gig workers should be classified as employees or independent contractors. Making this distinc­tion is critical, as it determines the workers’ compensation benefits each type of worker is entitled to. Generally, an employee would be protected by a business’s workers’ com­pensation program and receive certain benefits following a job-related illness or injury (e.g., covered treatment costs, reimbursement for lost wages and return-to-work resources), whereas an independent contractor would not.

Tips for Insurance Buyers

  • Implement occupational safety and health programs to address common risks in the workplace. Ensure all employees receive proper safety training.
  • Develop an effective return-to-work program that adequately supports employees in the processes of healing from work-related illnesses or injuries and resuming job duties.
  • Establish workplace wellness initiatives aimed at prevent­ing or treating chronic health conditions and improving the overall well-being of staff.


Gulfshore Insurance is a Naples, Florida based insurance agency specializing in business insurance including liability insurance, property insurance, workers compensation insurance, vehicle insurance, business income interruption insurance, cyber insurance, commercial umbrella insurance, and more. Our insurance and risk management advisors are industry specialists for condominium associations, golf and country clubs, oil and petroleum marketers, construction, landscaping, churches and non-profits, and work comp. Navigating insurance requires an experienced and trusted insurance agent who understands your business risks and exposures. Gulfshore Insurance services Naples, North Naples, Marco Island, Bonita Springs, Fort Myers, Sarasota, Lido Beach, Longboat Key, Bradenton Beach, and Southwest Florida. We have office locations in Naples, Fort Myers, Fort Lauderdale, and Sarasota.