2003 NCCI Holdings, Inc. Workers Compensation Loss Trends Karen Ayres, FCAS, MAAA National Council on Compensation Insurance [email protected] CAS

2003 NCCI Holdings, Inc.

Workers Compensation Loss Trends

Karen Ayres, FCAS, MAAANational Council on Compensation Insurance

[email protected]

CAS Seminar on Reinsurance

June 2-3, 2003Philadelphia, Pennsylvania

DoneDone

2 2003 NCCI Holdings, Inc.

• Workers Compensation Results

• Indemnity and Medical Trends

• Further Insights – Claim Frequency

• Further Insights - Medical Costs

DoneDone

Overview


Workers Compensation Results

DoneDone


Line of Business 2001 2002p ChangePersonal Auto 127.8 B$ 141.1 B$ 10.4%

Homeowners 35.1 B$ 40.0 B$ 13.9%

Other Liability (Incl Prod Liab) 21.9 B$ 31.2 B$ 42.4%

Workers Compensation 26.0 B$ 29.0 B$ 11.7%

Commercial Multiple Peril 22.2 B$ 25.4 B$ 14.3%

Commercial Auto 21.7 B$ 24.3 B$ 11.8%

Fire & Allied Lines (Incl EQ) 10.7 B$ 15.1 B$ 40.7%

All Other Lines 58.0 B$ 63.0 B$ 8.8%

Total All Lines 323.5 B$ 369.1 B$ 14.1%

2002 P&C Industry Premium Growth Highest in Sixteen Years

Net Written Premium by Line—Private Carriers

p PreliminarySources: 2001, Best’s Aggregates & Averages; 2002p WC, NCCI; Other lines, annual statement data; 2002p Total, ISO

14.1% = ISO

WC = NCCI

Other lines = TF

All Others = slack

14.1% = ISO

WC = NCCI

Other lines = TF

All Others = slack

DoneDone


Combined Ratios Improved Significantly in 2002

Net Combined Ratios—Private Carriers

Line of Business 2000 2001 2002pPersonal Auto 109% 108% 103%

Homeowners 111% 122% 113%

Other Liability (Incl Prod Liab) 112% 130% 119%

Workers Compensation 118% 122% 110%

Commercial Multiple Peril 115% 119% 112%

Commercial Auto 116% 116% 106%

Fire & Allied Lines (Incl EQ) 110% 126% 95%

All Other 102% 118% 98%

Total All Lines 110% 116% 107%

p PreliminarySources: 2001, Best’s Aggregates & Averages; 2002p WC, NCCI; Other lines, AM Best Review/Preview; 2002p Total, ISO

107.2% = ISO

WC = NCCI

Other lines = AM Best

All Others = AM Best

107.2% = ISO

WC = NCCI

Other lines = AM Best

All Others = AM Best

DoneDone


Workers Compensation PremiumThird Consecutive Year of Growth

Net Written Premium vs. Wages and Salaries—Private Carriers

31.0 31.328.9

26.2 25.1 24.1 23.2 22.224.8 26.0

29.030.329.7

0

10

20

30

40

50

60

19901991

19921993

19941995

19961997

19981999

20002001

2002p

Calendar Year

0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

4.0

4.5

WC Net Written Premium ($ B) Private Nonfarm Wages and Salaries ($ T)p PreliminarySources: 1990-2001, Best’s Aggregates & Averages; 2002p, NCCI; Private Non-Farm Wages & Salaries, Economy.com

$ Billions $ Trillions

QC’d to Best on 4/11 by Novia, 2002p = NCCI

QC’d to Best on 4/11 by Novia, 2002p = NCCI

DoneDone


Workers Compensation Calendar Year Combined Ratio Declined in

2002Private Carriers

117123 122

109101 97 100 101

108115 118 122

110

0

20

40

60

80

100

120

140

1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002pCalendar Year

Loss LAE Underwriting Expense Dividends

1.9% Due to September 11th

p PreliminarySources: 1985-2001, Best’s Aggregates & Averages; 2002p, NCCI

Percent

QC’d to Best on 4/14 by Ziv,

2002p is NCCI

QC’d to Best on 4/14 by Ziv,

2002p is NCCI

DoneDone


Calendar Year WC Loss Ratio Showing Signs of Improvement

Countrywide—Net—Private Carriers

8884

72

6055 56 56

6066

71 7076

78

40

50

60

70

80

90

100

Calendar Year

Per

cen

t

Source: Best’s Aggregates & Averages, Review/Preview; 9-11 est. from NCCI

1.9 % Due to September 11th.

DoneDone


WC LAE Ratios to Premium Appears to Have Leveled Off

WC Loss Adjustment Expense Ratio to Net Earned PremiumsExcluding State Funds

11.513.2

12.4 13.1 12.513.7 13.8

15.3 15.8 15.9

13.013.8

0

5

10

15

20

Calendar Year

Pe

rce

nt

Source: Best’s Aggregates & Averages, Review/Preview

Done!Done!


WC LAE To Loss Ratios In Recent Years Have Declined

WC Loss Adjustment Expense Ratio to LossesExcluding State Funds

13.115.7

17.3

21.7 22.624.6 24.8 25.4

24.022.3

18.617.7

0

5

10

15

20

25

30

Calendar Year

Pe

rce

nt

Source: Best’s Aggregates & Averages, Review/Preview

Done!Done!


AY 2002 Combined Ratio Improved Relative To Record Highs In Recent Years

Workers Compensation Calendar Year vs. Ultimate Accident YearCountrywide—Private Carriers

109

101

97100 101

108

115118

122119

129

137133

125

110107

9795

101

106

80

90

100

110

120

130

140

1993 1994 1995 1996 1997 1998 1999 2000 2001 2002p

Calendar Year Accident Year

Percent

p PreliminarySource: CY 1992-2002p: Best’s Aggregates & Averages; AY 1992-2002p, NCCIIncludes dividends to policyholdersAccident Year data is evaluated as of 12/31/2002 and developed to ultimate

DoneDone


Workers Compensation

Indemnity and Medical Trends

DoneDone


The Rate of Change in Workers Compensation Indemnity Claim Costs

Has Accelerated Since 1995 Lost Time Claims

Indemnity Claim Cost (000s)

+1.0% +4.9% +1.7%+5.8%

+5.7%+6.4%

+7.3%+7.8%

+7.7%+7.0%

-2.8% -3.1%

5

10

15

20

1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002p

Accident Year

Annual Change 1991–1995: +0.3%

Annual Change 1996–2002p: +6.8%

p PreliminaryBased on the states where NCCI provides ratemaking servicesAnalysis on 12/02/2002 using data through 12/31/2001, developed to ultimate; 2002 based on preliminary analysisExcludes the effects of deductible policies

DoneDone

Percent Changes


2.8 2.84.1

4.7 4.24.9

4.2

2.21.7

5.8 5.76.4

7.37.8 7.7

7.0

0

2

4

6

8

10

12

14

1995 1996 1997 1998 1999 2000 2001 2002p

Year

Change in CPS wage Change in Indemnity Cost Per Lost Time Claim

Workers Compensation Indemnity Severity Is Outpacing Wage Inflation

Lost Time Claims

p PreliminaryBased on the states where NCCI provides ratemaking services, excludes the effects of deductible policiesSource for Indemnity Severity: NCCI, based on data through 12/31/2001, developed to ultimate; analysis as of 12/02/2002Source for CPS (Consumer Population Survey): Economy.com as of 03/06/2003

DoneDone

Percent Change


Workers Compensation Medical Claim Cost Trends Continue to Accelerate

Lost Time Claims

+6.8% +1.3%+9.0% +5.1%

+6.4%+7.3%

+5.7%+7.4%

+7.6%

+10.7%

+12.0%

-2.1%

5

10

15

20

1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002p

Accident Year

Annual Change 1991–1995: +4.0%

Annual Change 1996–2002p: +8.1%


DoneDone

Percent Changes

Medical Claim Cost (000s)


4.53.6

2.8 3.2 3.54.1

4.6 4.75.1

6.47.3

5.7

7.4 7.6

10.7

12.0

0

2

4

6

8

10

12

14

1995 1996 1997 1998 1999 2000 2001 2002p

YearChange in Medical CPI Change in Medical Cost Per Lost Time Claim

WC Medical Severity Has Also Been Growing Faster than the Medical CPI

Lost Time Claims

DoneDone

p PreliminaryBased on the states where NCCI provides ratemaking services, excludes the effects of deductible policiesSource for Medical Severity: NCCI, based on data through 12/31/2001, developed to ultimate; analysis as of 12/02/2002Source for CPI: Economy.com as of 03/06/2003

Percent Change


The Frequency of Lost-Time Claims Has Continued to Fall Through 2002


-4.2 -4.4

-9.2

0.3

-6.5

-4.5

0.5

-3.9

-2.9 -2.9

-4.5

-5.5

-10

-8

-6

-4

-2

0

2

1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002p

Accident Year

Cumulative Change of –38.8%(1990-2002p)


DoneDone

Percent Change


To Date, Falling Frequency Has LargelyOffset Rising Claim Costs

Accident Year Lost-Time Claim Costs

0.75

1.00

1.25

1.50

1.75

1994 1995 1996 1997 1998 1999 2000 2001 2002p

Accident Year

Impact of Claim Frequency Average Total Claim Cost per Worker

Index 1994 = 1.00

DoneDone




Further Insights - Claim Frequency


Frequency Trends and Patterns

• Previously Reported Findings on Frequency

• Changes By State

• Changes By Size of Loss and Injury Type



Previously Reported Findings on Frequency


The Data

• Using Data from the Bureau of Labor Statistics• Linked to OSHA Reporting• Incidence Rates for Workplace Injuries Resulting in

Lost Time on the Job• This Underlies but Is More Comprehensive than WC

Frequency


Rate of Work-Related Injuries Decreases Over Time Due to Improved

Working ConditionsRate of Injury per 100 FTE Workers

0

5

10

15

20

25

19261929

19321935

19381941

19441947

19501953

19561959

19621965

19681971

19741977

19801983

19861989

19921995

19982001

Sources: U.S. Department of Labor, Bureau of Labor Statistics

DoneDone

Injuries and Illness per 100 Full-Time Equivalent Workers - All Industries

Injuries and Illness per 100 Full-Time Equivalent Workers - Manufacturing


Workplace Injury Incidence Rate— Decreases During Recessions and

Increases in Recovery

Incidence Rates Per 100 FTE Workers–Countrywide

0

5

10

15

20

25

1960

1961

1962

1963

1964

1965

1966

1967

1968

1969

1970

1971

1972

1973

1974

1975

1976

1977

1978

1979

1980

1981

1982

1983

1984

1985

1986

1987

1988

1989

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

Sources: U.S. Department of Labor and National Bureau of Economic Research

DoneDone

RecessionsInjuries and illnesses per 100 Full-Time Equivalent workers in manufacturing

Injuries and illnesses per 100 Full-Time Equivalent workers in private industry


Recent Decline in Frequency

This is a long-term trend driven by technology and economic incentives

• Continued Emphasis on Workplace Safety• Robotics• Modular Design and Construction• Power-Assisted Processes• Ergonomic Design• Cordless Tools• Stronger, Lighter-Weight Materials (e.g., fiberglass rather

than wooden ladders)• More and Better Training• Clerical Support Aids• Fraud Initiatives

DoneDone


What Is the Source of this Downtrend?

• Strong Growth Typically Is Accompanied by Investment in New Processes and Equipment

• Improvements Are Less Likely In Slow Growth Situations • Things that Enhance Productivity also Improve

Workplace Safety



Examples offered by Wal-Mart include:

• Inventory management - Analyzed peak sales days for tins of popcorn in the Christmas season. Then spoke with supplier to increase the number of deliveries from 2 to 4. They then didn't need to store and move tins of popcorn to make room for other merchandise. This saved over $1 million in labor costs, but also reduced their risk exposure.

• Inventory handling - Redesigned the back room and purchased new equipment called a walker stacker. This is a walk behind machine with a mast that allows employees to put merchandise up high out of the way without climbing a ladder. The redesign and new equipment also has allowed them to start unloading trucks at 4pm instead of 10pm, which reduces the rush. This was rolled out to 2600 stores over 18 months.

• Stocking shelves - Pulled out normal shelving for dog food and instead just drop in the pallet.

• Check out - Developed a new carousel/lazy Susan for bagging that reduces reaching and lifting. The bag to be loaded is on the carousel right next to the scanner. Once it is loaded, the cashier turns the lazy Susan toward the customer and starts filling a new bag that is then right next to the scanner. This reduces reaching since the bags are located next to the scanner, and it reduces lifting because 80% of the customers will pick up their own bags when they are turned toward them. It also improves cashier efficiency.



Similar Examples of Process Redesigns in Other Industries

• Ligon Brothers • Aventis • Honda • Toyota• Honeywell• Textron• TRW• DENSO

(source: www.humantech.com)


Workers Compensation Frequency for Selected Classes

DoneDone

Countrywide Policies Expiring in 2001 * Policies Expiring in 1997 **

Class Payroll ($M)Lost-Time

Only Claims FreqLost-Time

Only Claims FreqFreq

Change

Clerical 472,967$ 33,120 0.07 31,276 0.08 -12%Salesperson - Outside 112,211$ 11,350 0.10 11,511 0.12 -16%College Professional 67,398$ 8,433 0.13 7,633 0.14 -10%Retail Store 30,846$ 17,449 0.57 18,043 0.68 -16%Auditors/Accountants 26,203$ 595 0.02 342 0.02 -3%Hospital Professional 23,739$ 8,160 0.34 7,995 0.42 -18%Caterer 20,364$ 18,215 0.89 4,020 1.02 -13%Auto Service/Repair 14,468$ 11,938 0.83 12,904 0.96 -14%Architect/Engineer 12,629$ 1,885 0.15 1,829 0.18 -16%Electrical Wiring 11,404$ 9,527 0.84 8,848 1.00 -16%Drivers/Chauffers 10,540$ 13,818 1.31 14,672 1.45 -10%Convalescent/Nursing Home 9,397$ 12,956 1.38 14,604 1.68 -18%Plumbing, NOC & Drivers 9,242$ 8,905 0.96 9,286 1.13 -15%Store - Wholesale 8,855$ 10,469 1.18 12,028 1.55 -24%Hotel: All Other & Sales 8,076$ 8,042 1.00 9,342 1.33 -25%Total 830,263$ 166,820 0.20 154,991 0.23 -12%All Class Total 1,462,895$ 679,215 0.46 720,468 0.57 -19%

* Actual policy expiration between 09/30/2000 and 08/31/2001** Actual policy expiration between 09/30/1996 and 08/31/1997

Frequency = Lost-Time Claims/Payroll; payroll adjusted for inflation



Changes by State


Change in Cases/Employment Controlling for Change in Occupational Mix Using US Mix

1992-2000

-34

.9%

-34

.3%

-33

.9%

-32

.4%

-30

.8%

-29

.9%

-29

.1%

-28

.1%

-26

.3%

-25

.7%

-22

.5%

-22

.1% -1

6.3

%-8

.3%

-8.3

%-1

.4%

-50

.5%

-50

.1%

-46

.0%

-46

.9%

-43

.1%

-43

.4%

-42

.2%

-41

.5%

-42

.4%

-41

.4%

-41

.1%

-41

.1%

-39

.7%

-38

.8%

-37

.3%

-42

.5% -3

4.9

%

-60%

-50%

-40%

-30%

-20%

-10%

0%

GA

UT

IN AZ

NC

IA HI

CA

MO

OK

TN

AL

AR

KS

MI

OR

FL

KY

LA

TX

MD

SC

VT

CT

MT

NY

VA

NE

ME

MN

MA

DE

RI


Top 3rd Mid 3rd

Bot 3rd

Declines In Frequency 1992-2000Adjusted for Change in Occupation Mix

AK

OR

UT

WY

MT

SD

ND

KS

NE

OKNM

MO

AR

LA

MS

KY

TN

AL

FL

WI

INOH

PA

NY

ME

WV

NC

SC

GA

VAIL

MIIA

MN

TX

CO

AZ

ID

NV

CA

WA

MA

RICT

VT

HI

DE

DCMD


Looking at States

• There Appears to Be a Clear but Modest Regional Pattern

• Change in Occupation Mix from Higher to Lower Risk “Explains” about 10% to 15% of the Frequency Improvement Countrywide

• Frequently Economic Growth Appears to Play a Role• Several States that Experienced Strong Economic Growth

Had Some of the Greatest Improvements in Workplace Injury Rates

• No High Growth States Had Markedly Low Declines in Injury Rates



Changes by Size of Loss and Injury Type


Claim Frequency byClaim Size and Injury Type

• Lost time claim frequency declined by nearly 20% for policies expiring in 2001 compared to policies expiring in 1997

• Smaller lost time claims experienced greater claim frequency decline than larger lost time claims

• Even the large claims experienced some frequency decline (after adjusting for inflation)


Claim Frequency by Claim Size and Injury Type

(continued)

• Claim frequencies declined for all injury types • This shift in the claim frequency distribution

accounts for some of the recent severity increases • The shift impacts severity trends but doesn’t

impact loss ratio trends


Average Claim Size Why Does it Change Over Time?

• InflationWage Inflation

Medical Price Inflation

• UtilizationIncreases in duration

Changes in thresholds for permanent disability

More Medical Treatments per claim

New medical procedure


Average Claim Size Why Does it Change Over Time?

(Continued)

• Changes in injury rates that differ between small and large injuries

If small claims and large claims experience different frequency changes over time, the mix will change

Relatively fewer small claims translates into in an increase in average claim size


0.00

0.02

0.04

0.06

0.08

0.10

0.12

0.14

0.16

0.18

0.20

$0 - $2,000 $2,001 - $10,000 $10,001 - $50,000 $50,001 +

Cla

im F

req

ue

nc

y P

er

$1

M

of

Wa

ge

Ad

jus

ted

Pa

yro

ll

Policies expiring in 1997 * Policies expiring in 2001 **

-40% +15%-3%-19%

Frequency by Loss RangeWithout Inflation Adjustment

(Lost Time Claims)

Source: NCCI* Actual policy expiration between 9/30/1996 and 8/31/1997** Actual policy expiration between 9/30/2000 and 8/31/2001

Percent Change for Policies Expiring in 1997 versus 2001


0.00

0.02

0.04

0.06

0.08

0.10

0.12

0.14

0.16

0.18

0.20

$0 - $2,000 $2,001 - $10,000 $10,001 - $50,000 $50,001 +

Cla

im F

req

ue

nc

y P

er

$1

M

of

Wa

ge

Ad

jus

ted

Pa

yro

ll


-35% -8%-8%-18%

Frequency by Loss RangeWith Inflation Adjustment

(Lost Time Claims)

Source: NCCI* Actual policy expiration between 9/30/1996 and 8/31/1997** Actual policy expiration between 9/30/2000 and 8/31/2001Loss ranges have been adjusted for indemnity (4%) and medical (3%) inflation.



0.0000

0.0005

0.0010

0.0015

0.0020

0.0025

0.0030

Fatal PermanentTotal

PermanentPartial

TemporaryTotal

Medical Only

Cla

im F

req

ue

nc

y P

er

$1

M o

f W

ag

e A

dju

ste

d P

ay

roll

0.0

0.5

1.0

1.5

2.0

2.5

Cla

im F

req

ue

nc

y P

er

$1

Mo

f W

ag

e A

dju

ste

d P

ay

roll


-12% -18%-11%-16% -24%

Claim Frequencies by Injury Type

Source: NCCI* Actual policy expiration between 9/30/1996 and 8/31/1997** Actual policy expiration between 9/30/2000 and 8/31/2001



Claim Frequency & Severity Open Issues

• How much of the increase in average severity is due to a greater decline in injury rates for less severe injuries

• How much of the increase in average severity is due to indemnity and medical utilization effects



Further Insights – Medical Costs


Tracking Utilization Trends in

Consumers’ Medical Spending

The Central Observation:

Spending = Price times UtilizationUtilization = Quantity adjusted for Quality/Mix

therefore

If You Have Price and Spending Data

You Can Estimate Quantity/Utilization Changes


Estimating Changes in UtilizationUsing Data on Consumer Medical Expenditures

The Contribution of Utilization is Reflected in the Spread Between the Changes in Expenditures and Prices

0%

4%

8%

12%

16%

1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002

Percent Change From Prior Period

PCE - Medical Expenditures

"Utilization"

Medical Care CPI

Source: Bureau of Economic Analysis, Bureau of Labor Statistics

Calendar Year


The Conclusion:Medical Care “Utilization” Has Increased

Significantly Since the Early 1990s

Percent Change From Prior Period in Consumer Medical Care Utilization

0.0%

0.5%

1.0%

1.5%

2.0%

2.5%

3.0%

3.5%

4.0%

4.5%

1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002


Calendar Year


Impact of Prices & Utilization on Ann. Growth in Consumer Spending (%)

"Utilization"

"Price"

0%

20%

40%

60%

80%

100%

1994 1995 1996 1997 1998 1999 2000 2001 2002

The Role of "Utilization" Has Doubled Since the Early 1990’s

Bureau of Labor Statistics, Bureau of Economic Analysis, and NCCI


Using Inflation of the MedCPI as a Proxy for WC Medical Price Changes

Suggests That Changes in “Utilization” Have Contributed an Even Larger Share of the Increases in WC Medical Costs


Impact of Prices & Utilization on Annual Growth in Medical Cost Per Lost Time Claim (%)

"Utilization"

"Price"

0%

20%

40%

60%

80%

100%

1995 1996 1997 1998 1999 2000 2001 2002

Bureau of Labor Statistics, Bureau of Economic Analysis, and NCCI

"Utilization" Accounts for Nearly 60% of the Recent Growth in Medical Severity


The“Expenditure – Price = Utilization”

ApproachAppears to Work

Analyzing Components of Consumer Medical Expenditures:

• Hospital Services – Major Surge in Utilization as Managed Care Eased Constraints

• Physician Services – Unintended Consequences of Restrained Fee Schedules – Utilization Up

• Prescription Drugs – “Utilization” Has Exploded

• Other Professional Services – Both Inflation and Utilization Remain Modest After a Decade of Easing


Hospital Services: Price Changes Remain Moderate

Utilization Is on the Rise

0%

3%

6%

9%

12%

15%

1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002

PPI - Med/Surg Hosp

PCE - Hospital Services

Percent Change from Prior Year

"Utilization"

PPI Data for 1993 and prior is not available


Calendar Year


Physician Services:Low Growth in Fees May Have Prompted

Physicians to Provide More Services

0%

4%

8%

12%

16%

1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002

Percent Change From Prior Year

PCE - Physician Svcs.

PPI -Phys. Svcs.

"Utilization"


Calendar Year


A Lesson From Medicare

Doctors Are Able to Partly Offset the Impact

of Medicare Price Decreases By Increasing Volumes Elsewhere in Their Practice


The Unintended Consequence of Tightened Fee Schedules:

An Increase in the Utilization of Physician Services

Changes Between 1994 and 1996 in an Orthopedic Surgery Practice

-50%

0%

50%

100%

150%

200%

250%

Pct. Chng. In MedicarePrice Schedule

Pct. Change InNumber of Allowed

Services

Pct. Change in TotalCharges

Surgery-Related

Office Visits

All Services Combined

Source: “Physician Volume and Intensity Response”, a Memorandum from the Office of the Actuary, HCFA


Consumers’ Expenditures on Prescription Drugs:Increased Utilization Has Surged in Recent Years

0.0%

4.0%

8.0%

12.0%

16.0%

20.0%

1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002

Percent Change from Prior Year

PCE Rx Drugs

CPI - RX Drugs

"Utilization"


Calendar Year


Consumer Spending on Prescription Drugs:The Growth Far Exceeds Its Share of

Total Medical Expenditures

0%

5%

10%

15%

20%

25%

30%

Pct. Of Total Exp. In 2001 Contrib. To Growth '96 to '01

Eyecare Svcs

Medical Supplies (Excl Gyn)

NonRX Drugs

Dental Svcs

Health Insurance

Rx Drugs

Other Prof Services

All Other Not Specified

Phys Svcs

Hospital Svcs (Non Gov't)

Source: Bureau of Economic Analysis


Workers Comp Expenditures on Prescription Drugs

Also Have Surged in Recent Years

Percentage Distribution of Workers-CompensationRelated Medical Expenditures

0%

10%

20%

30%

40%

50%

Rx Drugs &Other Med

Commodities

PhysicianServices

DentalServices

Eye CareServices

OtherProfessional

Services

Hospital andRelatedServices

1989-91

1998-2000

Source: NCCI Detailed Claims Information


Current Research

Developing Cost Indexes for Workers Compensation Medical Costs

- Prices

- Quantity

- Change in Mix


Thank You for Your Attention

Questions and Comments

Documents

2003 NCCI Holdings, Inc. Workers Compensation Loss Trends Karen Ayres, FCAS, MAAA National Council on Compensation Insurance [email protected] CAS