Can Workman's Compensation Programs Remain Profitable in 2017? Written by Mark Kraemer on 2/1/2017 3:40 AM in Work Comp Insurance, Workers Comp Insurance. It has 1 Comments. The largest product segment in the US commercial insurance sector, workman's compensation insurance programs, realized significant underwriting profits in 2015. Vastly improving over the past 5 years, this change in fortune is attributable to a variety of factors. Whether it holds in the coming years, however, remains to be seen. Outlook is hazy Net written premium growth expanded at an average annual rate of 7% from 2011-2015, tapering off to a 3.5% increase in 2015. Better pricing strategies have resulted from several economic factors, such as an improvement in insured exposures from employment and payroll growth, favorable loss-cost trends and reserve experiences, thanks in part to underwriting improvements and stability in frequency and claims. Business appears on the up-and-up for the industry, however long-term profitability remains uncertain. What holds the key to the future? The historically cyclical nature of workers’ compensation underwriting and the rarity of profits naturally leads to the question of sustainability. Numerous obstacles lie ahead. Market competition is pushing a trend toward declining premium rates, and the sun may be setting on favorable trends in claims cost factors and loss reserve experience. Positive influences on long term claims frequency patterns include underwriter technology used for claims analysis, predictive modeling, as well as the evolution of risk management and employee safety practices. However, the precariousness of the Affordable Care Act, rising prescription drug costs, external forces (economic, regulatory, legal), and the natural volatility in workman’s comp insurance market are leading experts to point to probable underwriting losses in 2017. Workman's compensation insurance losses keeping you up at night? Minnesota Comp Advisor can help. Contact us today.