The National Council on Compensation Insurance's 2025 "State of the Line" report says:

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  Joe Paduda

  Workers' compensation premium dropped 3.2% while all property and casualty insurance lines saw an increase of almost 9%.
• WC bureau-approved rates are projected to drop another 6.1% this year.
• WC remains hugely profitable, with a combined ratio of 86%.
• Lower frequency — using premium dollars as the benchmark — dropped again, down 7.6% in 2023 and another 5% in 2024.
• But claim costs — i.e., “severity” — increased significantly, up 6% for indemnity claims.
• That 6% jump was driven primarily by higher wage replacement/indemnity spend, not medical inflation.
• WC remains the darling of the industry. With investment income averaging 10% on top of an underwriting margin of 14%, WC’s pretax operating gain is 24%.
• Reserves are still way too high. The industry is sitting on $16 billion in excess reserves.

There’s a lot more to unpack, but the key takeaways are:

• WC is still way too expensive; declining frequency, flat medical inflation and gigantic excess reserves clearly indicate insurers are making bank on WC.
• Medical inflation remains quite low; at least projections indicate inflation was almost flat in 2024.

What does this mean for you?

All joyrides eventually end.

Joseph Paduda is the principal of Health Strategy Associates, a consulting firm focused on improving medical management programs in workers’ compensation. This column is republished with his permission from his Managed Care Matters blog.