Increasing uncertainty about interest rates, employment, construction and the impact of tariffs are why we won’t see much in the way of acquisitions for the foreseeable future.

Joe Paduda

That said, things are changing so fast, “foreseeable” is less than six months.

Companies that were up for sale did not sell, mostly because sellers weren’t going to get the price they wanted. Buyers, who just last year were willing to pay healthy multiples (earnings multiplied by 13-15), are now reluctant to go anywhere near that number.

Expect one or two businesses in workers’ comp services will change owners in the next few months; not much else will happen till things settle down.

Meanwhile:

• Direct written premium hasn’t changed at all over the last five years despite notably higher wages since COVID.
• Losses for the top 25 insurers trended a bit higher late last year.
• Excess reserves remain quite high.
• Frequency continues its decades-long decline.

And here are two fun facts:

• The two states with the lowest combined ratios are Washington and Ohio, both monopolistic states (you have to buy your work comp insurance from the state government).
• California remains the largest WC state with more than a fifth of written premium.

What does this mean for you?

Uncertainty breeds stasis.

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.