WHY WORK COMP INSURANCE IS NOT SUSTAINABLE
There are several factors at work against the current workers' compensation insurance business model.

The first, and foremost, as pointed out by Rousmaniere's analysis (and corroborated by Berkeley research Frank Neuhauser), is that the work place is safer and safer and safer.

Which means, of course, there are fewer - indeed FAR fewer - injuries or deaths to insure against than when The Grand Bargain was first negotiated.

And the declining frequency trend means that at some point work injuries/deaths will be, essentially, negligible, which will drive employers to question why workers' compensation, at least in its current mandatory format; i.e. why can't employers formulate some other work injury protection scheme without the overhead, bureaucracy, intrusion and imposition of current state workers' compensation plans since the need isn't so great.

In other words, regardless of the current foment against the nascent "opt-out" movement, eventually the industry is going to have to come to real terms with the reality that it, as in workers' compensation insurance, will become displaced.

The industry is disrupting itself.

The only defense workers' compensation insurance has against this ultimate threat is to make it cheaper, but that won't happen in today's environment, against the long term sustainability of the line, because there is no panic yet.

Indeed, a couple of years ago, at the start of the current "hard" market, then NCCI president Stephen Klingel in his State of the Line address essentially said that there was no good reason that carriers are able to sustain rates and premiums at current levels other than the fact that they could - i.e. employers haven't yet awoken to market realities.

But they will...

What demands does an employer have the right to ask from a vendor (in this case, a workers' compensation insurer) who sells a product that the vendor knows can be a lot cheaper - but the vendor doesn't make a full effort to make it cheaper?  These are generally relationships that go on for years.

Are insurers really competing on keeping prices low but reducing their "cost of business", which is injuries times the cost of the injuries?