There are 2 main reasons that workers compensation rates will continue to head north in 2013. First is the tightening of underwriting standards for most labor intensive industries– especially staffing and construction. From 2001-2009 workers compensation rates were kept low because of loose underwriting standards by many carriers. After 2009 the insurance industry realized that their underwriting requirements were far too lax, and their insured risk portfolio generated inferior rates of return on their investment in workers compensation programs.
Second, the insurance industry is not able to make the kind of returns in the stock and other investment markets as they had in the years leading up to the Recession. Now they must be able to make money on each account rather than use the premium as investment monies for the investment markets. This is forcing up premiums as well as making the process of securing work compensation for higher risk industries (staffing and construction) more difficult. The net result is that more high risk companies in staffing and construction are being forced to the State Pools (and payng much higher rates) for their insurance.
An effective alternative can be utilizing a Professional Employers Organization (PEO’s) as your payroll and workers compensation provider. A PEO will spread your risk over their diverse portfolio of clients, which often results in lower rates for you.
Call us at 202-302-1212 to discuss this option and receive a quote.
All the best
David Schek
President
StaffingCompSolutions.com
American Staffing Association Member
California Staffing Association Member
Exclusive PEO Broker for the United States Staffing Association