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Claims Trends
WC Frequency Poised to Continue Long-Term Decline
Injuries involving the arms and shoulders bucked the trend of declining frequencies of most other body parts over the past five years. That’s among the findings in a new report on claims frequency in the workers’ comp industry.
While the Great Recession was likely responsible for frequency changes in recent years, other factors are now apparent. NCCI has drilled down into the particulars driving recent rates of injuries.
“The 2010 increase in frequency, the first increase in 13 years, may have been the result of recession-related factors,” said the research brief. “Despite the 2010 uptick, claim frequency resumed its decline in Accident Years 2011, 2012, and 2013. These are very positive signs that suggest that frequency will continue its historical long-term rate of decline.”
The research brief, Workers Compensation Claim Frequency — 2014 Update, expounds on data presented at NCCI’s Annual Issues Symposium earlier this year. The report also includes detailed information on frequency changes by selected claim characteristics and for policies with versus without small deductibles.
Overall Trends
“Claim frequency increased 3.5 percent in Accident Year 2010, the first significant increase in frequency in 20 years,” the report states. “Following the 2010 uptick, claim frequency has declined for three straight years at an average rate of about 3 percent per year.”
Evidence suggests an influx of small lost-time claims contributed to the increase in claims frequency for AY 2010. Workers fearful of losing their jobs may have delayed filing claims in 2009, but then filed them when the economy began to rebound, the authors suggest.
“Despite the 2010 uptick, claim frequency resumed its decline in Accident Years 2011, 2012, and 2013. These are very positive signs that suggest that frequency will continue its historical long-term rate of decline.” — NCCI
One of the changes seen in the most recent figures is the significant decline in frequency of claims above $50,000 in accident year 2012. These claims declined by more than 7 percent, whereas claims between $10,000 and $50,000 declined by 3.1 percent and small claims declined by just 1.4 percent. A closer look reveals two major drivers in the larger claims category.
“Within the Part of Body group, we found that the frequency of lower back claims declined by 11 percent versus 6 percent for all other claims in the category,” the report says. “Similarly, within the Cause of Injury group, we found that the frequency of slip and fall injuries declined by 12 percent versus 4 percent for all other claims in the category.”
Additional Breakdowns
Over the last five years, the frequency of injuries for most body parts declined by 13.9 percent while the frequency of injuries involving multiple body parts declined by 22 percent.
The frequency rate for arm and shoulder injuries, which represent 15 percent of injuries, remained flat. “This may be influenced by an older workforce,” the report suggests, “where rotator cuff injuries are not uncommon.”
In terms of the injury type, frequency for permanent partial and temporary total claims were consistent with the overall decline of 13.9 percent for all injury types while fatal and permanent total claims showed more volatility each year, due to the smaller volume of these claims. The authors note that the figures are based on injury type reported as of first report and that the development of claim counts can differ considerably as they reach ultimate level.
“For example, subsequent to first report, some claims will become fatal claims and others will become PTD claims,” the report explains. “Fatal claim frequency at first report is more than three times higher than permanent total disability claim frequency. However, this difference will decline as claims age since more PTD claims than fatal claims will emerge beyond first report.”
Sprain/strain, comprising the majority share of claims by nature of injury, declined by 10 percent. That compares to a decline of 17 percent for all other categories combined. The frequency of carpal tunnel syndrome claims dropped by 25 percent, although the rate of decline has slowed in the most recent years.
In terms of the cause of injury, there was a steep drop in the frequency of cumulative injury claims — more than 18 percent. Injuries in the category of cut/puncture/scrape dropped by 23 percent. “A possible explanation is that the types of injuries in both of these categories may be relatively more preventable through loss control and safety measures.”
