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Digital EditionWorkers’ Comp Reserve Releases Top $5 Billion Again but Carry Less Weight in Banner Year
U.S. property & casualty insurers recorded $5.51 billion in favorable workers’ compensation reserve development in calendar-year 2025, continuing a streak that has made the line one of the most reliable sources of reported profitability for the industry, according to an S&P Global Market Intelligence.
Yet in a year when total favorable development across all P&C lines surged to $18.79 billion — more than triple the 2024 figure — workers’ comp accounted for just 29.3% of the total, down from a minimum of 90% in each of the prior six calendar years, according to S&P, which analyzed Schedule P in insurers statutory annual statements.
Older accident years driving a growing share of releases
For risk managers and buyers tracking the health of the workers’ comp market, the composition of those reserve releases matters as much as their size, S&P said. A growing share of favorable development is coming from accident years that are a decade or more old. Accident years 2015 and prior contributed $2.37 billion of the 2025 total, representing 43% of all workers’ comp favorable development — up sharply from 19.4% four years earlier, the analysis found.
That shift suggests the industry may be drawing down long-accumulated reserve cushions rather than discovering new redundancy, according to S&P. CNA Financial Corp.
At the same time, a meaningful concentration of releases is appearing in mid-range accident years. Accident years 2018 through 2020 generated $1.65 billion in favorable development, nearly 30% of the line’s total. The S&P analysis attributed much of that to conservative reserving assumptions set during a period of pandemic-related uncertainty — when interrupted medical treatment schedules and unreliable severity data led actuaries to adopt cautious initial loss picks. As those years have matured, a portion of that conservatism has proved unnecessary.
Large writers dominate the release picture
A handful of major workers’ compensation carriers drove a disproportionate share of the industry’s net favorable development. Liberty Mutual Holding Co. Inc. recorded $1.29 billion in favorable workers’ comp development in 2025, followed by The Travelers Cos. Inc. at $693.7 million and State Compensation Insurance Fund at $496.1 million, the analysis found.
Travelers CFO Daniel Stephen Frey said during a January call that favorability in reserves in its business insurance segment “has really been driven by workers’ comp,” while noting the line remains long-tail with “a little bit of uncertainty.”
Liberty Mutual’s workers’ comp releases were part of broader reserve movements that included $1.24 billion in favorable private auto liability development and $1.26 billion in adverse other liability-occurrence development, resulting in $2.24 billion in net favorable development groupwide.
Adverse workers’ comp development across the industry was minimal, the report said. &
