Recession expected to have mixed impact on Workers' Compensation insurance market
Harry Shuford, the chief economist at the National Council on Compensation insurance moderated a panel of insurance industry leaders. The panel addressed the issue of the effect the recession would have on Workers' Compensation. The panel concluded that a recession tends to place downward pressure on exposure. Their findings were told to attendees during the Casualty Actuarial Soeciety's ratemaking and product management seminar.
According to Shuford, recessions cause a decrease in employed workers. Wages continue to grow but at a much slower pace.
"In the first two of the three most recent recessions, claim frequency dipped dramatically," he said. "In the most recent recession of 2001, the downturn was already under way, and there was an increase in the rate of decline."
