After the prior three years of an underwriting profit followed by two years of minor underwriting losses, the combined ratio for workers compensation shot up 9 points in 2009, the largest single year increase since the mid 1980s. The line was one of only two (in addition to ‘other liability’) that had an increase in combined ratio for 2009 over 2008.
These deteriorating underwriting results, combined with the record low interest rate environment left the line at only slightly better than break-even after investment income is considered.”
However, NCCI added that 3 points of the combined ratio increase was due to reserve strengthening by a single carrier. Excluding that, the industry combined ratio would have been 107, still a significant deterioration from 2008. NCCI said deteriorating underwriting results combined with the record low interest rate environment left the line at only slightly better than breakeven after investment income is considered.