Workers’ Compensation is Highest Risk Sector

Source: WorkCompAcademy.com

Sacramento, CA – According to a new A.M. Best Co. Inc. special report,the U.S. workers compensation industry experienced more financial impairments during a 17-year period from 2000-2016 than any other property/casualty line of business.

Best defines impairments as being situations in which a company has been placed, via court order, into conservation, rehabilitation and/or insolvent liquidation.

Overall, 354 property/casualty insurers became impaired during the study period.

Supervisory actions undertaken by insurance department regulators without court order were not considered impairments for this study unless delays or limitations were placed on policyholder payments, Best said in a statement.

According to the study, the workers compensation sector accounted for 26% of the impairments; commercial lines insurers represented 22% of the impairments, split between other liability/commercial multi-peril at 15% and commercial auto at 7%; and 23% of impairments were split among specialty lines. The remaining sectors accounted for personal lines.

Specific causal factors were identified for 91 of the impairments, with fraud or alleged fraud the leading cause and present in 23 of the impairments, while 21 impairments related primarily to affiliate problems.

Catastrophe losses, largely in Florida and Texas, were responsible for 18 impairments, while 16 companies suffered impairment after experiencing rapid growth, the according to the statement.

Of the 354 impaired companies during the period, 45% were rated by Best at some point during the period between the date of impairment and three prior year-ends.

The study concludes that there has been a significant decline in the number of impairments that Best has been involved in rating in recent years. From 2007-2016, there were 174 U. S. property/casualty impairments, of which 21% were rated by Best at a point during the period between date of impairment and three prior year-ends, compared with 45% for the 2000-2016 period, according to the statement.

Rada Kleyman
Risk Manager

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About Rada Kleyman

Ms. Rada Kleyman is a Risk Manager at Libertate Insurance. At Libertate Ms. Kleyman is inspired by the following mantra “prevention is better than cure”. She believes it is all about in avoiding and mitigating the effects which are essentially unavoidable. Her direct role and responsibility is to facilitate internal sales efforts as well as the servicing of existing PEO clients. Ms. Kleyman brings a full complement of sales and management skills with over 28 years of successful experience. Highly effective in competitive environments with exceptional time management, strong interpersonal, presentation and closing skills which she acquired selling exotic cars for Ferrari of North America and prior to that Capital Medical Radiology Equipment Sales overseas. She is a recognized top performer, leading stores and accounts to exceed expected growth. Ms. KIeyman is graduate of Northeastern University in Boston with a BS Degree in Criminology with a minor in African Art. She holds a General Lines (Prop & Cas) GL 2-20 license and 4-40 Customer Representative License. Libertate Insurance LLC Vigilant Insurance Representation 707 E. Washington Street, Orlando, FL 32801 844.571.0810 407.613.5475

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