N.H. Workforce Starting to Show Its Age and Growth in Lower Risk Jobs in Workers’ Comp

Workers’ compensation writers in New Hampshire want an average 2.5 percent hike for voluntary market advisory loss costs and a 12.7 percent average increase in residual market premiums, according to the most recent filing from the National Council on Compensation Insurance (NCCI).

The bid reflects a steadying of claim frequency, weak hiring in high-risk construction and manufacturing fields, and the continued aging of the state’s workforce.

New Hampshire Insurance Commissioner Roger Sevigny held an Oct. 15 hearing date on the filing.

The filing came after a NCCI presented an overview of the state’s workers’ compensation market showing that New Hampshire’s loss costs as a factor of payroll (1.55) compare favorably with those in nearby Maine (1.51), Rhode Island (1.63) and Vermont (1.70), although they come in slightly above the regional average (1.47) and well above the national average (1.27).

The NCCI snapshot showed how the profile of workers compensation risks in the state has changed since 1997. Clerical classes remain the largest category, but there are more professional, outside sales and retail risks than four years ago.

As for combined ratios, recent years have seen a steady improvement: 1999 (130%); 2000 (123%); 2001 (110%) and 2002 (106%).

Among the major trends in the Granite State cited by NCCI:
• After years of decline, claim frequency in the state appears to have leveled off. Out of every 100,000 workers, about 6,771 file claims.
• By injury type, 75.4% are medical only; 20.2% are temporary total; and 4.4% are permanent total or fatal.
• Claim frequency is not expected to rise very much, in part because of a “tepid” job outlook in the more hazardous construction and manufacturing sectors.
• Indemnity severity, however, could increase due to gains in wages and the aging of the state’s workforce.

As in previous reviews, NCCI noted that attorney involvement in New Hampshire’s worker compensation system is well below the countrywide average —only 6.4 percent of cases compared to 13.1 percent across the country.

The state’s residual market continues to grow in policy count, registering 10,229 in 2003, a 20 percent jump over 2002. Residual market premium volume jumped more than 30 percent to $34.4 million in 2003.

The vast majority (74%) of policies in the residual market are smaller premium accounts, with an annual premium under $2,499. The top classes by policy count in the residual market are clerical (8.6%); carpentry, family dwelling (5.9%); wallboard installation (4.4%); buildings, operations by owner (4.1%) and carpentry (3.5%).
Only 22 of the total 10,229 accounts have a premium exceeding $100,000.

This is an edited version of an article that originally appeared in the print edition of Oct. 25 Insurance Journal East.