Mark Walls, Safety National’s Vice President of Client Engagement, joined forces with Kimberly George, Sedgwick’s Global Head of Innovation and Product Development, to identify 20 critical workers’ compensation trends that should be on everyone’s radar for 2022.
In part two of our coverage, we break down the next 10 major issues that every risk manager and insurance professional should monitor.
11. Employee Benefit Integration
Talent marketing in 2022 will consistently focus on employee benefits, access to care and services to support living a fulfilled life, company culture and career opportunities. Employers, payers and case management firms should strongly consider benefit integration in an injured worker’s health and recovery plans. Assessing social determinants of health, employee benefits and community health resources is critically important for a full recovery.
12. Labor Shortage’s Impact on Workers’ Compensation
With a widespread labor shortage impacting every industry, wages rise as businesses compete for workers, translating to higher costs for consumers. With workers’ compensation premiums tied to payrolls, fewer workers mean fewer premiums, and while higher wages may offset this somewhat, overall industry premiums are down. Additionally, inadequately trained staff, longer shifts and fatigue could lead to increased claims frequency.
13. Return to the Office
Employees will likely have more options for flexible work hours and time in the office, but there are a couple of items to contemplate as workspaces change. How do carriers consider the safety of remote work locations in the insurance and underwriting process? Are employers accurately reporting their remote work setting conditions?
14. Future of Communicable Diseases in Workers’ Compensation
Workers’ compensation was designed to cover risks particular to employment, from traumatic injuries to occupational diseases, not global pandemics. However, many states have enacted presumptions that COVID-19 is work-related under certain conditions. Some states that have expanded coverage beyond COVID-19 could open the door for future outbreaks being covered under workers’ compensation.
15. Social Inflation
With nuclear verdicts ever-increasing, social inflation continues to be a problem for businesses and public entities. For some, the result is lowered limits on what protection carriers are willing to provide, leaving businesses uninsured for the full exposure of the nuclear verdicts occurring. Tort reforms and liability limits could provide some relief, but there seems to be little appetite for these in state legislatures.
16. Evolving Risks and Insurance Coverage Gaps
Coverage gaps developing in response to emerging risks and changing risk profiles continue to challenge risk managers. Carriers are reducing capacity and raising prices in many liability lines of coverage – including general liability, commercial auto and public entity liability – making it increasingly more difficult for risk managers to limit all of their potential exposures with insurance coverage.
17. Ransomware and the Cyber Market
The cyber insurance market has seen many challenges in the past few years, and premiums have soared. Cyber carriers are less risk-tolerant and now require extensive knowledge and awareness of an insured’s cyber security protocols and remediation plan. Even with the improved understanding, a company may experience reduced policy limits and adjustments to the terms and conditions.
18. Burden of Bureaucracy
Workers’ compensation is the most highly-regulated line of insurance, from underwriting policies to claims payments, and posting notices governed by rules with associated fines and penalties for mistakes. The pandemic exposed outdated regulations, like required paper documents to be physically signed or issuing payment by check instead of electronic banking or debit cards. Additionally, staffing challenges at state agencies increase delays in the system, further adding to costs.
19. Evolving State of Workers’ Compensation
Employers are improving their desire to streamline workers’ compensation claims processing by evaluating intake efficiency, unnecessary or redundant forms and how their process can improve the stakeholder experience. With turnover being a continuing challenge in claims management roles, risk managers and claims managers are more aware of how their approach impacts experience and injured employee engagement.
20. Workplace Violence
Law enforcement officers, healthcare workers and K-12 teachers and staff have dealt with workplace violence for many years. Now, retailers are facing this issue with rising crime. The transportation industry is also subjected to frequent assaults on bus drivers, flight attendants and other workers. While most of these occupations cannot separate themselves from the general public, de-escalation training can help in some situations.
For part I of our Issues to Watch coverage, click here.