NCCI has been conducting their Annual Issues Symposium this week, and as usual they have provided a slick presentation format filled with highly accurate and useful data for the industry. The numbers they have been reporting are undeniably encouraging. The industry is profitable, incident rates are down, and, most critically, Covid did not have the impact that was once initially feared. The wave of expected Covid claims did not materialize, and as importantly, the industry pivoted and adapted to unexpected changes with surprising fluidity.
All in all, a great snapshot for the industry. Or was it?
By all accounts, NCCI is a great organization doing a yeoman’s job for the states they serve. I have tremendous respect for the organization. However, they represent (by my fumbling and haphazard count on this here map) 35 of the 50 United States, and the data they have access to is limited to those jurisdictions. Industry “media” (news sources, talking heads, thought leaders, tweet demons, pundits, etc.) are generally interpreting and portraying the data that is reported as being representative of the workers’ compensation industry across the entire nation. That is not by any means an accurate description.
NCCI is not the licensed rating and statistical organization for Washington, Wyoming, North Dakota, Ohio, Minnesota, Wisconsin, Michigan, Indiana, Massachusetts, North Carolina, Delaware, Pennsylvania, New Jersey, New York, or California. Additionally, they do not have, by my understanding, access to data of self-insured entities, which by some estimations can represent one-third of the workers’ compensation market.
The positive news they reported regarding Covid was generated using data that omits 5 of the top nine states in the nation when it comes to Covid case counts. Just the absence of California data alone means that a huge swath of workers’ compensation activity and statistics are not included in the final reports. It is also quite possible that incidents in two of the potentially most Covid vulnerable professions, healthcare, and first responders, were largely contained within self-insured systems. Data from those incidents would not have been included in NCCI reports, even in states they represent. In her presentation Tuesday at AIS, NCCI Chief Actuary Donna Glenn reported just 45,000 Covid claims were seen by the industry. In a February Out Front Ideas webinar, CWCI reported that over 100,000 such claims had been submitted just in California.
The reports issued by NCCI are indicators for the industry and important indicators at that. But the very nature and limitations of the data upon which they are built means that they cannot be considered the “be-all and end-all” regarding the total performance of the workers’ compensation industry. There will be those who view this article as an attack on NCCI. It is not. In no way is it intended to be a criticism of the work they do. It is the broader industry digestion of that data; the way it is conveyed that is the issue. The industry’s tweeters, pundits, thought leaders, and talking heads should be defining the difference for their audience, and not portraying results as representative of the states and regions not included in the mix.
That is not happening. At least not until now.