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Workers comp renewals stay competitive as severity pressures build - Business Insurance Skip to content Register for free Search Search Log In Risk Management Cyber Risks Pricing Trends Mergers & Acquisitions Technology Sponsored Content WSIA RISKWORLD Workers Comp & Safety Workers Comp Cost Control Pain Management Workplace Safety International EMEA Asia-Pacific Latin America People Events BI Intelligence Top 100 Agents & Brokers Best Places to Work 2025 Lists Directories Insurance Pricing BI Stock Index Magazine Current Issue Past Issues Subscribe Women to Watch ALL INsurance Resources Risk Perspectives Sponsored Content Webinars White Papers Risk Management Cyber Risks Pricing Trends Mergers & Acquisitions Technology Sponsored Content WSIA RISKWORLD Workers Comp & Safety Workers Comp Cost Control Pain Management Workplace Safety International EMEA Asia-Pacific Latin America People Events BI Intelligence Top 100 Agents & Brokers Best Places to Work 2025 Lists Directories Insurance Pricing BI Stock Index Magazine Current Issue Past Issues Subscribe Women to Watch ALL INsurance Resources Risk Perspectives Sponsored Content Webinars White Papers Risk Management Cyber Risks Pricing Trends Mergers & Acquisitions Technology Sponsored Content WSIA RISKWORLD Workers Comp & Safety Workers Comp Cost Control Pain Management Workplace Safety International EMEA Asia-Pacific Latin America People Events BI Intelligence Top 100 Agents & Brokers Best Places to Work 2025 Lists Directories Insurance Pricing BI Stock Index Magazine Current Issue Past Issues Subscribe Women to Watch ALL INsurance Resources Risk Perspectives Sponsored Content Webinars White Papers Risk Management Cyber Risks Pricing Trends Mergers & Acquisitions Technology Sponsored Content WSIA RISKWORLD Workers Comp & Safety Workers Comp Cost Control Pain Management Workplace Safety International EMEA Asia-Pacific Latin America People Events BI Intelligence Top 100 Agents & Brokers Best Places to Work 2025 Lists Directories Insurance Pricing BI Stock Index Magazine Current Issue Past Issues Subscribe Women to Watch ALL INsurance Resources Risk Perspectives Sponsored Content Webinars White Papers Workers comp renewals stay competitive as severity pressures build by Louise Esola Aon , Willis Towers Watson Jul 15, 2026 Midyear workers compensation renewals remained favorable for employers nationally, but a proposed double-digit increase in California advisory pure premium rates is raising concerns that claim severity and medical costs could eventually erode soft market conditions. Insurers continue to compete aggressively for profitable workers comp business and are using the line to secure or retain broader casualty and umbrella relationships, brokers say. “Many insurers continue to view workers comp as their most profitable casualty line and are willing to use it strategically to retain or win broader relationships,” said Matthew Hannon, New York-based U.S. national casualty practice leader at Aon. Heavily marketed accounts continue to see rate decreases and there are no signs of a hardening market, though insurers remain focused on premium adequacy, medical inflation and claim severity, he said. California, however, contrasts sharply with national trends. The California Workers’ Compensation Insurance Rating Bureau has proposed a 10.4% average increase in advisory pure premium rates effective Sept. 1, following an 8.7% increase a year earlier. By comparison, loss costs and rates are declining an average of 5% in National Council on Compensation Insurance state filings effective in 2026, an NCCI spokeswoman wrote in an email. “California is not a harbinger of things to come,” she said, adding that the state’s pressures are largely unique and centered on cumulative trauma claims. Such claims account for more than 25% of California claims, compared with less than 6% in NCCI states, where no increasing trend is evident, she said. Still, California employers should be concerned about a potential second consecutive sharp increase in costs while national comp costs shrink, said Steve Westcott, Philadelphia-based senior director of casualty broking at Willis Towers Watson. WCIRB data shows cumulative trauma claims rose from 17.8% of indemnity claims in accident year 2022 to 26.4% in 2024. Such claims are often legally complex, costly to litigate and slow to resolve, Mr. Westcott said. Wage growth is also increasing benefit costs. Employers should closely manage experience modification factors and claims performance by strengthening safety programs, accelerating return-to-work, validating reserves and identifying loss drivers, he said. Workers comp has also become more important in broader casualty programs as umbrella and excess liability markets remain challenging, said Ben Powers, Atlanta-based head of large and complex primary casualty placement at WTW. Workers comp is “the profitable line and the only soft line of casualty right now,” making it the “jewel” of many employers’ programs, he said. Insurers providing umbrella capacity increasingly want the comp business, which may prompt employers to reconsider an otherwise satisfactory placement to preserve capacity or improve broader pricing. “Workers comp has become that anchor for a carrier to offer that umbrella solution,” Mr. Powers said. Despite strong competition, brokers and risk managers are seeing rising severity, medical inflation, longer claim duration and increased litigation. Claim frequency remains favorable, but those trends could eventually alter pricing, Mr. Powers said. “We may be hitting an inflection point in the next year to two years as far as rate,” he said. Risk managers see a similar dynamic, said Manny Padilla, New York-based president of the Risk & Insurance Management Society and vice president, risk management & insurance for MacAndrews & Forbes. Medical inflation, wage growth and catastrophic injury severity remain concerns, particularly vehicle-related workplace accidents, he said. Rate decreases also may not reduce total premiums because payroll growth can offset pricing declines. “What I’m seeing is your rate is coming down a little bit, but your payroll is increasing, so that’s where you get your flat number,” Mr. Padilla said. The aging workforce is another concern in construction, warehousing and manufacturing, where health conditions can complicate recovery and extend claims, he said. For employers with favorable loss performance, however, the market remains attractive. Insurers are increasingly differentiating accounts based on loss experience, safety culture and how effectively employers present their risks, Mr. Hannon said. “The market remains favorable,” he said. 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