U.S. workers’ compensation net written premium decreased 0.2% in 2025, according to the National Council on Compensation Insurance (NCCI).
NCCI reported that while the calendar year 2025 combined ratio for workers’ compensation is 91 (compared with 86 the prior year), the workers’ comp accident y
ear 2025 combined ratio is 102 with prior years continuing to experience downward reserve development.
The annual State of the Line Report analyzed U.S. private workers’ comp carrier data from the 38 states served by NCCI.
NCCI said it’s the 12th consecutive year where the workers’ comp calendar year combined ratio measured below 100, an indication of the line’s overall profitabili
ty. However, there are important differences to consider when gleaning the data, including state m
ix and industry mix as well as operational results, said Donna Glenn, chief actuary at NCCI, when releasing the results.
The last time the accident year combined ratio jumped above 100 was the “Covid” years, accor
ding to Glenn. She said the rise in 2025 accident year combined ratio is not surprising, adding that Cal
ifornia, which accounts for 20% of the workers’ comp industry, reported a 2025 accident year combined ratio of 129. California has reported accident year comb
ined ratios over 100 for the past five years, she said, and is influencing countrywide accident year combined ratios overall.
The NCCI report also revealed that lost-time claim frequency declined by 2% in 2025, a slower pace of decline than the long-term average. However, workers’ comp
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claim severity in 2025 grew, with increases of 4% for both medical claim severity and indemnity claim severity.
“Frequency continues to decline, severity is nuanced but explainable, and industry and state mix matter,” Glenn said.
Will there be a turn in frequency?
Glenn said NCCI does not see a turn in frequency occurring “systemically” and expla
ined that there are unique reasons that are contributing to upticks in frequency in individual state results, such as increases in tourism and hospitality.
She also noticed differences when looking at industry mix.
For example, the rate of frequency decline for the construction industry outpaces all of
the other industries when reviewing lost-time claim frequency. That trend has held since 2015 and overall has seen a frequency decline of nearly 40%.
However, healthcare remains a higher frequency industry, she said, noting that while healthcare has generally decreased over time, the rate of frequency has
ticked up over the last year. Glenn said this trend could be due to the uptick in employment over the p
ast few years. “Newer employees with less experience generally have a higher incident rate,” she noted.
“There’s not a single number that defines the workers’ compensation system,” Glenn said. “Be
hind this year’s combined ratio of 91, factors such as industry mix, state differences, and carrier variation are all shaping results.”
