Study: Workers' comp affected more by stock market than by claims

09/20/2011 | PropertyCasualty360

The increase in workers' compensation premiums is more likely linked to stock market results than increases in claims payments, according to a study by researchers at the University of California Davis. "Insurance companies appear to have been setting premiums according to their returns on the stock and bond markets, not according to the number of claims they have. They invest because they need a financial cushion to pay for claims and, if they lose, raise premiums to recoup their losses," said J. Paul Leigh, a professor of public health sciences at the university.

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