Large Claims Deconstructed
Raji H. Chadarevian |
Executive Director—Actuarial Research, NCCI
Anae Myers, ACAS, MAAA |
Associate Actuary, NCCI
Severely injured workers are an ongoing concern for the workers compensation industry. Raji and Anae revealed the characteristics of these injuries, underlying frequency trends, and associated cost drivers.
- New research from NCCI sorts large claims—those of more than $1 million—into two groups: fast-emerging claims and slow-emerging claims. Fast-emerging claims reach $1 million within two years and are typically the result of severe traumatic injuries. Slow-emerging large claims are often soft tissue, degenerative-type injuries that escalate over time due to multiple medical conditions.
- Since 2002, the relative frequency of claims exceeding $1 million has decreased at an annual rate of 3%.
- The relative frequency of burns, spinal cord injuries, and traumatic brain injuries with claims of more than $1 million has grown by nearly 7% per year since 2012. By contrast, large claims for degenerative disc disorders and pain have decreased by 11% per year.
- Claims from the construction sector make up nearly a third of fast-emerging large claims.
- The factors driving inflation in large claims can be vastly different from the trends affecting more typical workers compensation claims.
Large Claims Deconstructed Video