NCCI recently conducted its annual survey of insurance executives on top-of-mind issues in the workers compensation (WC) industry. This 25th annual survey draws feedback from more than 100 carriers annually and helps guide NCCI’s data-driven research, thought leadership, and many other NCCI initiatives.
Several points of concern stand out in response to NCCI’s latest Carrier Executive Survey:
- The financial health of the system and rate adequacy
- Economic uncertainty
- Medical costs and inflation
- The changing workforce and workplace
- Growing attention on artificial intelligence (AI)
This article addresses what’s top of mind for carrier executives and how NCCI is addressing these issues.
Financial Health of the System and Rate Adequacy
Executives expressed concerns about the steady decline in rates and loss costs, and their potential implications for carrier rate adequacy. NCCI’s filed and approved loss costs and rates have largely declined for more than a decade. This trend is driven by decreases in claim frequency, moderate medical and indemnity claim cost changes, and growing wages, which drive premium growth.
A first look at the combined ratio for Calendar Year 2025 indicates that the ratio is projected to be between 85% and 93%, which would mark 12 consecutive years with a combined ratio under 100%.
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NCCI’s latest loss cost and rate filings have mostly been decreases.
- There also have been a few increases reflecting the uniqueness of each state.
- The pace of declines has slowed in recent years, as the pace of wage growth has eased relative to post-pandemic highs
- Rate filing decreases have been moderate and are generally in line with expectations based on our ongoing analysis of industry trends.
- Increases in payroll and declining frequency have been outpacing increases in claim costs.
Bottom line: NCCI continues to analyze every available metric and conducts thousands of carrier engagements each year. We are monitoring for indicators that could reveal a turn, taking into consideration what we hear from stakeholders. But based on the latest data, we don’t anticipate any imminent reversal to current trends.
Additional insights: Will There Be a Turn? (coming soon),
Underwriting Cycles (video),
2025 State of the Line Guide,
Understanding Loss Cost Actions
While economic uncertainty has come up consistently in survey results for several years, the issue is drawing more attention this year.
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Even with many unknowns, the economy has remained resilient through the first half of 2025. Gross Domestic Product growth remains solid, averaging 1.6% in the first half of the year. A recession appears less likely than it may have seemed earlier in the year.
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Despite overall growth, the labor market has slowed meaningfully. While job growth has stagnated, wage growth remains elevated, supporting payroll and premium growth for workers comp.
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The weakness in hiring may prove temporary as economic uncertainty starts to lift and the economy continues to grow.
Additional insights:
Quarterly Economics Briefing (QEB)-Q3 2025,
Labor Market Insights
Medical Costs and Inflation
Medical inflation in WC is different than medical inflation in the broader economy. Consider the different types of injuries and treatment in WC or the categories of treatment that are weighted differently. It’s important to look behind the numbers, as NCCI has identified in the
Workers Compensation Weighted Medical Price Index.
- While medical inflation remains in-line with the 5-year average, medical severity in AY 2024 grew by about +6%, pointing to an uptick in utilization of medical services.
- Beyond prices paid, medical costs reflect changes in treatment patterns, which NCCI will report on in the coming year.
- With the prevalence of generic drugs and existing plans from major manufacturers to produce domestically, we see a diminished risk to price increases for drugs from tariffs.
- Fee schedules are an important factor in keeping workers compensation medical costs in control. These state-mandated cost containment mechanisms put limits on WC payments to healthcare providers and how much those payments can change from one year to the next.
Bottom line: Currently, medical inflation and its impact on workers compensation is moderate and in the range of 2.5–3.5%. Medical costs reflect changes in the services rendered.
Additional insights: Medical Resources one-pager,
Workers Compensation Weighted Medical Price Index
Impending retirements, a talent shortage, and an aging workforce are regularly cited as some of the drivers of uncertainty around a changing workforce.
- While there is some skepticism about the sustainability of the labor market, right now we are at a 4.3% unemployment rate. NCCI’s economists document workforce activity monthly in theLabor Market Insights report.
- Evolving workforce demographics are reshaping workplace risk profiles and impacting workers compensation claims. NCCI will leverage state and national data for a forthcoming report to examine the dynamics affecting our industry.
Additional insights:
Labor Market Insights,
Quarterly Economics Briefing (QEB)-Q3 2025.
Emerging Issues: Artificial Inteligence
While the above concerns have remained prominent in recent years, underscoring their importance to the industry, there is a notable rise this year in mentions of AI. While carriers are gaining various efficiencies in their operations using AI tools, the potential impact on payroll and the workforce of the future remains uncertain. NCCI will host an engaging session on AI at
Annual Issues Symposium 2026 to address this growing area of concern and opportunity.
While agentic AI has gained some adoption within the industry, physical AI may soon enter the workplace. The workforce of the future may include robots doing dangerous jobs. NCCI continues to monitor these developments—examining potential implications such as human-robot interactions at work and their effect on claim frequency. Though some scenarios may seem to be in the distant future, NCCI will keep a watchful eye on AI applications and their potential impact on the workers compensation system.
Input from the Carrier Executive Survey helps to shape future initiatives and refine how NCCI delivers value to the industry. Resources like
Labor Market Insights and
Medical Inflation Insights were developed based on feedback that stakeholders were looking for real-time data and analysis. .
Today, we are actively enhancing our online user experience, making it more intuitive to access the tools and information that you depend on from NCCI. We are also constantly looking to expand the depth and breadth of our research, including our work with other workers compensation bureaus. At
AIS 2026, we will showcase these efforts on the mainstage, reinforcing our commitment to cross-bureau collaborations.
Insights from thousands of annual engagements, combined with the investment from our carriers—medical and indemnity data—enables us to validate trends and deliver data-driven insights.
These insights address interconnected concerns: the health of the system depends on economic stability, wages, and jobs; medical costs remain a critical component of overall claims; and emerging technologies like AI may redefine job roles and reshape the workforce. By analyzing today’s realities and anticipating tomorrow’s challenges, NCCI can help you prepare for the future.
This article is provided solely as a reference tool to be used for informational purposes only. The information in this article shall not be construed or interpreted as providing legal or any other advice. Use of this article for any purpose other than as set forth herein is strictly prohibited.