Large Claims Deconstructed Guide

Posted Date: May 10, 2023  


NCCI’s Large Claims Deconstructed presentation provides an in-depth review of the characteristics and drivers of large claims. In this presentation, large claims are defined as those that cost $1M or more. This Large Claims Deconstructed Guide provides a slide-by-slide examination of the key insights, data sources, and formulas underlying the Large Claims Deconstructed presentation.

As you review the information contained in this Guide, it may be useful to keep in mind the following main takeaways that NCCI’s Large Claims Deconstructed presentation highlighted:

  • Large claims make up less than 0.5% of all lost-time claims, but up to 15% of total workers compensation indemnity and medical losses in any given accident year.
  • Since 2002, the relative frequency of large claims has decreased at an annual rate of 3%.
  • The factors driving inflation in large claims can be vastly different from the trends affecting more typical workers compensation claims.
  • Hospital costs are the biggest driver of large claims. But home health care expenses, medical supplies, and changes in drug prescribing patterns are also significant factors.
  • Large claims can be sorted 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 reach $1 million after the second year and are often soft tissue, degenerative injuries that balloon over time due to multiple medical conditions.
  • Notable diagnoses for fast-emerging claims include burns, spinal cord injuries, and traumatic brain injuries. The frequency of these diagnoses has grown by nearly 7% per year since 2012.
  • Claims from the construction sector make up more than a third of fast-emerging large claims.
  • The most prevalent diagnoses for slow-emerging claims include degenerative disc disorders and pain. The frequency of these diagnoses has decreased by 11% per year since 2012.

We hope you find the Large Claims Deconstructed Guide both a beneficial and informative resource.

Defining Large Claims

Defining Large Claims