The U.S. workers’ compensation insurance sector continued to show strong financial health in 2024, even as medical and indemnity claim severity rose. According to the National Council on Compensation Insurance (NCCI)’s 2025 State of the Line report, net written premiums dropped by 3% from the previous year, while the combined ratio held steady at 86—unchanged from 2023.

This marks the eighth straight year in which the workers’ comp market has maintained a combined ratio below 90, indicating sustained profitability. NCCI, which analyzes workers’ compensation data and recommends rates across 38 states, noted that workers’ comp was the only major property/casualty insurance line to experience a decline in premium volume in 2024. This drop was attributed to falling rates that outpaced payroll growth.

Industry Remains Strong Despite Rising Severity

Despite the premium reduction, workers’ compensation remains a high-performing line of business. However, both medical and indemnity claim severities increased by 6% in 2024, highlighting a growing cost burden.

“Workers’ compensation continues to operate in a period of exceptional financial performance, supported by solid results and a stable foundation,” said Donna Glenn, Chief Actuary at NCCI. “Although early signs of possible challenges are emerging, the industry remains well-prepared to address them.”

Additional Findings from the Report:

• The accident year 2024 combined ratio came in at 99, with continued favorable development on reserves from prior years.

• The industry holds an estimated reserve redundancy of $16 billion.

• Lost-time claim frequency dropped by 5% in 2024, a sharper decline than the long-term average.

NCCI highlighted that, while the long-term trend of declining claim frequency persists, unique industry dynamics made 2024 stand out.

Industry-Specific Trends

One notable factor affecting claims patterns is the shift to remote work since 2020. Office-based employees who continue working remotely are generating fewer claims, keeping frequency levels lower.

In the leisure and hospitality space, claim frequency among restaurant workers declined in both 2022 and 2023. Meanwhile, other parts of the sector saw flat trends in claim frequency.

The healthcare industry, excluding COVID-19-related cases, also saw an overall reduction in claim frequency from 2015 through 2023. This drop was driven largely by a nearly 30% decline in strain injuries.

However, a different trend emerged in private education, where injury frequency actually rose. The increase was largely tied to “struck or injured by” incidents, which may reflect a rise in workplace violence in that sector.

Looking Ahead

“While workers’ compensation claims continue to decline overall, the variation across industries paints a more complex picture,” Glenn added. “Today’s workforce is safer than ever before, but digging into industry-level patterns helps identify both potential risks and opportunities within the system.”