Comp posts 91% combined ratio in 2025, extends underwriting gains

Workers compensation continued its run of underwriting profitability in 2025, posting a 91% combined ratio and marking the 12th consecutive year of underwriting gains, even as claim severity rose and net written premium edged down slightly, according to the National Council on Compensation Insurance’s annual State of the Line report released Tuesday.

NCCI reported that workers compensation net written premium decreased 0.2% in 2025, while the accident year combined ratio was 102%, with prior years continuing to experience downward reserve development. The organization also estimates the industry’s reserve position remains redundant by approximately $14 billion.

Lost-time claim frequency declined by 2% in 2025, continuing a long-term downward trend, although at a slower pace than the long-term average decline. At the same time, both medical and indemnity claim severity increased by 4%, reflecting continued cost pressures across the system.

NCCI said frequency declines remain the main driver behind loss cost decreases. The decline is broad-based and heavily influenced by payroll growth, and the organization said its ratemaking process accounts for the data while also reflecting broader analytical insights.

In a statement accompanying the report, Donna Glenn, chief actuary for NCCI, said broader market dynamics continue to shape workers compensation results beyond the headline combined ratio.

“There’s not a single number that defines the workers compensation system. Behind this year’s 91 combined ratio, industry mix, state differences, and carrier variation are all shaping results,” she said in the statement.