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Friday, August 9, 2013

Texas Pointing Way to Healthy Market

Today's post was shared by WorkCompCentral and comes from daviddepaolo.blogspot.com

The health of the workers' compensation industry has direct ties to the health of the economy.

This makes absolute sense - an employer's premium is calculated in large part by the size of an employer's payroll, modified by the type of jobs that are being performed by the employees represented by that payroll.

Texas' had not been as hard hit by the recession as the other large states, and now it appears that the state is really taking off, economically, if the adage that workers' compensation reflects the economy is to be believed.

Here's the good stats:

Written premiums increased 13.1% from 2011 to 2012 according to the Independent Insurance Agents of Texas.

The state's dominant carrier, Texas Mutual, saw its share of the market increase by 3.3% over the same period, from 33.8% in 2011 to 37.1% in 2012.

The even better news for Texas is that, based on Texas Department of Insurance statistics, Texas Mutual wrote $244 million in premium during the fourth quarter of 2012, with the residual market accounting for only $1.4 million in premium. According to the same report, Texas Mutual's residual market premiums have stayed relatively stable since 2007, the first year in the report.

Texas is an optional state. I take this information two ways: either more employers are opting in and qualifying outside of the risky, residual market underwriting standards, or those with high risk and, ergo, high potential premium, are going bare and never entering the work comp market.

But the kicker is...

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