EXECUTIVE SUMMARY In this issue, we examine the enterprise profile and investment characteristics of U.S. workers’ compensation (WC) insurers, drawing comparisons with the broader U.S. property and casualty (P&C) industry. Our analysis reveals that over the past decade, WC insurers have recorded lower investment income (expressed as a percentage of invested assets) compared to the broader industry. This divergence primarily results from differing appetites for risk assets between the two groups. When analyzing the fixed income portfolios, commonalities emerge between WC insurers and the industry, with both groups displaying comparable durations and credit qualities. Capitalizing on the recent high-interest-rate environment, WC insurers have matched the industry’s performance in fixed income returns, achieving a nearly identical level of book yield by the end of 2022.
Read More
The NEAM Vantage Point series of publications delivers actionable insights to insurance executives by covering a wide range of investment and capital markets topics relevant to the insurance industry.