“Fast-emerging” large workers compensation claims, or those reaching $1 million or an applicable threshold in incurred losses within roughly two years of injury, now make up a majority of all large claims, according to the National Council on Compensation Insurance.
“Fast-emerging” claims accounted for 59% of claims exceeding $1 million in 2023, up from 27% in 2003, according to figures from the industry group. slow-emerging large claims have declined as a share of large losses over the same period.
NCCI defines large claims as those with total incurred losses above specified thresholds, such as $1 million, adjusted for inflation. The group looked at changes in the patterns of large claim emergence across multiple thresholds and over time in the states where it operates.
Claims of $1 million or more remain a small proportion of overall claims, accounting for only 0.34% in 2023, down from 0.52% in 2003, according to the NCCI, which also noted that the incidence of lost-time claims overall has shown long-term decline.
Of the 0.34% in 2023, 0.20% were fast-emerging and 0.14% slow-emerging. That share has fallen significantly for slow-emerging claims and has risen for fast-emerging.
Fast-emerging large claims are often tied to severe traumatic injuries such as vehicle accidents or significant falls, which may require extensive acute care and costly in-home services. Historically, slow-emerging large claims have been linked to injuries like strains or those from lifting. Such injuries escalate gradually.
The shift toward faster emergence suggests that a larger share of catastrophic claims is being recognized earlier in the life of a claim, potentially reducing the number of “lurking” large losses that surface later, the NCCI said. Earlier identification of serious injuries can help insurers manage cases more proactively and may influence ultimate loss outcomes, the group said.
The rise in the proportion of fast-emerging claims underscores evolving cost drivers and claim dynamics within the workers compensation system, the NCCI said.
The share of claims at $500,000 or more fell sharply from 2008 to 2015 “and has remained relatively stable” since then, according to the NCCI, while the share of those at $2 million or more has been “relatively flat” from 2003 to 2023.
This article was first published in Business Insurance
