WHAT:
NCCI has released new research examining how large workers compensation claims are emerging over time – specifically the changing balance between fast‑emerging and slow‑emerging large claims.
The analysis shows that while overall large claim frequency has declined, a growing share of large claims now reach $1 million in incurred losses much earlier in the life of the claim.
KEY FINDINGS:
- Fast-emerging large claims are becoming a larger share of all large claims.
- At the $1 million threshold, fast-emerging claims increased from 27% in 2003 to nearly 60% in 2023.
- The share of slow-emerging large claims have declined sharply over the last two decades.
- Overall large claim frequency has decreased, but claim emergence patterns are shifting.
- Earlier identification of severe claim characteristics—and improved claims management practices—may be contributing to fewer slow-emerging, “lurking” large claims.
- Drivers differ:
- Fast-emerging claims often stem from severe trauma events such as motor vehicle accidents, falls from elevation. These types of severe injuries sometimes necessitate higher utilization of in-home care—a factor that is known to increase costs.
- Slow-emerging claims are more likely to be tied to strains and lifting injuries. Prescription drugs are often a more significant cost driver for slow-emerging large claims.
- Evidence suggests improvements in care coordination, reduced opioid utilization, and earlier case reserving may be influencing these trends.
WHY IT MATTERS:
This shift in large claim emergence patterns has implications for insurers, policymakers, employers, and the broader workers compensation system:
- Fewer slow-developing claims may reduce uncertainty in pricing, reserving, and long‑term risk assessment.
- Earlier identification of severe injuries helps ensure injured workers receive timely, targeted treatment—supporting recovery and return‑to‑work.
- Trends point to the positive effects of improved claims practices, decreased opioid use, and faster intervention for severe injuries.
- Understanding how and when large claims emerge enables stakeholders to better anticipate costs, allocate resources, and manage complexity.
ADDITIONAL CONTEXT:
The research evaluates large claims across thresholds of $500,000, $1 million, and $2 million, and is based on NCCI states. The analysis builds on NCCI and multi-bureau work exploring trends in “mega claims” (up to $10 million).
Read the full article and view and supporting charts at ncci.com.
