Oct. 17 (Bloomberg) -- U.S. workers’ compensation policy sales plunged 11 percent in 2010 as continued unemployment depressed demand, A.M. Best Co. said today in a statement.
Policy sales fell to $11 billion from $12.4 billion in 2009 for companies in A.M. Best’s workers’ compensation composite index. Revenue has decreased for six straight years and is down 48 percent from the 2004 high of $21 billion, the Oldwick, New Jersey-based insurance-ratings firm said today in a statement.
“Conditions appear to be grim over the near term as the segment continues to experience a long list of challenges,” A.M. Best said in the statement. “Underwriting results are expected to weaken further before they get better.”
Workers’ compensation providers, such as Liberty Mutual Group Inc. and American International Group Inc., raised prices as medical costs increased and the number of claims per worker went up. Net income for the A.M. Best index increased for the first time since 2005 as companies earned more on investments. Net income surged to $1.6 billion last year from about $300 million in 2009, A.M. Best said.
--Editors: Dan Reichl, Peter Eichenbaum
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