Fitch Predicts Strong Underwriting in 2021, but Profitability Unsustainable

Workers’ compensation underwriting performance should remain strong in 2021, but current levels of profitability are not sustainable over the long term, according to Fitch Ratings. Fitch said it expects strong performance in 2021 as a result of recent reductions in claim frequency and recognition of material reserve redundancies. “However, this level of profitability is unsustainable longer term, as claims trends are expected to normalize while competitive forces create renewed pricing pressure,” Fitch said. Combined ratios for the work comp segment were at or below 90% in...