Insurance - Property & Casualty: YE2025 Statutory Data: Workers' Comp: Too Much Profit and No Pricing

Research evidence excerpt

Insurance - Property & Casualty: YE2025 Statutory Data: Workers' Comp: Too Much Profit and No Pricing

Foundation

June 9, 2026 04:01 AM GMT

Morgan Stanley & Co. LLCMInsurance - Property & Casualty | North America Bob Jian Huang

Equity Analyst

YE2025 Statutory Data: Bob.Huang@morganstanley.comDaniel Lee, ACAS +1 212 761-6136

Research Associate

Daniel.Lee4@morganstanley.com +1 212 761-0219

Workers' Comp: Too Much Siddhant Shah

Sid.Shah@morganstanley.com +1 212 761-2603

Profit and No Pricing

Workers' Compensation remains a source of strong profitability

for the industry, implying tepid pricing. Going forward, we expect

steadily rising medical costs and wage inflation to gradually push Insurance - Property & Casualty

the combined ratio higher amid weak pricing. North America

Industry View Attractive

I'd greatly appreciate your support for the Morgan Stanley P&C and Life Insurance

Research teams in this year's All-America Extel survey. Thank you so much! - Bob

How to vote: To request a ballot, please go to https://www.extelinsights.com/voting

and select “All-American Research Team”.

One of the most profitable LOBs, but combined ratios likely to mean revert.

Based on the latest 2025 statutory disclosures, Workers' Compensation (WC)

remains one of the most profitable commercial P&C lines, supported by favorable

claim frequency trends, strong underwriting discipline, and years of reserve

redundancies. That said, the WC outlook appears incrementally less favorable.

Pricing remains under pressure as abundant industry capital and sustained

profitability continue to drive competitive behavior, while many large carriers are

nearing the point where reserve releases are likely to moderate after a prolonged

period of favorable development. As a result, Workers’ Compensation may provide