NJCRIB DATA DRIVEN. FORWARD THINKING. 2019 Annual Report Port Newark – Elizabeth Marine Terminal NJCRIB How to use this workbook Open the interactive workbook in Adobe Reader Navigate through the document using the navigation buttons on the top of the screen. Home Blue Arrow White Arrow Click on the home icon to return to the table of contents Click on the arrow to navigate to previous page Click on the arrow to navigate to next page Note: Interactivity is not available on smartphones or tablet devices. You must use Adobe Reader for the full functionality to work. Notice and Copyright New Jersey Compensation Rating & The 2019 Annual Report was created by the New Jersey Workers Compensation Rating and Inspection Bureau Inspection Bureau for the convenience of its 60 Park Place users. The Bureau has made reasonable efforts to ensure the accuracy of this Report. 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State Capitol NJCRIB Table of Contents Executive Director’s Message 5 Residual Market Statistics Committee Membership 6 Chart 22: Residual Market Written Premium 34 Chart 23: Residual Market Risks 35 7 New Products and Services Chart 24: Residual Market % of Total NJ Standard Premium 36 Legislative Activity 9 Chart 25: Distribution of Residual Market Risks 37 Financials 10 Chart 26: Top 10 Governing Classification Codes (PY 2017) By Number of Risks 38 Chart 27: Top 10 Governing Classification Codes (PY 2017) By Written Premium 39 Statewide Results Chart 28: Residual Market Average Premium Size 40 Chart 1: Premium Level Changes 12 Chart 29: Loss Ratios (All Losses) 41 Chart 2: Combined Ratio 13 Chart 3: Net Incurred Losses and Net Earned Premiums 14 Bureau Operations and Services Chart 4: Indemnity Severity and Medical Severity 15 Chart 30: Policy Coverage Inquiries 43 Chart 5: Frequency 16 Chart 31: Policy Documents Received 44 Chart 6: Weighted Annual Manual Rate Per $100 of Payroll 17 Chart 32: Retrospective Rating 45 Chart 7: Distribution of 2020 Manual Rates 18 Chart 33: Large Risk Large Deductible Program 46 Chart 8: Components Underlying Manual Rates 19 Chart 34: Test Audits 47 Chart 9: New Jersey Unemployment Rate 20 Chart 35: Classification Inspections 48 Chart 10: New Jersey Total Annual Wages (Private Industry) 21 Chart 36: Number of Ownership Determinations 49 Chart 11: Maximum Weekly Benefit 22 Chart 37: Experience Rating Activity 50 Chart 12: Top Ten Carriers or Groups by Written Premium (CY 2019) 23 Chart 38: Statistical Reporting Activity During 2019 51 Chart 13: New Jersey Workers Compensation Percentage of Indemnity & Medical Losses 24 Chart 14: Top 20 Part of Body Injuries (PY 2017) By Percent of Total Losses 25 Appendix Chart 15: Top 20 Part of Body Injuries (PY 2017) By Percent of Total Number of Claims 26 Table 1: Experience by Size – All Risks – Policy Year 2017 – 1st Report 53 Chart 16: Top 10 Class Codes in the Voluntary Market (PY 2017) By Payroll 27 Table 2: Experience Rating Results (most recent 25 years) 54 Chart 17: Top 10 Class Codes in the Voluntary Market (PY 2017) By Manual Premium 28 Table 3: Rate Level Changes 55 Chart 18: Distribution of Experience Rated Risks by Mod Size 2019 29 Table 4: Schedule “Z” Experience 56 Chart 19: Distribution of Risks Subject to Experience Rating by Premium Size 30 Table 5: Size of Risk Experience 57 Chart 20: Schedule Rating Adjustments 31 Table 6: Statistical Plan Experience – by Policy Year Report Level 58 Chart 21: Impact of Discounting Earned Premium 32 Table 7: Calendar Year 2019 Written Premium by Carrier or Group 59 Member Carriers 60 Authorized Self-Insured Employers 66 Employee Recognition 67 NJCRIB Executive Director’s Message During 2019, the Bureau implemented a number of initiatives that enhanced efficiency and improved the user experience for all New Jersey stakeholders. We made progress in “going green” in our effort to become a paperless office, but remained focused on our core mission: To utilize member data in an objective, non-partisan way in order to promote a stable marketplace both now and in the future. This objective is reflected in our new slogan: Data Driven. Forward Thinking. Our accomplishments in 2019 centered on how we can simplify and modernize the data we receive and process; how users can access our platforms quicker and more intuitively; and how to further reduce the use of paper in our industry.A partial list of achievements includes the following: • Release of Manage Data 2.0, which allows for the bulk upload and real-time processing of policy and statistical data; • Unveiling the online Construction Classification Premium Adjustment Program; • Elimination of paper submissions of policy and statistical data; • Creation of NJCRIB mobile app as another tool to find policy coverage records on file with the Bureau; • Development of the Workers Compensation Inquiry Portal, so that classification, audit and single entity ownership requests are submitted and responded to electronically; and • Release of WC Underwriting, so that members can view policy and underwriting information on multi-state risks. Visit our website for information about other changes coming soon. Statewide results for calendar year 2018 include a decrease in the combined ratio to 85.5%, which continues the pattern of reductions over the past six years. Standard earned premium increased 2.7% to $3.77 billion in calendar year 2018, largely attributable to a modest growth in payroll that helped offset a 5.1% rate decrease. On the other hand, total incurred losses dropped 6.5% to $1.74 billion. Given these results, rates decreased 5.8% effective January 1, 2020 – the fourth year in a row with a reduction and fifth without an increase. The residual market in New Jersey continued its relatively healthy pattern from recent years. The number of risks increased 4.3% in 2019, while the total premium decreased by 10.3%. Overall, the residual market remains stable and consistent with trends seen nationally. The Bureau continues to invest in technology and to reap the benefits of a dedicated, experienced team of employees. Our systems and platforms are evolving, yet personal service to all stakeholders remains our focus. We look forward to continuing our century-long history of service to the industry in the years to come. Paul G. Witko Executive Director 5 NJCRIB 2019-2020 TERM Committee Membership Governing Committee Audit Subcommittee Continental Casualty Company Continental Casualty Company Hartford Underwriters Insurance Company (Chair) New Jersey Manufacturers Insurance Company (Chair) New Jersey Manufacturers Insurance Company NorGuard Insurance Company Compensation Subcommittee Selective Insurance Company of America NorGuard Insurance Company Zurich American Insurance Company Selective Insurance Company of America Commissioner of Banking and Insurance (Ex-officio, Non-Voting) Zurich American Insurance Company (Chair) Actuarial Subcommittee Nominating Subcommittee American Home Assurance Company Chubb Insurance Group Hartford Accident and Indemnity Company Liberty Mutual Insurance Company (Chair) Liberty Mutual Insurance Company PMA Insurance Group New Jersey Manufacturers Insurance Company Selective Insurance Company of America (Chair) Travelers Indemnity Company 6 NJCRIB New Products and Services Manage Data 2.0 • Provides additional searches and analytics • Real time processing and feedback of policy and unit statistical data submissions WC Inquiry Portal • Easy to use single entity ownership submissions • Provides an online portal for submitting classification and inspection inquiries WC Underwriting 1.0 • Utilizes CDX single sign-on platform • A carrier can enter a NJTIN and retrieve basic policy information for experience rated risks New Construction Classification Premium Adjustment Program Platform • Streamlined application process • Eliminated hard copy submissions and provides immediate feedback/decision Upgraded the Policy Coverage Search at www.njcrib.com which resulted in • Improved performance speed regarding data returned • Improved returned results/listings which are closer to the requested search parameters • Deployed a mobile Policy Coverage Search App for iOS and Android smartphones 7 NJCRIB New Products and Services FIN-STAT Report Process • Carriers receive a report comparing reported aggregate financial data compare to unit statistical data • Identifies financial items out of tolerance related to standard earned premium, total indemnity and medical paid plus case and indemnity incurred claim counts Central Security (CSEC) 2.0 • Carrier Administrators have the ability to add, delete and edit their users without contacting the Bureau Eliminated Hardcopy Policy Documents • All new, renewal and change policies submitted electronically • Cancellation and reinstatements submitted electronically 8 NJCRIB Legislative Activity Supplemental Benefits