Multi-Bureau Study on the Historical Patterns of Mega Claims

Understanding Long-Term Patterns in Workers’ Compensation Mega Claims:

Mega claims—very large workers’ compensation claims with exceptionally high costs—play an outsized role in system volatility despite occurring infrequently. To address stakeholder questions about the frequency, severity, and timing of these claims, ten workers’ compensation rating bureaus collaborated on a countrywide analysis spanning more than two decades of claim experience.

This research series examines historical patterns in mega claims across accident years 2001–2021, including how often they occur, how quickly they emerge, and how their characteristics vary by industry, injury type, and jurisdiction. Together, the reports provide a national framework for understanding the evolving impact of mega claims on the workers’ compensation system and support informed decision-making by carriers, regulators, and other system stakeholders.

COUNTRYWIDE MEGA CLAIMS REPORT 2024

Mega claims continue to raise important questions for the workers’ compensation system due to their outsized impact on total loss costs. Building on the original 2020 countrywide study, this updated analysis extends the review through accident year 2021 and incorporates enhanced data, updated cost levels, and additional analytical perspectives.

Developed collaboratively by ten rating bureaus, the 2024 report examines claims exceeding $2 million in incurred losses and evaluates how patterns of frequency, severity, and recognition have evolved over time. By expanding both the time horizon and level of detail, the study provides stakeholders with a clearer national view of how mega claims are emerging, how quickly they are identified, and how their impact varies across industries and injury characteristics.

What is in the report

• Mega claims remain a very small share of total indemnity claims but continue to account for a growing share of loss dollars.
• Since 2013, the estimated ultimate frequency of mega claims has increased, particularly when measured against declining overall claim counts.
• Construction, motor vehicle injuries, and head and brain injuries continue to drive the most severe losses.

COUNTRYWIDE MEGA CLAIMS REPORT 2020

This inaugural countrywide study examines long-term patterns in workers’ compensation mega claims—defined as claims exceeding $3 million in incurred losses—across multiple jurisdictions. Developed in response to stakeholder questions about the growth and impact of very large claims, the analysis brings together data from ten rating bureaus to provide a national perspective. The report explores whether mega claims are becoming more common, how quickly they are identified, and which industries and injury types are most associated with extreme severity.

What is in the report

• Mega claims occur infrequently but contribute between $1 billion and $2 billion in losses each year nationwide.
• After declining during the Great Recession, the share of mega claims increased steadily beginning in 2013.
• Construction accounts for a disproportionately large share of mega claims relative to its share of total claims.