In a market where workers’ compensation pricing is softening, the real challenge for carriers isn’t just winning business, it’s doing so without losing discipline. Because while competitive pressures can tempt insurers to chase premium, long-term performance still hinges on fundamentals.
In a recent interview with Insurance Business, Berkshire Hathaway GUARD's Vice President of Workers' Compensation Becky Barnette revealed that the carriers that really do well in this cyclical market are the ones who never forget the basics because, at its core, underwriting discipline remains anchored to the structure of the product itself.
“The basic foundation of the workers' compensation rating system is simple,” Barnette told IB. “Rates are driven by state specific loss costs, benefits structure, and the loss activity occurring in that jurisdiction.”
From there, differentiation comes down to how well a carrier evaluates risk at the individual account level by measuring operations, wages, financial activity, and safety practices against the expected performance of that class.
“We ask, how does the individual risk compare against the average?” Barnette explained. “That’s how we understand how it’s likely to perform over the long run.”
Even disciplined underwriting has limits, particularly as loss volatility increases. Nowhere is that more evident than in California, where cumulative trauma claims are becoming more expensive to resolve.
“Cumulative trauma claims in California have increased significantly,” Barnette said noting that many of the cost drivers including Independent Medical Examinations (IMEs) and related services fall outside fee schedules. “Those components can be quite expensive, and everyone is struggling to manage them.”
With indicated increases outpacing approved rate changes, carriers are being forced to navigate widening pricing gaps while maintaining profitability.
For brokers and agents, speed remains critical in workers comp. The question is how to deliver it without sacrificing quality and the answer increasingly lies in thoughtful automation.
“Automation of underwriting is key,” added Barnette. “But there has to be a balance between automation and human intervention.”
GUARD’s approach focuses on automating scalable, main-street-type classes while more complex risks still require human review. And when they do, response time remains a priority.
“Our underwriting team of more than 100 underwriters stands ready, responding within hours,” added Barnette. “AI and other tools are helping underwriters move faster by quickly pulling information that once had to be gathered manually and allowing us to get to ‘yes’ more quickly, which matters most to agents.”
What’s more, GUARD is shifting select main-street classes with premiums up to $50,000 to full automation, streamlining placement while ensuring risk alignment.
This growth doesn’t have to mean taking on more risk, not if the infrastructure is strong. As Barnette told IB,
“At GUARD, we understand risk and we identify that risk when it comes in the door,” she added. “Our appetite can be expanded because of what we do beyond underwriting. Excellent claims handling and robust loss control support allow us to surround that risk with the services needed to help reduce long-term loss ratio concerns.”
Pricing remains closely tied to predictability by class, with higher-hazard operations priced accordingly. From there, claims and loss control resources are deployed to support performance over time, with manual underwriting applied when and where necessary.
A core part of GUARD’s unique offering is its innovative use of technology seen specifically in its 60-second appetite check, an NAICS-based mapping tool that shows agents, in seconds, what lines of business GUARD will write.
“It's not easy when you're evaluating appetite across multiple lines” added Barnette. “Each line of business has its own classification system and coverage basis, which creates a wide range of variables to consider. At GUARD, we've carefully mapped each line of business to the right NAICS 6 NAICS 4 and NAICS 2 code, depending on what level is appropriate for the line of business.”
That investment, she said, creates clarity earlier in the process and will eventually flow directly into applications to reduce friction for agents.
If underwriting sets the expectation, claims handling ultimately defines the experience. And in workers’ compensation, those first few days after a loss are critical.
“You can't fix poor claims handling with underwriting,” added Barnette. “And you cannot be in the work comp business if you don't have a great claims organization.”
At GUARD, insureds can expect contact with all parties within the first 24 to 72 hours of a loss, ensuring clarity from the outset. Specialized units, including nurse case management, early intervention teams, and SIU support more complex claims, while education and prevention remain a priority for small businesses.
And at GUARD, the team deploys training libraries, ergonomic assessments and facility audits to help reduce claims before they even happen, which is particularly helpful for smaller businesses.
“Small insureds are busy running their businesses,” Barnette said. “We try to meet them where they are making resources available while bringing in human expertise when risk indicators suggest it’s needed.”
In a cyclical market such as workers comp, financial stability matters. With Berkshire Hathaway’s backing, GUARD customers can be confident in the company’s long-term commitment.
“We've seen many carriers exit the market over time”, she said. “At GUARD, we want our customers to understand that we’re going to be there for them because when you have a carrier with strong financial strength, we’re not going anywhere.”
That stability extends to flexible payment plans, audit feedback loops that inform underwriting, and credits that reward strong safety practices reinforcing a long-term- view of risk and partnership.
“It’s a partnership,” added Barnette. “We want our customers to know that we’ll be there when they need us.”
This article was created in partnership with Berkshire Hathaway GUARD.
