The workers compensation market in Missouri and the surrounding Midwest remains strong, showing impressive stability over the past decade. However, economic factors on the horizon could create challenges. Producers should be prepared to discuss these topics with their clients. 

Check out the video below, in which Roger Walleck, President and CEO of MEM, shares insights into the current state of the market and what businesses should be watching closely. As Missouri’s leading provider of workers’ compensation insurance, MEM deeply understands the trends shaping the industry. Producers can leverage this knowledge to guide policyholders in making informed decisions that protect their workforce and financial stability. 

A competitive and thriving market 

The work comp industry has maintained a solid combined ratio of around 90% for ten years. This indicates a financially sound market that remains highly competitive. Missouri is a prime example, with over 100 insurance groups and 340 underwriting companies actively writing work comp policies. The market has expanded significantly, from $900 million to over $1 billion in voluntary premiums. 

This growth has also attracted new competition. Carriers traditionally focused on personal line insurance are now entering the work comp space. They are seeking diversification away from other regional risks. For example, catastrophic wildfires and large legal verdicts affecting auto insurance. As a result, producers now have more options for clients.  

Economic pressures on the horizon 

Despite the market’s current strength, several economic factors could influence its stability in the coming years. Inflation has been a looming concern. Recent data suggests its impact is becoming more apparent. 

While the Consumer Price Index (CPI) rose by 6.3% in February 2025, a deeper dive into consumer spending habits reveals a concerning trend: spending on discretionary services like dining out and travel has declined. Since the service industry makes up a large portion of the U.S. economy, reduced spending in this sector could lead to lower employment rates. 

This presents a challenge for the work comp industry. Premiums are based on payroll. If businesses have fewer employees, payrolls will shrink, leading to a decline in premium revenue. For producers, this could mean policyholders need to reevaluate their coverage needs or anticipate changes in premiums. 

MEM’s perspective on inflation and medical costs 

Inflation also affects medical costs, a major driver of work comp claims. If payroll-based premium growth slows while medical expenses rise, then the industry could see increased pressure on its combined ratio. This scenario often results in rising insurance rates to compensate for the financial imbalance. 

Now is the time to help clients prepare. Employers should know potential cost increases and explore ways to control losses through safety initiatives, return-to-work programs, and strategic policy management.  

At MEM, we closely monitor these economic factors and their impact on our policyholders. Our team continuously analyzes industry reports and market data to ensure we remain proactive in helping businesses manage their work comp risks. 

How to use this information 

Industry organizations such as the National Council on Compensation Insurance (NCCI) and state insurance departments provide valuable insights through regular reports on market trends and cost drivers. MEM actively uses these resources to guide our strategies and support our policyholders with expert insights and proactive risk management solutions. Producers can use these insights to: 

  • Educate clients about potential cost increases and strategies to mitigate them. 
  • Differentiate MEM’s expertise and proactive approach in the marketplace. 
  • Help policyholders improve workplace safety and risk management to keep costs under control. 
  • Ensure businesses are prepared for economic shifts impacting their work comp coverage. 

While the work comp market in Missouri and the Midwest is strong, economic uncertainties require ongoing vigilance. Inflation, payroll fluctuations, and medical cost trends will all shape the industry’s future. By partnering with MEM, producers can provide clients with the insights and strategies needed to navigate these challenges while maintaining a strong, stable workforce.