In industry news:

NCCI released its Quarterly Economics Briefing Newsletter. According to NCCI’s predictions, the P&C industry’s investment performance should be positively affected as long-term interest rates begin to rise next year. Also, according to preliminary estimates, wages increased by 3.1 percent during 2014, just above the average annual 2.9 percent rate of growth from 2010 to 2012. However, medical inflation is expected to accelerate this year and next: 2.7 percent in 2015 (down from 2.9 percent last quarter) and 3.4 percent in 2016.

NCCI states overall, “As employment levels continue to increase and the labor market tightens, wage growth can be expected to accelerate, indicating that the economy is getting closer to full employment. However, if the economy is further away from the natural rate of unemployment than currently thought, it could take longer before wage gains are realized. When wages do start to rise, they will cause both workers’ compensation losses and premiums to increase. Frequency may rise as marginally attached workers reenter the labor market, since newly employed workers with less tenure on the job have higher accident rates.”

Read the full quarterly report from NCCI here.

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