For many organizations, injury rates are trending in the right direction — down. But the good news stops there. While claim frequency has dropped, the cost per claim continues to rise, often outpacing wage growth and inflation. For employers and risk managers, that shift has real consequences: higher reserves, longer absences, and increased scrutiny from finance and leadership teams.

Why Severity Is Rising

Recent data from the Workers Compensation Research Institute (WCRI) shows total claim costs increasing 2–14% annually across most states between 2021 and 2023. In 2024, both indemnity and medical severity rose roughly 6%, faster than wages.

So what’s driving these higher costs?

  • Medical inflation: Even routine procedures and medications cost more each year.
  • Longer recovery times: Older employees and those with pre-existing conditions take longer to return to full duty.
  • Complex claims: Psychological overlay, comorbidities, and litigation are increasingly common.
  • Expanded compensability: Broader state statutes and presumptions add new categories of covered injuries.

Together, these trends mean each claim that does occur is more likely to be severe, expensive, and time-consuming.

What This Means for Risk Managers and HR

Rising severity isn’t just an insurance issue, it’s an operational one. Employers now need stronger visibility into claim trends and faster intervention strategies to control costs. Here’s where to start:

1. Audit your claim data, not just your claim count.
Track metrics like average cost per claim, lost time duration, litigation rate, and medical spend by injury type. Trends reveal where prevention and education will have the biggest payoff.

2. Prioritize early reporting and triage.
Every day of delay adds cost. Claims reported within 24 hours are typically 25–30% less expensive than those reported later.

3. Engage supervisors and HR in return-to-work.
Encourage flexible duties or transitional programs that keep employees engaged and reduce indemnity duration.

4. Leverage nurse case management.
A proactive nurse partner can accelerate care decisions, avoid unnecessary procedures, and help employees feel supported through recovery.

5. Collaborate closely with your TPA.
Your TPA should provide regular claim reviews, analytics, and strategy sessions, not just process paperwork.

How Athens Administrators Helps Clients Stay Ahead

At Athens, we help organizations identify and manage severity drivers early. Our approach blends data analysis, medical expertise, and hands-on claims management to reduce overall costs and improve outcomes.

  • We monitor medical costs and provider performance to ensure quality, not quantity, of care.
  • Our claims examiners maintain direct communication with employers and injured employees, shortening resolution time.
  • Through our Return-to-Work and Nurse Concierge programs, we help employees recover faster and return safely, minimizing indemnity exposure.
  • Our reporting tools highlight cost drivers and emerging risks, so leaders can act before trends escalate.

Whether you manage risk for a large corporation, small business, or public organization, Athens partners with you to balance cost control and employee care, a key factor in reducing claim severity over time.

The declining number of workplace injuries is a positive trend, but the growing cost of each claim demands renewed attention. Employers who focus on early engagement, strong analytics, and the right TPA partnership will be better positioned to contain costs and protect their workforce.