The U.S. insurance industry is entering a period of transition where profitability, regulation, and customer trust all intersect in new ways. Workers’ compensation (WC) and general liability (GL) are at the heart of this shift, and accurate auditing of these lines is emerging as a key lever for carriers to protect and grow their businesses.
The National Council on Compensation Insurance’s 2025 Legislative and Regulatory Trends Report highlights the sheer scale of activity shaping WC. As of mid-2025, NCCI was monitoring 950 state and federal bills, including 592 in states where it provides ratemaking services, alongside 157 proposed regulations. Already, 164 bills have been enacted and 65 regulations adopted this year.
Hot topics range from mental injury coverage for first responders, to independent contractor rules, to the ongoing debate around marijuana reimbursement. Each new law adds complexity for carriers tasked with ensuring accurate classifications and premium calculations.
Meanwhile, S&P’s 2025 U.S. Property & Casualty Insurance Market Report shows that while the industry is enjoying a second year of underwriting profitability, margins are tightening. Specifically the workers’ compensation line is facing “a combination of incrementally higher rates of US unemployment, a sluggish domestic economy and downward rate pressure following several years of historically strong underwriting results will combine to create some significant headwinds.”
This dynamic – strong profitability but weak growth – creates a paradox for carriers. With rate decreases squeezing the top line, there is simply less margin for error when it comes to exposure reporting. Misclassifications, payroll underreporting, or lapses in regulatory compliance directly translate into lost premium and heightened risk.
Unlocking additional premium
Pro Global’s aggregated audit data shows just how much is at stake. Our audits for U.S. carriers over the past 18 months reveal that proactive WC and GL audits can unlock up to 18% in additional premium. That’s not an incremental benefit; it’s a transformative opportunity in an environment where even a one-point shift in combined ratio can move the needle for carrier profitability.
Beyond the numbers, proactive audits strengthen compliance, reduce disputes, and improve customer satisfaction by ensuring policyholders are billed fairly and transparently. They also enable carriers to demonstrate alignment with evolving state regulations – whether it’s adapting to new presumptions around mental health, or adjusting payroll classifications in the gig economy.
An immediate and effective strategy
Looking ahead to 2026, carriers face a narrowing runway. S&P projects slower compound annual growth rates across the sector, with P&C premiums growing at just 5.9% from 2024–2029 compared to 8.3% over the prior five years. For WC in particular, the favorable underwriting results of recent years set a high bar that could be difficult to maintain.
The message is clear: proactive and accurate WC and GL audits represent one of the most immediate and effective strategies for U.S. insurers to close the premium gap, protect margins, and build resilience in the face of regulatory complexity and slowing growth.
Further Reading: https://pro-global.com/pro-global-proactive-us-workers-compensation-and-general-liability-audits-unlock-up-to-18-additional-premium-for-insurers/
Meet our expert
Name: Robert Sherman
Job title: US Head of Audit & Advisory
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