New Frontiers in Workers’ Compensation

The workers’ compensation industry is populated by a wide range of services and technology vendors—the subject of this report—that provide administrative, claims management, medical management, and other services designed to improve injured worker experiences and outcomes, contain costs, and reduce administrative burden. The industry has been shaped by decades of investor-driven M&A. This has enabled increasingly sophisticated organizations to create value across more of the claim lifecycle, while establishing regional and national service footprints over time.

Although the workers’ compensation industry is sometimes maligned as technologically backward or slow-moving, we think this belies the opportunity. Smart investing in workers’ compensation today requires answering two fundamental questions:

• What is the best way to underwrite company growth in an industry that has already undergone significant consolidation? This requires consideration of both consolidation and insourcing-outsourcing dynamics, as well as an understanding of how clinical and administrative solutions are evolving to meet changing claim characteristics and stakeholder behaviors.
• What is the best way to underwrite disruption or innovation in an industry that has historically resisted change? To answer this question, we evaluate current and emerging applications of AI and data analysis in the workers’ compensation industry, and ask what characteristics predict a company’s ability to gain a competitive advantage.

This report analyzes the current shape of the workers’ compensation industry and how it came to be, and asks where the industry could move next. The report begins with an overview of current market, claim, and insourcing and outsourcing dynamics. Next, we discuss technology and AI innovation in workers’ compensation—one of the key drivers of market opportunity both for emerging players and incumbents. We follow with highlights of some additional themes where we foresee market evolution in the coming years. Finally, the last two chapters review the claim lifecycle and major market segments, including analysis of vendor differentiation and M&A trends in each segment.

Download a preview of the report by filling out the form. Please contact us to request the full report, including Bailey’s market map of the workers’ compensation sector.