As the workers' compensation line continues to experience poor underwriting results and strong momentum toward rate increases, more companies are turning toward forming captives to combat rising costs, a Marsh executive says.

Speaking yesterday during a Webinar to discuss the Marsh Global Insurance Market Quarterly Briefing, Jonathan Zaffino, leader of Marsh's U.S. Casualty Practice, noted that workers' comp remains one of the few casualty lines still experiencing a significant pull on rates. This line, he notes, "has experienced another difficult year in 2011" with a combined ratio of 115, the worst seen since 2001, and the third straight year the line has led all commercial lines with the highest combined ratio.

Indemnity and medical costs continue to rise, he adds, and this, along with poor investment earnings, "leads to a relatively bleak picture" for workers' comp, says Zaffino.