Mo. Sees 2002 Workers’ Comp Rate Hikes in Private Market

Missouri workers’ compensation rates for most businesses have risen an average of 6.7 percent this year, based on data through mid-June, according to the Missouri Department of Insurance. Filings with that agency show 56 companies have implemented rate reductions averaging 3.1 percent so far this year while another 157 increased rates 10.3 percent.

Overall, current rates in Missouri still are 15.5 percent below the levels charged Jan. 1, 1994, when the state deregulated pricing, even without adjusting for eight years of inflation. Rates steadily went down until the fall of 2000. In 2001, rates rose an average of 2.8 percent.

Workers’ compensation has emerged as an area of relatively stable pricing compared to other areas of commercial insurance, which has been afflicted by rate increases that in some cases reached high double digits.

Commercial insurance pricing has been affected by a declining stock market that eliminated the cushion for aggressive pricing common in the 1990s, increases in losses in some lines of insurance and, to a lesser extent, uncertainty and reinsurance troubles after the World Trade Center disaster.

Missouri law has prohibited insurers from dropping coverage for workers who risk injury because of terrorism attacks, but few have withdrawn from Missouri. Today, 300 workers’ comp insurance companies still show financial activity in the state.