The Missouri Department of Commerce and Insurance is recommending a 1.6 percent decrease in workers’ compensation insurance loss costs for 2020. This marks the sixth year in a row that average workers’ compensation rates will decrease.
The 1.6 percent decrease in loss costs between Jan. 1, 2019, and Jan. 1, 2020, is driven by declining lost-time claim frequencies. Increasing average medical claim costs partially offset the decrease.
Prospective loss costs are intended to cover indemnity and medical payments for injured workers and some of the expenses associated with providing these benefits. Insurers use loss costs to set their workers’ comp rates.
Every year, the National Council on Compensation Insurance (NCCI), an industry-funded group, files advisory loss costs with the department. The department reviews the NCCI’s methodology and assumptions and develops its own recommended loss costs.
Under Missouri law, insurers may set their rates based on the NCCI’s recommendations, the department’s recommendations, or their own actuarial analysis. Insurers are not required to change their rates in 2020, regardless of the recommendations made.
Both the NCCI and the department propose an overall loss cost decrease of 1.6 percent for policies effective Jan. 1, 2020.
The NCCI’s proposed average changes in loss costs by industry group are shown below:
- Manufacturing: -0.7%
Office and Clerical: -1.6%
Goods and Services: -1.9%
The NCCI’s 2020 loss cost filing and the department’s independent actuarial review are available on the department’s website: https://insurance.mo.gov/consumers/wc/NCCI_filings.php.
Source: Missouri Department of Commerce and Insurance
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