Rates for workers’ compensation insurance continue to decrease in Louisiana based on a recent report from the National Council on Compensation Insurance (NCCI), according to Louisiana Commissioner of Insurance Jim Donelon.
NCCI analyzes workers’ compensation rates in 35 states.
Most workers’ comp carriers in Louisiana use the NCCI annual loss cost filing report to help formulate their insurance rates. A recent NCCI loss cost filing showed Louisiana with a 4.3 percent drop in loss costs, which was approved by the Department of Insurance and was effective May 1, 2010.
This reduction marks an overall drop of 40 percent in rates since 2005.
Companies have begun adopting the new rates from around late March through September 2010. They begin using the lower rates within approximately 45 days after approval of the adoption by the Department of Insurance.
This reduction follows a 17.4 percent decrease in workers’ comp rates in 2009, an 8.6 percent reduction in 2008 and a 15.8 percent reduction in 2007. Louisiana has had the second highest reduction of the 35 states NCCI analyzes since 2006.
“The continued reduction in the cost of workers’ compensation insurance is good news for our state’s business community as businesses struggle faced with the national economic recession, the current oil spill disaster in the Gulf, and our state’s continued recovery efforts from the devastating hurricanes of 2005 and 2008,” said Donelon. “Our workers’ compensation insurance market continues to show strong signs of improvement, particularly in the area of improved worker safety.”
Donelon notes that improved worker safety leads to fewer workplace injuries across most employment classes, a trend we have seen over the past few years and the leading cause of these recent rate reductions.
The Louisiana Workers’ Compensation Corp. (LWCC) recently announced it is dropping its rates by 4.1 percent, as of Oct. 1, a similar drop to today’s announced rate reduction.
The total Louisiana workers’ compensation market is estimated to be $900 million per year in premium.
According to the Department of Insurance the top five writers of workers’ compensation insurance in Louisiana in 2009 were: LWCC with 24.4 percent; Liberty Mutual Group with 15.2 percent; LUBA Casualty Insurance Co. with 10 percent; American International Group with 8.8 percent; and Zurich Group with 6.4 percent.
Source: Louisiana Department of Insurance
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