JEFFERSON CITY, Mo. – The Missouri Department of Insurance is recommending a 3.5 percent decrease in workers’ compensation insurance loss costs for 2019. This marks the fifth year in a row that average workers’ compensation rates will decrease.
The 3.5 percent decrease in loss costs between August 1, 2018 and January 1, 2019 is driven by declining lost-time claim frequencies combined with stable average claim costs.
“Missouri’s lost-time claim frequency has fallen since 2010, and average claim costs have stayed steady for the past several years,” said Department of Insurance Director Chlora Lindley-Myers. “This improvement in experience is driving the decrease in loss costs. Missouri’s workers’ compensation insurance market is competitive, with over 300 insurers actively writing policies. I encourage employers to shop around, get quotes, and take advantage of the best deal possible. The department provides an online rate checker to assist employers in doing this comparison shopping.”
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 of Insurance. 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 2018, regardless of the recommendations made.
Both the NCCI and the department propose an overall loss cost decrease of 3.5 percent for policies effective January 1, 2019.
The NCCI’s proposed average changes in loss costs by industry group are shown below:
Manufacturing: -2.4%
Contracting: -6.3%
Office and Clerical: -3.7%
Goods and Services: -4.2%
Miscellaneous: -0.2%
The NCCI’s 2018 loss cost filing and the department’s independent actuarial review are available on the department’s website.