Jefferson City, Mo. - The Missouri Department of Insurance is recommending a 3.0 percent decrease in workers’ compensation insurance loss costs for 2018, on top of a 4.0 percent decrease that took effect on August 1, 2017. This means that average workers’ compensation rates should decrease for the fourth year in a row.

The 4.0 percent decrease in loss costs between Jan. 1, 2017 and August 1, 2017 is associated with a court decision published by the Missouri Court of Appeals, Western District in February 2017. This decision postpones the shift of claims from the Second Injury Fund to employers and their insurance carriers.

The 3.0 percent decrease in loss costs between August 1, 2017 and Jan. 1, 2018 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.

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 3.0 percent for policies effective Jan. 1, 2018, relative to the loss costs that took effect on August 1, 2017.

The NCCI’s proposed average changes in loss costs by industry group are shown below:

Manufacturing: +1.0%
Contracting: -5.7%
Office and Clerical: -4.6%
Goods and Services: -2.1%
Miscellaneous: -4.6%

The NCCI’s 2018 loss cost filing and the department’s independent actuarial review are available on the department’s website.