Workers comp insurance rates decrease yet another year

Delaware workers’ compensation insurance rates will decrease for the sixth year in a row, effective December 1, 2022. Both the voluntary market and the residual market will see rate decreases in the double digits. The Delaware Department of Insurance has determined that the average single premium enterprise loss ratio is 81 percent, as new data continues coming in and claims continue to be settled. The downward trend started at 82.4 percent in 2018, and has decreased every year since.

Shifts in industry loss cost trends, along with enhancements rating models, are reflected in the proposed rates.  The decrease to residual market rates of 16.14% is primarily driven by the decline in work at home claims and voluntary market loss costs of 10.96%. Residual market rate drops are also attributable to a decline in workers’ compensation claims per $10,000 of premium on average voluntary market policies. As much as rates appear to be dropping during the current year, an even greater decrease in voluntary market loss costs (20.02%) and residual market rates (20.10%) were observed.

What these rate reductions mean is that Workers Compensation will be paying out less to injured workers in the future. This could have a significant impact on the injured worker’s income, both in the immediate aftermath of their accident and over time through future wage losses and medical expenses. The impact of these reductions can be mitigated by policies such as waiting periods or increases to age limits where applicable.

References:

https://www.insurancejournal.com/news/east/2022/10/18/690617.htm