Missouri Regulator Recommends 8.1% Workers’ Comp Rate Cut

Copyright 2009 A.M. Best Company, Inc.All Rights Reserved BestWire

December 30, 2009 Wednesday 02:03 PM EST

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Missouri Regulator Recommends 8.1% Workers' Comp Rate Cut

Sean P Carr

JEFFERSON CITY, Mo.

Missouri Insurance Commissioner John Huff is recommending an overall decrease in workers' compensation loss costs by 8.1% for 2010, approximately four times the rate trim recommended by the National Council on Compensation Insurance.

An 8.1% cut would reduce premiums for Missouri employers by up to $80 million, according to the Department of Insurance, Financial Institutions and Banking. The NCCI proposed an overall decrease of 1.9% from 2009 loss costs, effective Jan. 1, 2010. The department formulates its own recommendation after reviewing the NCCI filing and underlying claim and payroll data, according to a department announcement.

Under Missouri law, insurers and self-insurers are allowed to set their rates based either on the recommendations of the NCCI or of the department. Both the NCCI and the department make recommendations for general loss costs, as well as for specific industry groups, according to the department. It is the fourth consecutive year the department and NCCI have recommended loss cost decreases.

"In today's challenging economy, it's important that state government be a strong and effective partner with Missouri businesses to keep costs down," Huff said in a statement.

In 2008, 25 new workers' compensation insurers entered the Missouri market, Huff said; 256 companies are currently writing coverage in the state. The frequency of on-the-job injuries is down 60% over the past 15 years, Huff said.

According to a recent A.M. Best Statistical Study, the top 25 U.S. writers of workers' compensation insurance saw an average 15% fall in direct premiums written, slightly worse than the 14.4% recorded for all workers' compensation insurers. The A.M. Best Special Report, "Workers' Compensation: How Bad Will It Get?" predicted the cumulative impact of the economic downturn, challenging market conditions, increasing loss cost trends and other factors to continue impacting the line through 2009 and into 2010 (BestWire, Sept. 14, 2009).

The top five writers of workers' compensation insurance in Missouri in 2008, according to BestLink, were: Missouri Employers Mutual Insurance Co., with a 14.5% market share; Liberty Mutual Insurance Cos., 11.8%; American International Group, 11.6%; Travelers Group; 8.8%; and Hartford Insurance Group, 5.6%.

(By Sean P. Carr, Washington Correspondent: [email protected])

December 31, 2009

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