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State Recommends 7.7 Percent Decrease In Workers’ Compensation Loss Costs For 2022

The Missouri Department of Commerce and Insurance is recommending a 7.7 percent decrease in workers’ compensation insurance loss costs for 2022. This marks the largest overall decrease since 2009.

Department of Commerce and Insurance Director Chlora Lindley-Myers says loss costs are decreasing significantly for 2022, due to the continued decline in loss-time claim frequency as a result of safer work places and improved risk management. She also says for the first time since 2013, there has been a decrease in the average medical cost per lost-time claim. The Missouri Workers Compensation Insurance Market includes 371 carriers currently offering coverage within the state.

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’ compensation insurance rates. Every year, the National Council on Compensation Insurance (NCCI), an industry-funded group, files advisory loss costs with the department. 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 2022, regardless of the recommendations made.

Both the NCCI and the department propose an overall loss cost decrease of 7.7 percent for policies effective Jan. 1, 2022.

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