Actuaries for the Workers’ Compensation Insurance Rating Bureau and its carrier members completed their review of the industry’s most recent experience. The upcoming rate filing reflects that the data show a sharp increase in the projected loss ratio. Coupled with Insurance Commissioner Ricardo Lara’s decision last year to order another cut instead of approving the requested 0.9% bump in rates, the increase in the projected loss ratio for the 2025 filing is nearing double digits.
A few mitigating factors, including a projected wage inflation rate of over 4%, will offset some of the projected increase in workers’ comp rates. Medical costs and loss adjustment expenses have also risen sharply over the past year.
The actuarial committee adopted methodologies for trending and loss development that WCRIB staff has developed. Staff will formally recommend the amount of the September 1, 2025, rate increase to the Bureau’s governing committee at a meeting next week. The governing committee will decide on how big of an increase to seek.
The Bureau is a private organization with quasi-governmental responsibility. It is financially supported exclusively by insurance carriers in whose interests it operates.
WCIRB staff noted that the projected loss ratio for the September 1, 2024, advisory pure premium rate filing was 74.6%. Updating the projection with the latest claims experience and a higher medical severity trend boosts the projected loss ratio to 83.5%. The accompanying chart details the components of the 9% increase in the projected loss ratio.
Workers’ Comp Executive will provide detailed coverage of the actuarial data and upcoming meetings for premium subscribers.
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