Great News! Florida’s Workers’ Compensation Insurance Rates Decreasing in 2022
Florida employers will have one more thing to be happy about in 2022. Workers’ compensation insurance premiums are going down…again. The Office of Insurance Regulation approved an overall average statewide decrease of 4.9 percent for workers’ compensation premiums in Florida. The rate decrease applies to new and renewal policies beginning January 1, 2022. This is the fifth consecutive year that rates have gone down in Florida.
The rate reduction was proposed by the National Council on Compensation Insurance (NCCI), a rating organization authorized to make rate filings on behalf of workers’ compensation insurance companies in Florida. According to NCCI, the workers’ compensation system continues to experience unprecedented results due to a combination of underwriting discipline, declining frequency, moderating severity and adequate reserves.
NCCI states that claims frequency has generally continued a decades-long downward course driven by technology, safer workplaces, improved risk management and a long-term shift from manufacturing to service sectors. Recent data show that frequency also decreased because of indirect pandemic-related effects. Once the proposed overall average rate level change is determined, NCCI separately determines rates for each workers compensation classification code using class-specific data.
It’s worth noting that explicit adjustments for the potential impact of a pandemic were not included in NCCI’s rate filing. After extensive analysis of how to best reflect pandemics in future rate filings, NCCI determined that a catastrophe provision is the most appropriate way to reflect exposure to future pandemics. As a result, NCCI proposed a Catastrophe (other than Certified Acts of Terrorism) provision, for any single event or peril resulting in workers compensation losses in excess of $50 million nationwide (which may include pandemics). Although NCCI withdrew this proposal, it has plans to resubmit it to the Florida Office of Insurance Regulation at a future date.The Human Equation prepares all risk management and insurance content with the professional guidance of Setnor Byer Insurance & Risk.