It is the twentieth year that the state has seen a reduction.
The National Council on Compensation Insurance (NCCI) has proposed a 9.1% reduction in West Virginia’s workers’ compensation loss expenses, according to a statement from Gov. Jim Justice’s office.
The recommended reduction would apply to all standard classifications, with a 10.4% drop proposed for the assigned risk market. Loss costs are used as a baseline variable to calculate workers’ compensation premiums for firms.
According to AM Best, this suggestion represents the 20th consecutive year in which West Virginia’s baseline workers’ compensation rates have been reduced. The planned rate decreases are estimated to reduce business insurance expenses by about $15 million.
West Virginia Insurance Commissioner Allan L McVey cited a decline in claims costs as a primary factor behind the continued decrease in rates.
McVey noted that the state’s average cost per claim has consistently been lower than both national and regional averages, with losses declining by more than 20% between 2018 and 2022.
McVey also pointed to the strong performance of West Virginia’s economy and rising wages as contributing factors. As wages have grown, premiums have been lifted even as losses have decreased, indicating to ratemakers that there is room for premiums to be reduced.
The governor’s statement also cited the privatisation of the workers’ compensation market as a major source of cost savings. West Virginia passed legislation in 2005 to transition to a private market, and the first private carriers began writing workers’ compensation coverage in 2008. Since then, businesses across the state have saved an estimated $481 million.
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