Louisiana Worker’s Comp Market ‘Remains Competitive’

In its annual report to the Legislature for 2014-2015, the Louisiana Property & Casualty Insurance Commission noted that the workers’ compensation market in the state “remains competitive.” There were 246 insurance companies providing workers’ compensation insurance in Louisiana in 2014, according to the state insurance department.

Beginning on May 1, 2015, workers’ comp insurance rates declined by 2.4 percent in Louisiana. Commissioner of Insurance Jim Donelon approved the new rate in late December 2014 based on workers’ compensation loss costs submitted by the National Council on Compensation Insurance (NCCI). Most workers’ compensation carriers in Louisiana use the NCCI annual loss cost filing to formulate their insurance rates.

This loss cost reduction marks a cumulative drop of 37 percent since 2006 and a 56 percent drop since 1995, according to the Louisiana Department of Insurance. Workers’ comp rates declined by 5.2 percent in 2014 after three consecutive years of rate increases — 4.2 percent in 2011, 6.0 percent in 2012 and 2.5 percent in 2013.

The Louisiana Workforce Commission (LWC) has reported that private sector employers in the state have been successful in reducing work-related injuries. In 2013 the rate of non-fatal work-related injuries and illnesses, improved to an estimated 2.2 incidents per 100 full-time workers, down from 2.3 the previous year. The national average was 3.3.

A study published earlier this year by the Cambridge, Mass.-based Workers Compensation Research Institute (WCRI) found costs per workers’ compensation claim in Louisiana changed little from 2011 to 2013 — a flattening that followed three years of 5 percent annual growth.

The WCRI study, CompScope Benchmarks for Louisiana, 15th Edition, found the state’s average cost per claim remained higher than in most of the 17 states WCRI studied. All cost components — indemnity, medical and expenses — were higher than average.

Even though the workers’ weekly benefits were capped at lower levels in Louisiana than in other states, indemnity costs per claim were higher in Louisiana because the average duration of temporary disability — 31 weeks — was eight to 15 weeks longer than in other states with a wage-loss benefit system.

Indemnity benefits per claim with more than seven days of lost time were 38 percent higher than the typical study state, partly due to the longer duration of temporary disability. Lump-sum settlements also drove indemnity costs higher.

Medical costs per claim were also among the highest of the states studied.

From 2008 to 2013, wages of injured workers grew more in Louisiana than in some of the WCRI’s study states.