Connecticut Approves 6% Workers’ Compensation Rate Decrease for 2025

The trend of decreasing rates in Connecticut workers’ compensation insurance will continue as the state’s insurance regulator has approved an industry proposed 6% rate decrease beginning January 1, 2025.

The now-approved rate filing submitted by the industry’s National Council on Compensation Insurance (NCCI) in September calls for a decrease of 6.1% to the voluntary market loss costs and a decrease of 6.2% in assigned risk plan rates.

This becomes the eleventh consecutive year that the Connecticut Insurance Department has approved rate decreases beginning January 1 for employers, reflecting a continued decline in workplace injuries and filed claims.

Insurance Commissioner Andrew N. Mais said that with a decade of decreasing rates, employers in the state have saved more than $400 million in reduced premiums.

The NCCI recommendations for 2025 are based on premium and loss experience as of year-end 2023 from policy years 2021 and 2022 and show improved experience relative to the organization’s 2024 rate filing, which also recommended decreases.

According to NCCI’s filing, Connecticut’s lost-time claims saw a moderate decrease in the latest year, continuing what NCCI says has been a long-term trend. Despite a small increase for the medical loss ratio in the most recent policy year, NCCI said it expects the long-term pattern of decline in the medical loss ratios, as well as the indemnity loss ratios, to continue in 2025.

The approved changes in voluntary market loss costs for 2025 by industry group are: Manufacturing -8.0%; Contracting -6.9%; Office & Clerical -5.6%; Goods & Services -5.2%; and Miscellaneous -5.7%.

The proposed change to the assigned risk rates for 2025 reflects a decrease to assigned risk expenses and an increase to the assigned risk differential, NCCI said.

The approved changes in assigned risk market rates by industry group are: Manufacturing -8.1%; Contracting -7.0%; Office & Clerical -5.7%; Goods & Services -5.3%; and Miscellaneous -5.8%.

Each workers compensation insurer must add other costs including commissions and taxes to the approved loss costs to compute the final workers’ compensation rates it intends to charge.

Employers unable to obtain coverage in the voluntary market can apply for coverage in the assigned risk market.

The 2025 decreases continue the downward trend of recent years. For 2024, NCCI recommended and the insurance department approved an overall 9.8% reduction in loss costs in the voluntary market and a 10.5% overall reduction in the assigned risk market. For 2023, the state allowed NCCI’s proposed overall average change of -3.0% to the voluntary loss costs and no change to the 2023 assigned risk rate level. In 2022, voluntary loss costs went down 14.1%, while assigned risk rates fell 8.2%, upon NCCI’s recommendation.

Countrywide, NCCI reported that the calendar year 2023 combined ratio for workers’ compensation was 86%, a sign of underwriting profitability, where the net written premium increased by 1%. Frequency has continued its long-term decline, while claim severity changes were moderate for 2023.