Fewer workplace injuries and less severe ones will result in lower Louisiana worker’s compensation insurance rates in 2015, the second year in a row and the seventh time in 10 years that rates have fallen.
The 2.4 percent decrease in worker’s compensation loss costs, or claim expenses, will be effective May 1, according to the state Department of Insurance.
The National Council on Compensation Insurance, a national organization that analyzes worker’s compensation data and files loss costs or rates in 35 states, asked for the rate cut.
Most worker’s compensation carriers in Louisiana use the NCCI annual loss cost filing to formulate their insurance rates, according to the Insurance Department. This loss cost reduction marks a cumulative drop of 37 percent since 2006 and a 56 percent drop since 1995.
“Companies today are paying half as much for the same coverage as they were 20 years ago and about one-third as much as they were paying just 10 years ago,” said Insurance Commissioner Jim Donelon. Businesses are seeking fewer and less severe workplace injuries claims.
In 2014, Donelon approved a 5.1 percent decrease in worker’s comp loss costs.
Although Louisiana Workers Compensation Corp. doesn’t base its rates on NCCI data, Kristin Wall, president and chief executive officer, said fewer people are being injured at the workplace. LWCC is also reducing rates — 7.7 percent on Jan. 1.
Last week, the Occupational Safety and Health Administration reported that Louisiana had the second-best rate of work-related illness and injury in the country in 2013, and well below the national average.
“I think it’s really about the number of claims because the cost of claims continues to increase and is quite high,” Wall said.
Wall said a number of factors have contributed, including:
OSHA’s regulations, and penalties, have pushed businesses to reduce accidents.
Technology’s impact on the workforce. For example, logging used to involve more people using chainsaws and now much of that work is automated, which is far less dangerous.
A down economy. Worker’s compensation is driven by the economy, Wall said. The current “jobless recovery” means that fewer young people, who studies show are far more likely to be injured, are in the workplace. Older, experienced workers have fewer accidents, she said.