The New Hampshire Insurance Department (NHID) reports that it has approved a workers’ compensation rate proposal that will reduce voluntary loss costs by 5.6% on average.

The new lower rates will apply to voluntary market policies effective on or after January 1, 2025.

The market has now experienced loss cost decreases for 13 consecutive years, with a cumulative reduction exceeding 65% over this period. The state’s voluntary loss costs went down 14% on average in 2024, down 7% in 2023, and for 2022, they were down 8%.

Loss costs are the portion of an employer’s insurance premium dedicated to covering claims costs. Insurers are required to use the new loss costs and are then permitted to adjust it for their own company expenses.

The rate proposal for 2025 was filed on July 31 by the National Council on Compensation Insurance (NCCI), the advisory agent that prepares workers’ compensation rate filings for New Hampshire and many other states.

The filing is based on premium and loss experience as of year-end 2023 from policy years 2020, 2021, and 2022 and shows improved experienced relative to the data underlying the filing effective January 1, 2024. According to NCCI, all three years showed similarly favorable experience. The state’s lost-time claim frequency has continued to decline. Indemnity and medical severity both increased slightly after steep declines during the COVID-19 pandemic but despite the slight increase in severity, loss ratios continue to decrease.

“We’re seeing real benefits for businesses and workers alike as the cost of workers’ compensation continues to drop,” said New Hampshire Insurance Commissioner DJ Bettencourt. “The workers’ compensation market in New Hampshire remains robust, offering business owners a wide array of options when selecting coverage.”

The workers’ compensation market across the country remains healthy, according to NCCI. The industry’s calendar year 2023 combined ratio was 86%, a sign of underwriting profitability, and net written premium increased by 1%.

NCCI data shows that injured worker claims frequency has continued to decline on a countrywide basis, while claim severity changes were moderate for 2023.

NCCI credits a continued focus on worker safety and technological advancements as contributing to fewer workplace injuries over time.

While payroll increased by 6% between 2022 and 2023, workers’ compensation system costs have increased at a slower pace than wages during the same period. Also, while economic inflation has been elevated over the past few years, this has not generally translated to higher workers’ compensation medical and indemnity benefit costs, according to NCCI.

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