Workers’ comp insurance rates expected to drop 12 percent

Business owners in Kansas could find more money in their coffers next year, which might help kick-start economic growth, according to the state’s top insurance official.

Ken Selzer, Kansas insurance commissioner, said Thursday that business owners are expected to pay, on average, nearly 12 percent less on workers’ compensation insurance in 2016, according to findings from the National Council on Compensation Insurance.

“This is all good for the state of Kansas,” Selzer said. “I think this could be a very positive contributing factor to growing our economy.”

The council’s findings indicate that Kansas firms will pay average voluntary base rates that are 11.6 percent lower than 2015 filing numbers. For assigned risk workers’ compensation rates in 2016, costs are expected to go down about 10.4 percent, according to a news release.

Selzer and the Kansas Insurance Department have approved the new filings, which will go into effect Jan. 1. Last year’s filing showed an average rate drop of about 10 percent, Selzer added.

“The decrease means than many Kansas businesses will pay less for the insurance they have to provide,” Selzer said. “This means more money to grow their businesses. We kind of expected this. Companies have better loss control programs today, and they’re looking at better safety measures that they can take for their employees. The trend is generally down across the country.”

The most injury-laden occupations, according to Kansas Department of Labor statistics from 2012 and 2013, often include jobs where the employee travels in a vehicle on a regular basis. In 2012 the most dangerous job in Kansas was working as a courier or messenger, according to the Department of Labor’s annual survey of occupational injuries and illnesses, where 10.2 injuries or illnesses were reported per 100 workers.

James Oberwortmann, co-owner and chief financial officer for Wichita-based delivery service provider Metro Courier, said a potential savings of 12 percent on workers’ compensation rates could save his business – which employs 75 – tens of thousands of dollars.

“It would be significant for our business,” Oberwortmann said. “Savings like that could be used for a lot of other things. We could buy two new vehicles. Workers’ comp savings will always start with the employer and the type of program you have, but any savings on rates are great.”

Approximately 65,000 Kansas businesses pay for workers’ compensation insurance, according to the insurance department. The 2016 council filing applies to “all insurance carriers writing workers compensation policies for businesses in the state,” according to the insurance department release.

“The number put forth by the council generally revolves around improved loss experience by the insurer,” Selzer said. “As claim costs decrease, rates also decrease. Across different industries, there are different class codes that will find rates to be higher or lower than that 11.6 percent number, but this will contribute to a favorable environment for employees and for businesses.”

In the release, Michael Copeland, the state’s interim commerce secretary, said he expects the lower rates to allow companies to “invest more” and “create jobs.” The Florida-based council bills itself as a nonprofit workers’ compensation data and advisory organization and provides insurance rate recommendations.

This story was originally published October 22, 2015 at 6:09 PM with the headline "Workers’ comp insurance rates expected to drop 12 percent."