FRANKFORT, Ky. — An annual filing insurance carriers will use to develop workers’ compensation coverage rates shows the seventeenth consecutive decrease in loss costs, Kentucky Department of Insurance (DOI) Commissioner Sharon Clark announced today.
The 2022 filing, approved by the Kentucky Department of Insurance, and effective Jan. 1, 2023, was submitted by the National Council on Compensation Insurance, Inc. (NCCI), an advisory organization that is the oldest provider of workers’ compensation and employee injury data and statistics in the nation.
“The decrease shows the continuing decline in the lost time claim frequency and flat trend of the indemnity severity rate as well as an annual loss ratio trend for indemnity of -6.8%,” said DOI Commissioner Clark. “Under the leadership of Gov. Andy Beshear, Kentucky is increasing its investment and creating quality jobs. The decreased claim figures make Kentucky an appealing state to do business.”
The filing reflects an overall decrease across the class codes used in Kentucky, including manufacturing, office, and clerical, contracting and goods and services. Wage and medical inflation have the potential to affect historical patterns and were considered, but it is not anticipated to create increased premiums due to the declining claim trend. Surface mining decreased by 2.2% for coal classes, while underground coal mining increased by 3.5% from the 2021 loss costs.
A loss cost is an average compensation for lost wages based on the level of disability, plus medical benefit payments. The loss cost is a direct component in the computation of an individual employer’s workers’ compensation insurance rate. COVID-19 -related claims were not included in the data used for this analysis.
Click here for more Kentucky business news.