Employers see improving market for workers comp insurance

BOCA RATON — Florida is no longer among the top five states when it comes to workers comp insurance rates, and likely has dropped out of the top 10 for the first time in years.

A new workers comp rate sheet went into effect Monday dropping premiums on average by 15.7 percent.  Rates have dropped every year since the Legislature reformed the state’s workers comp laws in 2003. The cumulative effect: rates on average are down 40.6 percent over the past four years.

Every two years, Oregon’s Department of Consumer and Business Services puts out a ranking of the 50 states and District of Columbia by workers comp rates. The latest study, released in November, ranks Florida as having the sixth highest rates in the country, with an average cost of $3.32 per $100 of payroll. The ranking is based on rates that went into effect a year ago and doesn’t include the latest cut.

Adjusting for the latest rate cut, Florida would rank as low as 17, says Lori Lovgren, NCCI’s state affairs director for Florida. NCCI is the Boca Raton-based nonprofit that submits workers compensation rate filings for all insurance companies doing business in Florida. Factoring in rate cuts by other states would push Florida higher, but not that much higher.

“If you adjust all the states, it still would be a significant drop,” Lovgren said. “Insurance Commissioner Kevin McCarthy asked me where Florida was. I said definitely out of the top 10.”

By comparison, Florida ranked third in 2004 and second in 2002.

On Friday, the state Department of Insurance Regulation issued its annual study of Florida’s workers comp market, finding coverage generally more available and more affordable since the 2003 reforms.

The exceptions: small businesses, new businesses and construction companies.

“Due to the foresight of the Florida Legislature, these reforms have revitalized the market and increased competition,” McCarty said in a statement.  “The resulting rate reductions have made the state of Florida a more attractive business environment.”

Lovgren said the decline in rates comes despite increasing medical costs. Employers are filing fewer claims, the result of improvements in technology and greater emphasis on workplace safety.

The state report also cited a crackdown on employers fraudulently dodging the workers compensation system, which means more companies paying premiums.

The Workers Comp Top 10

Florida has the sixth-highest workers compensation insurance premiums in the country with an average cost of $3.32 per $100 of payroll as of January 2006. North Dakota had the cheapest among the 50 states and the District of Columbia.

State                                    Premium/$100 of payroll

1. Alaska                        $5.00
 2. California                        $4.13
 3. Delaware                        $3.91
 4. Kentucky                        $3.78
 5. Montana                        $3.69
 6. Florida                        $3.32
 7. Vermont                        $3.24
 8. Maine                        $3.21
 9. Alabama                        $3.17
10. New York                        $3.15
51. North Dakota            $1.10

The Workers Comp Top 10

Florida has the sixth-highest workers compensation insurance premiums in the country with an average cost of $3.32 per $100 of payroll as of January 2006. North Dakota had the cheapest among the 50 states and the District of Columbia.

State                             Premium/$100 of payroll

1. Alaska                        $5.00
 2. California                   $4.13
 3. Delaware                   $3.91
 4. Kentucky                   $3.78
 5. Montana                     $3.69
 6. Florida                      $3.32
 7. Vermont                     $3.24
 8. Maine                         $3.21
 9. Alabama                     $3.17
10. New York                 $3.15
51. North Dakota            $1.10

Rankings are based on rates effective Jan. 1, 2006. Source: Oregon Department of Consumer and Business Services November 2006 survey.