New Hampshire approves a 5.6 percent decrease in workers’ compensation costs for 2025

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

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

The market has now seen loss costs decline for 13 consecutive years, with a cumulative reduction of over 65% over this period. State voluntary loss costs are down 14% on average in 2024, 7% in 2023, and for 2022, down 8%.

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

The 2025 rate proposal was filed 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 end-2023 premium and loss experience from the 2020, 2021 and 2022 policy years and shows improved experience relative to the data underlying the filing effective January 1, 2024. According to NCCI, all three years have similarly shown favorable experience. The frequency of state compensation continued to decrease. Both claims and medical severity increased slightly after steep declines during the COVID-19 pandemic, but despite the slight increase in severity, loss rates continue to decline.

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

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

NCCI data shows that the frequency of injured workers’ compensation claims continued to decline nationally, while changes in claim severity moderated for 2023.

NCCI believes that continued focus on worker safety and technological advances contribute to fewer workplace injuries over time.

While wages rose 6 percent between 2022 and 2023, workers’ compensation costs grew at a slower rate than wages over the same period. Also, while economic inflation has been elevated over the past several years, this has not generally translated into higher workers’ compensation costs for medical and severance benefits, according to the NCCI.

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Trends Profit Loss Workers Compensation Talent New Hampshire