Florida 2024 Workers’ Compensation Rates
Possible 89% reduction over roughly the last 20 years
NCCI is recommending a 15% rate drop for Florida’s workers’ compensation rates in 2024. If passed, Florida’s workers’ compensation rates would have dropped by nearly 89% in roughly the last 20 years.
The proposed amount of 15% is an average reduction across all class codes. With the information currently available, we don’t know what the impact will be on construction codes, but one might guess, given the higher rates that are charged in the higher-risk work comp codes, the more room available to change versus the low-risk work comp codes.
In last year’s public presentation (starting at video time 30:38) by NCCI to the Florida Department of Insurance, a projection for 2024, with some caveats, was a 3% reduction. The additional proposed discount came as a surprise to many.
“The proposed filing is based on data from Policy Years 2020 and 2021 as of year-end 2022. The industry has seen favorable loss experience in each of those years.
Florida Chamber of Commerce Vice President of Government Affairs Carolyn Johnson said it’s not coincidental.
Businesses have made “significant efforts to provide workplaces that are safe for their employees so they can return home to their families safely at night,” Johnson told Florida Politics.
NCCI analyzes workers’ compensation data nationwide. In Florida, NCCI is the designated organization charged with annually submitting proposed rates to the Office of Insurance Regulation (OIR). Those rates are reviewed by actuaries on behalf of the state’s Insurance Commissioner, who can approve the NCCI recommendation or order it to be adjusted upward or downward.
NCCI did note in its analysis a potential upward pressure on medical costs resulting from a May 23 Division of Administrative Hearings Final Order
The proposed rate also takes into consideration changes in the medical fee schedule. The rates also included a lower profit and contingency factor — which reflects the higher investment returns expected in today’s interest rate environment.” Read more at floridapolitics.com
The following data is from the NCCI Frequency and Severity Results by State online report which can be reviewed here. Below are a few charts included from their findings.
The following “chart illustrates the average annual changes in frequency and severity observed between 2017 and 2021 by individual jurisdictions. Reviewing average changes over a longer time period smooths out year-to-year volatility.”
Florida experienced a 2.7% reduction in claim frequency and a reduction in Medical Severity by -2.7%, while Indemnity Severity went up by 3.6%.
This information is based on data valued as of December 31, 2021. Florida outperformed the region in many of the primary metrics as seen in the Claim Frequency, Indemnity Severity, and Medical Severity charts below.
NCCI will present the findings in a public testimony after Florida OIR has a chance to review the recommendations. After the public testimony and follow-up questions, the OIR will take some time before announcing its decision to accept or change the recommended rates.
We will continue to monitor the rate progression and keep you informed as we learn more.