NCCI’s latest report: Understanding Loss Cost Actions

30 Apr, 2024 NCCI


WHAT: The article describes factors that impact loss cost changes and provides a deeper dive into the relatively larger decreases observed in recent years. 

WHO: Nadege Bernard, FCAS, NCCI Practice Leader and Senior Actuary 


  • When costs outpace wage inflation, loss cost increases are generally warranted to keep premium and losses in balance. 
  • If costs are keeping up with wage inflation, premiums will be in balance and changes to overall loss costs may not be necessary. 
  • In recent history, costs have been increasing at a slower pace than wages, resulting in decreases in loss costs. 

WHY IT MATTERS: Over the last several years, the workers compensation (WC) line of insurance has seen notable decreases in bureau level changes in states where NCCI provides ratemaking services. The main driver of these decreases stems from improved loss costs, which is defined as the portion of premium allocated to provide for indemnity and medical costs within the WC system.  

WHAT ELSE: NCCI is closely monitoring different components of loss costs and characteristics that are likely to influence changes in these factors. NCCI is committed to evaluating any early signs of shifts or changes to ensure they are accounted for in the ratemaking process. 

WHAT’S NEXT: Don’t miss the State of the Line Dialogue With NCCI’s Experts featuring author Nadege Bernard, and Chief Actuary Donna Glenn, only at NCCI’s Annual Insights Symposium 2024, []  


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