Santa Fe, NM – The Office of Superintendent of Insurance recently announced that New Mexico employers could see a key portion of their workers’ compensation costs drop by an average of 9% in 2017. This marks the second year in a row that businesses will experience an average decrease in the “pure premium” (the portion of the premium employers pay insurers to cover claims costs for job-related injuries and deaths).
Workers’ compensation pays injured workers for lost wages and medical care for job-related injuries. An improvement in average medical care costs and wage replacement costs are the key factors continuing to drive down the pure premium.
“Through the combined efforts of employers, medical providers, employees, and insurers’ care managers, we are able to see a continued positive trend in workers’ compensation rates, which supports a solid business environment for New Mexico and keeps workers protected,” remarked Superintendent John G. Franchini.
The decrease in pure premium is based on a recommendation from the Florida-based National Council on Compensation Insurance Inc. (NCCI), which analyzes industry trends and prepares rate recommendations for the majority of states. Pure premium reflects only a portion of workers’ compensation costs, but is the key factor behind annual cost changes.
The decrease is an average, so an individual employer may see a larger decrease, no change, or even an increase depending on the employer’s own industry, claims experience, and payroll.
Also, pure premium does not take into account the varying expenses and profit of insurance companies. The decrease in the pure premium is effective January 1, 2017, but employers will see the changes when they renew their policies in 2017.
Source: NM Office of Superintendent of Insurance