Risk & Insurance – August 2012

Where workers' comp rates were up an average 5 percent in May, they increased by just 4 percent in June. Kerr commented on the rate moderation noted for June.

"Accounts with class codes related to high-hazard exposures are being assessed considerable rate increases of plus 7 percent to plus 15 percent," he said. "Traditional 'main street' workers' compensation accounts are renewing as expiring to plus 2 percent."

Overall, the composition rate for property and casualty placements held steady at plus 4 percent in June. The rates by coverage classes included:

• Commercial property — up 5 percent.
• Business interruption — up 2 percent.
• Business owner policies — up 4 percent.
• General liability — up 4 percent.
• Umbrella/excess — up 3 percent.
• Commercial auto — up 4 percent.
• Professional liability — up 1 percent.
• D&O liability — up 2 percent.
• Employment practices liability insurance — up 2 percent.

The National Alliance for Insurance Education and Research conducted pricing surveys used in the analysis of market conditions. The surveys help to "further corroborate MarketScout's actual findings, mathematically driven by new and renewal placements across the United States," according to the June barometer.

Employers in blue collar industries who have employees under "high hazard exposure" class codes will see major premium increases. The upcoming experience rating split point change will also take its toll on these employers, who may soon find themselves struggling to keep up with the rising costs of workers compensation insurance. As a broker, this is worrying because clients will start looking elsewhere for lower rates, when they are hit with these premium hikes. Workers compensation premium recovery is the fastest and quickest way to help your clients and win new business.