Steven Bell, Vice President, Lovell Safety Management Co., LLC
At a time when most commercial insurance lines seem locked into a cycle of increases, workers’ compensation in New York State continues to do the opposite. The latest filing from the New York Compensation Insurance Rating Board (NYCIRB) resulted in a 13.2% statewide loss cost decrease effective October 1, 2025. The most recent filing is not an anomaly but rather the continuation of a long-term trend that has now been in place for nearly a decade. The filing reinforces a simple but important point: workers’ compensation has become one of the most stable, predictable, and consistently improving line of insurance in New York.
That was not always the case. Prior to 2008, workers’ compensation pricing in New York was based on manual rates, not loss costs and because of the rate making structure workers’ compensation was viewed as one of the more volatile performing lines on an insurance program. That instability ultimately led to systemic change.
Reform and the Shift to Loss Costs
The 2007 Reform Act marked a turning point for New York’s workers’ compensation system. While the immediate rate reductions were meaningful, the more important impact was structural. The reform was historically significant in establishing “caps” or duration limits on permanent partial disability benefits, which previously were paid for a lifetime, while simultaneously increasing the maximum weekly benefit rates.
Shortly thereafter, New York adopted a loss cost rating system effective October 1, 2008. Under this approach, NYCIRB began publishing loss costs by classification, while insurance carriers applied their own loss cost multipliers to account for expenses and profit. This change brought New York in line with most other states and introduced additional transparency and improved competition in the marketplace. It also separated statewide actuarial indications from individual carrier expense structures, allowing pricing to better reflect actual loss experience. The years after the adoption of loss costs were still influenced by legacy claims and prior medical trends. Between 2009 and 2016, loss cost filings resulted in increases or no change as the system adjusted to post-reform realities.
Since 2017, loss costs in New York have declined in every filing year. Over this period, there were cumulative reductions of – 67.6%. The 13.2% decrease effective October 1, 2025, is one of the largest in recent history, but it follows a series of meaningful reductions year after year. What makes this trend notable is not just the size of the decreases, but their consistency when compared to other insurance lines. While auto liability, general liability, property, and umbrella insurance have all experienced upward pricing pressure, workers’ compensation has continued to move steadily downward.
Why Workers’ Compensation Is Different
The reasons for this divergence are structural. First, claim frequency has fallen. Safer workplaces, improved training, automation, and employer investment in safety programs have reduced the number of injuries entering the system. Second, claim severity has remained relatively controlled. Workers’ compensation benefits from fee schedules, treatment guidelines, and a regulated medical environment that is not as structured in liability-based lines. Third, wage growth has outpaced loss growth. Because workers’ compensation premiums are based on payroll, rising wages increase the premium base. When losses remain stable or decline, loss costs must fall to maintain actuarial balance.
Finally, carrier results have remained profitable. Accident-year combined ratios consistently remain below 100%, even before investment income is considered. This profitability supports rate adequacy without the need for increases.
State assessments are another often-overlooked part of the equation. In 2011, the assessment level exceeded 20% of premium and has decreased every year since then except for 2018. Today, the assessment stands at 7.0% as of January 1, 2026. These steady decreases reflect the continued financial strengthening of the system and directly reduce employer costs when combined with declining loss costs.
Why Individual Premiums Don’t Always Decline
Despite favorable statewide trends, not every employer sees a reduction in premium. Payroll growth, experience modification changes, carrier underwriting decisions, and program structure all affect final cost.
This makes regular program reviews critical, and one of the most effective ways for employers to fully benefit from the declining loss cost trend is participation in industry-specific safety groups. These programs align employers with similar risks, emphasize loss prevention, and return underwriting profits to participants through dividends.
A Success Story
At Lovell Safety Management, we have been specializing in safety group programs since 1936. Through our 13 industry-specific safety groups, Lovell has helped employers translate system-wide improvements into tangible financial results, returning more than $1.28 billion in dividends to employers in our programs.
The -13.2% loss cost decrease effective October 1st, 2025, is not an anomaly. It is the continuation of a long-running transformation that has reshaped workers’ compensation in New York. In an insurance environment defined by rising costs, workers’ compensation stands apart as a system that has stabilized, delivering consistent loss cost decreases for nearly a decade.
That is something few insurance lines can claim.
If you have any questions about how Workers’ Compensation costs may impact your business, please reach out to a Lovell representative at 1-800-556-8355.