The IVANS Index Continues to Report Negative Workers’ Compensation Renewal Rates
According to the IVANS Index’s recently released data on renewal rates for standard commercial lines insurance products for the month of August 2017, workers’ compensation renewal rates are continuing to be in the negative. The report for July 2017’s report was the first to report significant negative findings; according to the data, workers’ compensation renewal rate was -1.41%, which was a significant decrease from June’s -0.86%, as this marked the first time that the renewal rate fell below -1.00% in the year 2017.
Though August’s workers’ compensation renewal rate increased to -0.83%, workers’ compensation is the one area that has seen consistent negative numbers in recent months. While other products (such as commercial auto insurance and general liability insurance) saw decreases in their premium renewals for the month of August, workers’ compensation remains the only domain in the negatives at all, and the only one with consistent negative growth, as commercial property insurance, umbrella policies, and BOP all have remained in the positive and seen only positive movement.
This data does beg the question of why workers’ compensation is the one outlying policy with the lowest renewal rates. While requirements vary state by state and depending on the size and nature of the business, the majority of states require most businesses to carry some form of workers’ compensation coverage, with several options available for coverage (most states require that coverage be purchased from a commercial provider with self-insuring available to businesses with approval, and certain states allow coverage to be purchased from their state’s respective fund).
The renewal rates could be attributed to the variety of options described above; as businesses get the approval to self-insure they may choose to forego coverage in favor of covering it themselves. This is a common practice in smaller businesses and industries with lower rates of safety incidents, as they often feel that they do not need to spend the money on a policy. In addition, some insurance carriers can be more selective in certain areas, which can make it difficult for small businesses to find an adequate workers’ compensation policy.
About Caitlin Morgan
Caitlin Morgan provides a broad range of Workers’ Compensation insurance solutions along with strong risk management and return-to-work programs designed to minimize losses and get workers back on the job as soon possible. For more information about our programs, give us a call at 317.575.4454.