Starting in January, workers’ compensation insurance rates for Florida businesses could drop by an average of 7%.
The National Council on Compensation Insurance last week recommended an average rate decrease of 6.9% for the voluntary market, effective Jan. 1. If approved by Florida’s Office of Insurance Regulation, the decrease would mark the ninth straight year for workers’ comp rate reductions in the Sunshine State.
Regulators approved a 1% average decrease for 2025 – the smallest cut in years. That followed decreases of 15.1% in 2024 and 8.4 % in 2023. Since 2003, when Florida lawmakers made historic changes to the state’s workers’ compensation system, overall rates have fallen by a cumulative 85%. This year, Florida ranked as one of the lowest-cost states – it ranked 30th, or 10th from the bottom, on the cost of workers’ comp insurance for employers, according to the Oregon Department of Consumer and Business Services’ bi-annual survey.
The NCCI said Florida’s recommended rate reduction for 2026 is based on loss experience for 2022 and 2023, including a decline in lost-time claim frequency in those years. The reduction recommendation may have been greater but for an increase in fees paid to health care providers who treat injured workers, a fee schedule approved by lawmakers in early 2024. The long-awaited increase in health care fees was one reason the rate decrease for this year was so small, the NCCI has explained.
Nationwide, the workers’ compensation system continues to show marked profitability. The combined ratio for U.S. comp insurers in 2024 was 86%, NCCI reported.
“The frequency of workers compensation lost-time claims continues its long-term decline across all NCCI states,” the NCCI rate summary notes. “In fact, claim frequency declined at a faster pace in 2024 than the long-term average rate of decline, an indication of safer workplaces and fewer injured workers.”
Claim severity increased for medical and wage replacement components in 2024, the council wrote. Medical cost increases were driven in part by some inflationary pressures.
“However, the primary driver of the increase in medical costs was the increased utilization of medical services by injured workers,” the summary explained. “Physician services account for more than 40% of all workers compensation medical services, although the cost of these services only increased by 1.5% over the past three years. The increase in indemnity benefits is primarily driven by an increase in wages.”
Meanwhile, the NCCI released an analysis of the “disappointing” U.S. September jobs report. The report showed an employment growth of just 22,000 in August, with declines in construction and manufacturing.
“While disappointing labor market data continues to stack up and we remain cautious on the outlook, we still believe that it is too early to call for a recession at this time,” the NCCI’s Executive Director and Senior Economist Stephen Cooper said. “This string of data may in part reflect elevated economic uncertainty and may reverse with the possible easing of those conditions.”
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