Workers’ Compensation Policy Renewals: What to Expect
January 1st sees the most number of workers’ compensation policy renewals. What does this mean, and what can we expect during the first month of 2022 as a result? Let’s talk about what to expect in terms of premium increases and risk mitigation.
Today, we’re handing over the mic to Brenda Jo Robyn, founder of Competitive Edge Insurance. Here’s what she has to say.
What Does January 1st Mean for Businesses?
January 1st is typically the day when the highest volume of workers’ compensation policies will renew.
Right now, there’s a backlog of quotes, which results in stressed underwriters and quotes coming out late.
According to Brenda Jo, the one thing you can expect is premium increases this year. “There is going to be quite a significant adjustment in several areas in which companies can expect to see,” says Brenda Jo. “Ten to up to 80% increases in their premiums based on the class code.”
Why Is This Increase Important?
People should be talking about this.
“I think for many, it’s going to come as a shock,” says Brenda Jo. “However, if they’re working with their broker, they’ll have already known about this since October and make plans accordingly.”
If your business is going to have that much of an increase, you need to decide how your pricing structure for your services or products will change in the next year to compensate.
“It’s really important to know what you’re walking into,” says Brenda Jo. “The rate increases will start on 01/01 and it’s carrier by carrier.”
What Determines Premium Increases?
There’s a base that’s put into play by The Workers’ Compensation Insurance Rating Bureau of California (WCIRB), which is our rating and statistical bureau for data. The WCIRB gives us the trends and where to go.
It’s important to note, however, that carriers can apply a lot of credits.
Elements that might bring about credits include:
- Risk mitigation
- Safety policies in place
- Safety training
- Low turnover
Some carriers can give credits from five to 40%, depending upon the class code.
For those of you who are interested in learning more about changing costs in 2022, check out this video when Brenda Jo speaks about what to expect from changing contractor costs.