As we begin the new year, many business owners have something else on their mind. With health care changes coming into effect on 01/01/2014 that’s not all that will be changing.
In Missouri, workers compensation is going to see some big shifts from what we had last year. The big shift is another year of rate increases, which has been evident of the hardening of the insurance marketplace in Missouri as well as hopes of opportunities to come.
The state of Missouri is seeing one of the nations highest rate increase recommendations in the country with NCCI (National Council on Compensation Insurance) recommending over a 10% increase for workers compensation rates.
This can be a result of many factors and most likely a combination of them all. Part of it is a natural “hardening of the marketplace” whereas all carries are seeking to increase rates. This is partly needed to offset higher than expected loss ratios during the past few years as well and to increase profitability in general.
There is no question the marketplace for workers compensation is a night and day difference than it was just 2 or 3 years ago. Prices are not the only thing that have changed, despite seeing a strong market hardening nationwide we have seen good, profitable clients see 20-30% rate increases throughout the country. Insurance company appetites have been even more invasive on the marketplace than the price has. For some small businesses, their insurance policy can be the difference between getting a project or not.
The cost of a policy being non-renewed for some high-risk industries can sometimes mean the business not having any other options besides the state fund pool, which can oftentimes be crippling for a company. Many employers in Missouri have a local Mutual company to thank for keeping their doors open in times like these and that company is Missouri Employers Mutual.
With an aggressive approach to loss prevention, safety training and proactive claims management this insurer has found a way to offer coverage for a lot of businesses that would otherwise be left stranded or forced to go to the state fund.
Despite seeing another rate increase with many carriers this year, we do have a lot to be thankful for here in the Show-Me State. In 2012 we were ranked 36 out of 51 (including DC) for the highest rates ranking putting us at lower average rates than 70% of the country.
The state of MO is working towards resolving issues with the fiscal mess of our second injury fund. The rate increases carriers are expecting for the upcoming year have generally not been over the 10% increase recommendation and have also included the 3% Second Injury Fund increase which comes from the attempt to fund the Second Injury Fund in Missouri.
A move for confidence which hopefully clears up a black eye on the system and helps boost efforts for business growth in Missouri for the upcoming years to come.
With these kinds of increases in premium rates, business owners are not the only ones who notice this change. The increase in premium can also factor how many carriers are competing for your business. Carriers know that this will cause many businesses to shop their insurance which is good because a carrier that last year thought the risk was just a little higher than the premium might now say “ok” and you now have one extra carrier competing for your business.
Or if you have your coverage through the State Workers Compensation Fund in Missouri that 10% increase in premium rates might be the difference maker to get a competitive market carrier to quote for you which many times could show a savings of 20% or more in your premium.
If you have your policy with the state fund in Missouri make sure you call an insurance agent to shop your workers compensation because this is one way this rate increase for everyone else could be great news for your company.
The long and short of this is that we will see some changes and increases come to many companies in the Missouri workers compensation marketplace during 2014. This is a natural occurrence with any industry not just Insurance, however the best way to prevent this is to make your company the most desirable of an investment to the insurance market as possible.
The Missouri market has done a good job of this for our state as a whole as we have a lot of carriers who are being more aggressive here than they are throughout other states in the country. Setting your business apart in this way will help make these companies compete for your business and give you the best rates possible.
An independent insurance agency like The Insurance Shop can help advise you on how to make your more desirable to get the best rates possible in Missouri. Get workers compensation insurance today.