Work comp rates drop for assigned-risk pool

More than 9,000 Missouri businesses will have lower average rates for workers' compensation coverage during the next year, according to a state Department of Insurance release.

The average premium will decrease 4.5 percent for firms buying their coverage in the year beginning July 1, through the Missouri assigned-risk pool, administered under state contract by Travelers Indemnity Co. of Missouri. Firms doing so are unable to buy workers' comp coverage in the regular market, according to a department release.

The premium reduction is part of the state's renewal of the contract, which in July 1995 made Travelers the first private insurer to bear the financial risk for the performance of a state workers' comp pool.

Although workers' compensation rates generally have been declining substantially in Missouri since 1994, the premium reduction for pool coverage is especially significant, according to Jay Angoff, director of the Missouri Department of Insurance.

In 1994, about 40 percent of businesses in the state had to buy workers' compensation through the pool because commercial insurers refused to write the coverage.

But as the workers' compensation environment improved, insurers began competing for policyholders from the pool, and only about 9,000 companies must purchase pool coverage now. Travelers anticipates that number will drop to 8,100 in the coming year.

The average premium reduction includes a 4.2 percent across-the-board rate decrease for all businesses, as well as a 50 percent cut in the surcharge for businesses that do not participate in a safety program and a slight increase in the administrative charge for each policy.[[In-content Ad]]