Average workers' compensation loss cost: Reduction of 2.4 percent

Third consecutive year without an increase.

DENVER (Dec. 22, 2016) – The Colorado Division of Insurance (DOI), part of the Department of Regulatory Agencies (DORA), approved a change of -2.4 percent for  the average “loss costs” component of workers’ compensation premiums for 2017.  Although the statewide average loss costs will decrease 2.4 percent, individual employers may see an increase or decrease to their workers’ compensation premium based on their particular classification code or industry group.

This will be the third consecutive year without an increase for the loss cost component, and the second straight year with a reduction.  However, the loss cost component of workers’ compensation premiums in Colorado has been going down since 2014, when the increase was only 3 percent versus the 5.2 percent increase in 2013.  As has been the case in recent years, this decrease is due to an overall reduction in the number of workplace accidents.

“Employers in Colorado continue to do a good job of preventing workplace incidents in the first place, which helps everyone in keeping workers’ compensation costs down,” said Commissioner of Insurance Marguerite Salazar.  “I’m pleased to see this trend continue.”

Loss costs are the average cost of lost wages and medical payments of workers injured during the course of their employment. Factors that may increase workers’ compensation costs include: frequency, duration of claim, number of treatments for each claim, severity of injury, increasing medical costs and overall costs to cover workers’ compensation claims.

The National Council on Compensation Insurance (NCCI), a rating and advisory organization, collects annual data on workers compensation claims for the insurance industry, and publishes loss costs that form the basis for all workers compensation premium determinations. All insurers in Colorado use the NCCI loss costs as a base. Each insurer's own expenses are added to the NCCI’s loss costs to arrive at the rates charged to employers.  This is why each employer’s specific rate change may differ from the -2.4 percent change.

The projected loss cost figures for 2017 were submitted by NCCI to the DOI earlier this year. Independent actuarial consultants were contracted to assist the Division in reviewing the analysis for all of the industry classes in Colorado. The NCCI filing, the actuarial analysis and any public comments are used by the Commissioner of Insurance to establish the loss costs used for the premium rates for the upcoming year.

To view the NCCI loss cost filing, individual classification codes, reports, and the final order of approval from the Commissioner of Insurance, visit the Workers’ Compensation page of the Division of Insurance website, dora.colorado.gov/insurance.


The Colorado Division of Insurance (DOI), part of the Department of Regulatory Agencies (DORA) regulates the insurance industry and assists consumers and other stakeholders with insurance issues.  Visit dora.colorado.gov/insurance for more information or call 303-894-7499 / toll free 800-930-3745

DORA is dedicated to preserving the integrity of the marketplace and is committed to promoting a fair and competitive business environment in Colorado. Consumer protection is our mission. Visit dora.colorado.gov for more information or call 303-894-7855 / toll free 1-800-886-7675


Media Contact:
Vincent Plymell
Division of Insurance
p: 303-894-2261 | c: 303-910-9614