Workers' Compensation loss cost continues big reductions for 2019

Division of Insurance approves 16.7 percent decrease.

DENVER (Oct. 30, 2018) – The Colorado Division of Insurance (DOI), part of the Department of Regulatory Agencies (DORA), has approved a reduction of 16.7 percent for the average “loss costs” component of workers’ compensation premiums for 2019. This continues the large decrease seen last fall when the Division announced a 12.7 percent reduction for 2018. This coming year marks the fifth consecutive year without an increase, and this particular component has been dropping since 2014.

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.

What is actually paid out in claims - the claims experience - is the biggest driver in bringing down the loss costs portion of premiums. And it’s a reduction in the number of claims being filed that is driving down the claims experience, going from 26.3 claims filed per million in 2002 to 18.4 claims per million in 2016.

“I’m pleased to see us heading into another year with another large decrease in loss cost,” said Interim Insurance Commissioner Michael Conway.  “My hope is that this translates into overall lower costs for employers and workers in Colorado, and that savings in this area are reinvested in human capital.”

Although statewide average loss costs are decreasing 16.7 percent, individual employers may see variation in their workers’ compensation premium, either increases or decreases, based on their particular classification code or industry group.

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 another aspect of why each employer’s specific rate change may differ from the -16.7 percent change.

The projected loss cost figures for 2019 were submitted by NCCI to the DOI earlier this year. Independent actuarial consultants were contracted to provide a review of 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,


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 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 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