Average workers' compensation loss cost - reduction of 1.9%

Second consecutive year without an increase 

DENVER (Oct. 21, 2015) – The average Colorado employer will see a reduction of 1.9 percent to the loss cost component of workers’ compensation insurance premiums they pay in 2016.  This is the second consecutive year without an increase for the loss cost component (for 2015, there was no change).   

The Colorado Division of Insurance (DOI), part of the Department of Regulatory Agencies (DORA), approved a change of -1.9 percent for  the average “loss costs” component of workers’ compensation premiums for 2016.  Although the statewide impact to loss costs will decrease 1.9%, individual employers may see an increase or decrease to their workers’ compensation premium based on their particular classification code or industry group.

“As with last year, this positive development comes from the work by employers and employees to better manage workers’ compensation costs,” said Commissioner of Insurance Marguerite Salazar.

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 (number of claims per number of workers), 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 -1.9 percent change.

The projected loss cost figures for 2016 were submitted by NCCI to the DOI earlier this year. NCCI actuaries and independent actuarial consultants are contracted to assist the Division in reviewing the analysis for all of the industrial 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