Workers’ compensation loss cost decreases for 2020

Division of Insurance approves 8.5% decrease.

DENVER (Nov. 13, 2019) – The Colorado Division of Insurance (DOI), part of the Department of Regulatory Agencies (DORA), has approved a reduction of 8.5 percent for the average “loss costs” component of workers’ compensation premiums for 2020. This will be the sixth consecutive year without an increase to this key measurement. 

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 or decrease workers’ compensation costs include: frequency of injuries, duration of claims, number of treatments for each claim, severity of injuries, increasing medical costs and overall costs to cover workers’ compensation claims.

Claims experience - what is paid out for claims - is the biggest driver in bringing down the loss costs portion of premiums. And it is a reduction in the number of claims being filed that is driving down claims experience, going from 31.6 claims filed per million dollars in premiums 2003, to 19.9 claims per million dollars in premiums in 2017 (for wage-adjusted premiums). 

“Yet another year with a decrease in loss cost for workers’ compensation is another win for Colorado employers,” said Colorado Insurance Commissioner Michael Conway. “Large and small companies alike should be able to use this to help their businesses and their employees.”

Although statewide average loss costs are decreasing 8.5 percent, it is important to understand that employers may see variation in their workers’ compensation premiums, 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 reason why an individual employer’s specific rate change may be different from the -8.5 percent change.

The projected loss cost figures for 2020 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 Colorado Insurance Commissioner 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 DOI 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