Workers’ compensation insurance rates will drop in 2022
Arkansas Insurance Commissioner Alan McClain announced Thursday, March 10 that Arkansas businesses may see a further drop in the workers’ compensation insurance rate in 2022.
McClain said the Arkansas Department of Insurance (AID) has approved an overall average decrease in the level of workers’ compensation voluntary market loss costs of 10.8% and an 11% decrease for the market. assigned risks.
The new rates – for contracts renewed on or after July 1, 2022 – represent a significant change from last year, which saw a 1.1% drop in the voluntary market and a 1.6% drop in the assigned risk market.
“As businesses and workers in Arkansas face the challenges posed by the COVID-19 pandemic, it is encouraging to see that workplaces continue to prioritize the safety of our valuable workforce. resulting in lower workers’ compensation rates,” McClain said. “I commend the Arkansas business community for their work to make our workplaces safer and, therefore, our state a more affordable place to do business.”
Employers buy workers’ compensation through one of two markets: the voluntary market and the assigned risk market.
In the voluntary market — the open competitive market — claims costs will decline by an average of 10.8%, which is the largest component of workers’ compensation rates. About 91% of employers in Arkansas have voluntary market coverage, according to AID.
In the assigned risk market — the market for employers who cannot obtain coverage in the voluntary market — rates could decline by an average of 11%.
The rate reduction will take effect on July 1, 2022.