09 Sep NCCI recommends 6.9% Florida workers’ compensation rate decrease in 2026

Anita Byer

Florida employers may be paying less for workers’ compensation insurance next year. The National Council on Compensation Insurance (NCCI) is recommending an average rate level decrease of 6.9 percent for the voluntary market effective January 1, 2026. NCCI, which is authorized to recommend rates on behalf of workers’ compensation insurers in Florida, submitted its proposed rate reduction to the Florida Office of Insurance Regulation for review. If approved, it will be the ninth consecutive year workers’ compensation rates have gone down in Florida.

The proposed 6.9 percent rate reduction is based on experience data for policy years 2022 and 2023 as of year-end 2024. It also reflects the estimated impact of the Health Care Provider Fee Schedule changes effective January 1, 2026. The rate filing submitted by NCCI notes that the number of claims (frequency) and the cost of claims (severity) continue to be key metrics for the health of the workers’ compensation system. Indeed, improved loss experience resulting from declines in the frequency of lost-time claims during these policy years is identified as the primary driver of NCCI’s proposed rate decrease.

The rate filing notes that the workers’ compensation system in Florida and nationally generally remains healthy. According to NCCI:

• The 2024 combined ratio for workers compensation is 86 percent. The combined ratio measures an insurance company’s profitability and financial health. A combined ratio below 100 percent (the break-even point) signifies underwriting profitability.
• The frequency of lost-time claims continues its long-term decline across all NCCI states.
• Claim frequency declined at a faster pace in 2024 than the long-term average rate of decline, which is seen as an indication of safer workplaces and fewer injured workers.
• The severity of medical and wage replacement claims increased in 2024, driven in part by inflationary pressure.
• Increased medical costs were primarily driven by the increased utilization of medical services by injured workers. NCCI notes that physician services account for more than 40% of all workers compensation medical services, even though the cost of these services only increased by 1.5% over the past three years.
• The increase in indemnity benefits is primarily driven by an increase in wages.

NCCI also recommends extending published rating values from two to three decimal places. According to NCCI, this decimal extension allows for more precise adjustments that will be particularly beneficial for classification codes with lower rates by minimizing rounding limitations that are more likely to impact these class codes. The methodology for determining rates, however, remains unchanged.

Remember, NCCI is recommending a 6.9 percent rate decrease for 2026. Next year’s workers’ compensation premium rates will not be known until the Office of Insurance Regulation issues a final order. State regulators must still analyze NCCI’s data and may request an adjustment to the current recommendation before holding a public hearing.