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Workers’ compensation comparison across the states

Highlights

  • As of Jan. 1, 2018, Oregon has the sixth lowest average workers’ compensation rates.
  • Oregon’s average rates are 68 percent of the national median rate.

The Information Technology and Research Section has produced a national study of workers’ compensation rates biennially since 1986. This study is designed to produce an interstate comparison of premium rates.

The study uses the National Council on Compensation Insurance (NCCI) classification codes. Of the approximately 430 active classes in Oregon, 50 are selected based on relative importance as measured by share of losses in Oregon. These 50 classes represent the majority of Oregon’s payroll and losses.

The states that do not use the NCCI classification system are also included in the study. Analysts in these states select analogous classes to the NCCI classes, making it possible to compare these states with the states served by NCCI.

The study uses the manual rates, rates for expected claim costs plus factors for insurer expense and profit. Pure premium, increased by the expense load factor, represents the manual rate per $100 of earnings. For each state, these manual rates are computed for each of the 50 classifications and the Oregon loss distribution is used to compute the state’s overall average rate.

The insurance premium paid by an employer is not just the manual rate multiplied by payroll. Other factors, such as premium discounts for quantity purchases, experience modification factors, premium reductions on policies carrying deductible features, retrospective rating plans, and dividends, affect the rate an employer pays. Because comparable data across states do not exist, these factors are not accounted for in this study.


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