Guides
Workers' comp trends: frequency, severity and rates in 2026
NCCI State of the Line 2026: a 91 combined ratio, claim frequency down 2%, severity up 4% and rate cuts in most states, plus what it means at renewal.
Workers' compensation remains the most profitable major commercial line in the U.S., but the margin is narrowing. NCCI's State of the Line 2026 report, covering calendar year 2025, showed a private-carrier combined ratio of 91, lost-time claim frequency down only 2%, medical and indemnity severity each up 4%, and premium essentially flat. For buyers the practical result is still a soft price market, with state-by-state exceptions and a floor that is getting closer.
What NCCI reported for 2025
The figures below come from NCCI's 2026 State of the Line, as reported by Insurance Journal (May 14, 2026) and Risk & Insurance (May 13, 2026). The data cover private carriers in the 38 states NCCI serves unless noted.
| Measure (2025) | Result |
|---|---|
| Calendar-year combined ratio | 91, up from 86 in 2024; the 12th straight year below 100 |
| Accident-year combined ratio | 102, which strips out favorable reserve releases from prior years |
| Estimated industry reserve redundancy | $14 billion, down from $16 billion in 2024 |
| Private-carrier net written premium | About $41.6 billion, down 0.2% |
| Lost-time claim frequency | Down 2%, a slower decline than the long-term average |
| Medical claim severity | Up 4% |
| Indemnity claim severity | Up 4%, about the pace of wage growth |
| Payroll | Up roughly 5%, mostly from wage increases (per Risk & Insurance) |
| Residual market | About 5% of the market; roughly $640 million of premium for policy year 2025, versus a peak near $1.15 billion in 2015 |
A loss ratio and combined ratio below 100 means insurers earned an underwriting profit before investment income. The gap between the calendar-year ratio (91) and the accident-year ratio (102) matters: the profit in 2025 came partly from reserves set aside for older years proving more than adequate. When those releases shrink, the headline ratio rises. Use the loss ratio and combined ratio calculator to see how the components move.
Frequency: still falling, but more slowly
Workers' comp claim frequency has declined for decades as work moved away from heavy manual jobs, safety improved and employers adopted more controls. NCCI's 2025 decline of 2% was smaller than that long-term pace. According to the Insurance Journal summary, the decline came mostly from fewer claims, and NCCI saw two industry patterns:
- Construction frequency has fallen nearly 40% since 2015, faster than other industries.
- Healthcare frequency edged up over the last year, which NCCI linked to employment growth. Some states also saw upticks tied to tourism and hospitality.
For an employer, a falling market-wide frequency does not lower your premium by itself. Your experience modification rate compares your claims to expected claims for your class, so you gain only when your own record beats the average. See The experience modification rate (EMR) explained.
Severity: the part pushing costs up
Both medical and indemnity severity rose 4% in 2025. Indemnity severity grows roughly with wages, since wage-replacement benefits are tied to what workers earn. Medical severity is more of a concern: according to Insurance Journal, it outpaced NCCI's Workers Compensation Weighted Medical Price Index, which the article attributes partly to utilization, meaning more services per claim, and not only to price. That is why medical management, early reporting and return-to-work programs carry weight in claim cost. See how to lower your workers' comp costs and medical costs, opioids and workers' comp.
Cumulative trauma claims are another thread. In NCCI states, their share of lost-time claims has stayed between 1% and 6% since 2013, while in California it was about 26%, according to the WCIRB data NCCI cited (Risk & Insurance).
Why rates are falling anyway
Premium is payroll times rate. Payroll rose about 5% in 2025, but rates fell by enough that private-carrier premium dipped. The result is the odd pairing of rising claim severity and falling rates. Regulators approve rates from loss-cost filings that reflect years of favorable development, so rates lag the cost trend. Risk & Insurance reported that approved NCCI filings were expected to lower written premium by an average of 5.0% from 2025 to 2026, with recent state filings ranging from a 15.6% decrease to a 21.6% increase, the increase being in Nevada.
State filings are the number that matters at renewal. A sample of 2026 and 2027 actions from the state guides on this site:
| State | Action |
|---|---|
| California | The WCIRB and Insurance Commissioner's advisory pure premium rate of $1.65 per $100 of payroll, effective September 1, 2026, up 6.6% |
| Georgia | NCCI filing for an 8.8% decrease in voluntary loss costs effective March 1, 2026 |
| Maryland | NCCI filing, a 5.4% decrease for January 1, 2027 |
| Minnesota | MWCIA 2027 pure premiums down 4.5% |
| Connecticut | NCCI proposed loss cost change of -4.9% for January 2027 |
| Michigan | Advisory pure premiums for 2027 unchanged (0.0%) |
Treat these as filings and advisory figures: loss costs are not the rates you pay, which each carrier sets from its own filing and its own expense, schedule credits and underwriting. Check the state's page and your carrier's quote. California is the stand-out: NCCI reported that California, about 20% of the industry, had an accident-year combined ratio of 129 in 2025 and has been above 100 for five years, which is why California rates are rising while most states cut.
What this means at renewal
- Expect a competitive market in most states. Insurers still make money on the line overall, and the residual market, the plan for employers who cannot find coverage, has shrunk to about 5% of premium. See assigned risk and residual markets for workers' comp.
- Do not expect cuts everywhere. California and a few other states are going the other way, and individual accounts with a poor mod or a bad class mix are priced on their own record.
- Payroll growth masks the decline. If your payroll grew 5% and your rate dropped 5%, your premium is flat. Compare rates and payroll separately.
- Shop on terms, not only price. When the market is soft, carriers compete with schedule credits, dividend plans, retrospective rating and loss control services. Ask the broker for the full set of options.
- Rate adequacy is thinning. The accident-year ratio above 100 means current business is not breaking even without reserve releases. If the releases run out, the cycle can turn. That is a reason to lock in multi-year relationships, review your experience mod and keep your safety program funded while the price is good.
Worked example (hypothetical)
Say a 90-employee manufacturer in a state with an approved 5% loss-cost decrease has $3.0 million of payroll in its main class, a mod of 0.95, and its payroll grows 5% to $3.15 million at renewal.
- Payroll is up 5%, the filing lowers the class rate by 5%, so the manufacturing class premium is almost flat before the mod and credits.
- If the employer's frequency stayed steady but one back injury added to its experience period, the mod may rise next year, offsetting the market's price cut.
- If the employer cut lost-time claims, the mod may fall, and the market's softness amplifies the savings.
The numbers are illustrative only. Use the workers' comp premium calculator with your carrier's rates and the Experience mod (EMR) calculator to test your own situation.
Who writes workers' comp
The largest writers and the market shares are covered in the largest workers' comp insurers. Premium changes in 2025 and 2026 affect all of them, but they have different mixes of states and classes, which is why one insurer's results can differ from the industry's.
Key takeaways
- NCCI's State of the Line 2026 shows a 91 combined ratio for 2025, but an accident-year ratio of 102, so reserve releases are doing part of the work.
- Lost-time frequency fell 2%, slower than usual, while medical and indemnity severity each rose 4%.
- Private-carrier premium was about $41.6 billion, down 0.2%, because rate cuts outweighed payroll growth.
- Filings vary by state: California is rising, many NCCI states are falling. Check your state's approved filing and your carrier's actual rate.
- Your own mod, class and claims management matter more than the market trend. Keep injuries reported early, medical costs managed and return-to-work programs running.