Brokers heading into 2027 renewals can still find savings on workers’ compensation, but a trend that has helped sustain years of price cuts is losing momentum. Claims involving time away from work are becoming less frequent at a slower pace, while the average cost of those claims is rising.
The Council of Insurance Agents & Brokers reported that workers’ comp premiums fell an average of 3.2% in the second quarter of 2026, the 18th straight quarterly decrease in its survey.
Matthew Zender (pictured), senior vice president of workers’ compensation strategy at AmTrust, told Insurance Business he believes current pricing is sustainable. He pointed to a long run of underwriting gains that has encouraged carriers to compete more aggressively for the business.
“The workers’ compensation line of business has gone through an unprecedented stretch of over 10 years now. So that begets some competition and those who want to use their capital in this line of business in a more aggressive manner. I personally believe that it is sustainable.”
The National Council on Compensation Insurance (NCCI) said in October that lost-time claim frequency in the states where it provides ratemaking services fell an estimated 2% in accident year 2025, compared with a long-term average annual decline of 3.8%. The preliminary figures also showed a 4% increase in average medical costs per lost-time claim and a 4% rise in average indemnity costs, which include wage replacement.
Zender noted that the frequency changes come “on top of 40-plus years of frequency improvements.” “It’s going to be interesting for us to get a feel for whether it’s a reversal or whether it’s more of just a bouncing along the bottom,” he added. “Personally, I think it’s more likely that it’s going to be bouncing along the bottom.”
Private carriers posted a national calendar-year combined ratio of 90.6% in 2025, up 4.5 points from a year earlier, according to NCCI. That was the 12th consecutive underwriting gain. In its May report, NCCI put the 2025 accident-year combined ratio at 102%. The accident-year measure isolates losses from injuries in 2025, while the calendar-year result also benefited from insurers lowering estimates for claims from earlier years.
NCCI still expects another underwriting gain in 2026 based on first-half results. Carriers can enter renewal negotiations with strong overall results even as their more recent claims experience puts pressure on pricing.
California is a notable outlier, however. The state’s advisory pure premium rate rose 6.6% to $1.65 per $100 of payroll for policies starting from September 1, 2026. Insurers set their own rates, so the increase is a benchmark for renewal conversations. The California Department of Insurance cited higher medical and claims-handling costs, as well as an expected rise in cumulative trauma claims, which can arise from repeated strain over time.
Zender sees cumulative trauma as one of the reasons California’s experience has limited value as a forecast for other states. A broker budgeting for a client with operations in several states can see a favorable renewal overall alongside a price increase for the California portion of the account.
Read more: Workers’ comp’s pricing correction has a patient zero: California
Workers’ comp benefits are set by statute, so price tends to weigh heavily when employers compare quotes. AmTrust has more than 500,000 policies in force, Zender said, and has kept its underwriting appetite consistent.
“The frequency changes that are out there are nothing that we are taking any actions against right now,” he told Insurance Business. “We aren’t changing any of our approach based on it. But we are paying a lot of attention to it.”
Read more: How property insurance softness is spilling into workers’ comp competition
Even where rates are falling, a client that has hired more workers or raised wages can pay more at renewal because the rate applies to a larger payroll.
A broker can give an underwriter context that the loss runs leave out. If a claim followed an injury on a particular production line, for instance, the submission can describe what happened and document any changes to the equipment or work process. This gives the underwriter a basis for assessing whether the same loss is likely to recur
Zender said the strength of that account-level explanation can improve an employer’s chances of securing another decrease. “I look at the completeness of the submission,” he said. “I look at the narrative that they’re telling me about what maybe was driving some of the losses that happened.”
