Workers’ compensation brokers are still seeing aggressive pricing as 2026 moves toward its close, even as some of the underlying economics of the line become less supportive of further reductions.
One factor potentially prolonging that competition is coming from outside workers’ comp altogether: the rapidly softening commercial property market.
The Council of Insurance Agents & Brokers’ latest P&C Market Survey found workers’ comp premiums declined by an average 3.2% in the second quarter, marking the 18th consecutive quarter of decreases. Commercial property fell even faster, dropping 6.3%.
Bill Chepulis, head of large casualty for US National Accounts at Zurich, said falling property revenue could create pressure for carriers to find growth elsewhere, with profitable workers’ comp an obvious target.
“You get this pressure on the revenue side,” Chepulis told Insurance Business. “It creates a lot of bad behavior in the market. People may be low-cutting because you have to put something on the books."
Workers’ comp still gives insurers plenty of reason to compete. NCCI reported a 91% calendar-year combined ratio for private carriers in 2025, extending the industry’s underwriting-profit streak to 12 consecutive years. But the underlying accident-year combined ratio reached 102%, while lost-time claim frequency declined only 2%. Medical and indemnity claim severity both increased 4%. Those figures reflect some of the tension Chepulis is seeing: frequency remains favorable, but higher severity is making future results harder to predict.
“We’ve had roughly five years of rate decreases in aggregate and price adequacy erosion,” he said. “Workers’ compensation is still the most profitable casualty line. But for every dollar it’s less profitable, we have one dollar less to offset all the continued woes on the rest of the casualty lines. That’s where the equation gets sticky."
The problem is how far carriers can push that profitability before pricing begins moving materially out of step with loss costs. Chepulis expects the automatic reductions brokers and clients have become accustomed to eventually to disappear. “In the future, it’s going to be around that flat line,” he added.
Stephan Paulin, workers’ compensation practice leader at Orion Risk Management, an Alera Group company, sees a case for carriers making smaller, incremental rate increases in the future in response to revenue pressure from other lines.
“It maintains credibility with the buyer when you’re able to get some rate, maybe a couple of points, understanding what your long-term strategy is and where you want to move to,” Paulin said, “especially when the property side is seeing 10% or 15% rate decreases.”
Employers with strong safety performance, risk engineering and claims outcomes may still be able to secure favorable terms. The challenge for brokers is showing how those account-specific results compare with wider trends and questioning whether a particularly sharp discount is sustainable.
At the same time, a carrier’s claims service, risk engineering support and stated pricing direction part of clients’ renewal discussion alongside the premium.
California is already showing how quickly workers’ comp could shift. Effective September 1, the state approved advisory pure premium rates averaging $1.65 per $100 of payroll, 6.6% above the September 2025 level. WCIRB also reported that average charged rates in the first quarter of 2026 were roughly 6% higher than in 2025 after a decade-long decline.
Chepulis pointed to cumulative trauma, litigation and medical costs as particular concerns in the state. “That’s going to be a battleground in California,” he said. “I think the loss costs are disproportionately running higher than the rest of the country.”
