On March 21st, the Massachusetts Commissioner of Insurance approved a Stipulation for the general revision of Workers’ Comp rates in the state, to be effective April 1st, 2014. Several classes of business are affected to reflect industry group differentials even though there is no change in the overall average rate level. These changes are applicable to all new and renewal policies.
Click here to access the WCRIB Rating Values
What does this mean for you?
Based on the way that Workers compensation insurance has been deteriorating over the past two years in MA, with carriers exiting writing the line of coverage all together (see AIG, Zurich, ACE and others exiting the MA market,) and seeing the pool burden grow by more than double, we had expected that the state would have looked to increase rates to encourage carriers to open up and get back in the game. However, since this is one of the most politicized states (even the Attorney general is involved in the WC rate making process…isn’t that why we have a Commissioner of Insurance?), the powers that be have passed an overall rate reduction. With this filing we can see that some class codes went up (as high as 12-15%) and some went down.
So what’s the possible up side?
Well, in typical fashion, with the rate changes the State has also changed the rating factors that go into promulgating the experience mods, which means if rates for your class do go up, then the experience mods should drop as a reflection of that change. (NOTE: Conversely if your rate dropped, you may get an increase in experience mod.) Traditionally, the Commissioner never changes the rates without also changing the Experience Mod rating factors, but I’ve learned to never say “never”! As always, we will have some clients getting a net neutral change, some will get a slight bump, and others will get the full effect (rate plus experience mod change.)
Long and short of it: we will monitor the situation closely and keep you abreast of any advances that may come of this. The bottom line is that The Gaudreau Group is in a great position to help our clients navigate these changes. As a member of the Renaissance Alliance, we have access to more carriers than most agencies in New England, and we have significant clout with those carriers.
If you have any question or wish to secure a consultation to learn how this might affect you in the short and long term, please don’t hesitate to call us.
At The Gaudreau Group, our professionals are well positioned to ensure that all of our clients weather any market conditions. Being part of the Renaissance Alliance allows access to superior Business Insurance options and expert Risk Management services. Through a network of more than 90 offices located throughout New England, we can offer you all the advantages and clout of a large national insurance company while providing you with personal accountability and localized services. The Gaudreau Group has innovative solutions, such as our Group Captive Insurance program, that empower our clients to reduce, control and profit from business insurance costs. With virtually every carrier and program underwriter within our reach, we can easily provide our clients the most efficient and cost-effective review…IN ANY BUSINESS CLIMATE.
