Workers’ Compensation Insurance Loss Cost Average Continues Decreasing for 53.5% Cumulative Reduction Over 11 Years
The Colorado Division of Insurance has approved a decrease of 4.3% for 2025.
DENVER - The Colorado Division of Insurance (DOI), part of the Department of Regulatory Agencies (DORA), has approved a reduction of 4.3% (-4.3%) for the average “loss costs” component of workers’ compensation insurance premiums for 2025.
For Colorado, this will be the eleventh consecutive year without an increase to this key measurement in workers’ compensation insurance. The average overall annual decreases in the loss costs component have led to a 53.5% (-53.5%) cumulative average decrease over the last 11 years.
Loss costs are the average cost of lost wages and medical payments of workers injured during the course of their employment. Factors that may increase or decrease workers’ compensation costs include: frequency of injuries, duration of claims, number of treatments for each claim, severity of injuries, increasing medical costs and overall costs to cover workers’ compensation claims.
“Decreasing the loss cost component of workers’ compensation helps Colorado employers, which in turn helps keep their employees safe,” said Colorado Insurance Commissioner Michael Conway. “And keeping people safe is in everyone’s interest.”
The average loss costs component is the average of changes across all worker classifications within the manufacturing, contracting, office / clerical and goods and services industries (and also includes a miscellaneous industry category).
Even as statewide average loss costs have been decreasing for years, and will again decrease 4.3% for 2025, employers may see variation in their workers’ compensation premiums, either increases or decreases, based on their particular classification code or industry group.
The National Council on Compensation Insurance (NCCI), a rating and advisory organization, collects annual data on workers’ compensation claims for the insurance industry, and publishes loss costs that form the basis for all workers’ compensation premium determinations. All insurers in Colorado use the NCCI loss costs as a base. Each insurer's own expenses are added to the NCCI’s loss costs to arrive at the rates charged to employers. This is another reason why an individual employer’s specific rate change may be different from the -4.3% change.
The projected loss cost figures for 2025 were submitted by NCCI to the DOI earlier this year. The independent actuarial firm of The Davies Group was contracted to provide a review of the analysis for all of the industry classes in Colorado. The NCCI filing, the actuarial analysis and any public comments are used by the Colorado Insurance Commissioner to establish the loss costs used for the premium rates for the upcoming year.
To view the 2025 NCCI loss cost filing, individual classification codes and the final order of approval from the Commissioner of Insurance, visit the DOI’s Workers’ Compensation website.
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About the Division of Insurance:
The Colorado Division of Insurance (DOI), part of the Department of Regulatory Agencies (DORA), regulates the insurance industry and assists consumers and other stakeholders with insurance issues. Visit doi.colorado.gov for more information or call 303-894-7499 / toll free 800-930-3745.
About DORA:
DORA is dedicated to preserving the integrity of the marketplace and is committed to promoting a fair and competitive business environment in Colorado. Consumer protection is our mission. Visit dora.colorado.gov for more information or call 303-894-7855 / toll free 800-886-7675.
