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Workers compensation costs rise as claims frequency drops: NCCI

Posted On: Oct. 18, 2010 12:00 AM CST

Indemnity and medical severity for workers compensation claims continued to rise in 2009, but the frequency of such claims continued to decline, according to NCCI Holdings Inc.

In a research brief released Friday, the Boca Raton, Fla.-based unit of the National Council on Compensation Insurance Inc. said the frequency of workers comp claims dropped 4% in 2009 following a 3.4% decrease in 2008. A downward trend in claims frequency that started in 1991 likely will continue through this year, NCCI said.

Factors such as increased use of robotics, improved safety practices and an aging workforce have contributed to the continuing frequency decrease, NCCI said.

Complex claims, such as those related to carpal tunnel syndrome and lower-back issues, declined more than average during the past five years, NCCI added.

Increasing claim costs, however, have partially offset the decline in frequency. Average indemnity costs increased about 4.5% in 2009 despite a decline in average weekly wages.

“It remains to be seen whether changes in average wage and indemnity cost per claim will begin to converge in 2010,” NCCI said in the research brief.

Average medical costs for workers comp claims rose 5% last year, the lowest increase in the past 15 years, NCCI said.

NCCI’s research brief is available at