Insurers are being pickier than they have been in recent years in selecting accounts they'll underwrite for workers compensation coverage, while risky accounts are seeing midyear pricing increases of up to 10%, experts say.

“What we're seeing is a marketplace that (has been) fairly aggressive in terms of looking for increases and now has become more selective in terms of what accounts are going to receive increases and what accounts will possibly receive a decrease in pricing,” said Eric Silverstein, senior vice president and national accounts team leader with Lockton Cos. L.L.C. in Atlanta.

Sources from Lockton, Willis North America Inc. and Aon Risk Solutions say their clients have seen midyear workers comp rate hikes ranging from 2.5% to 5% for large accounts and 5% to 10% for mid-market employers.

The highest increases have been in regions such as the Midwest, New York and California, where the state is working to implement a number of workers comp reforms adopted last year. Nationwide, employers and comp insurers continue to face pricing pressures from rising medical inflation, increasing comp claim severity due to an aging workforce, state regulatory changes and lagging investment income from lackluster interest rates.

While insurers have been successful in pushing comp rate increases, experts are reluctant to call the current pricing environment a hard market.

Pam Ferrandino, executive vice president and casualty practice leader for Willis North America in New York, said insurers are handpicking the most attractive workers comp accounts based on their risk profiles.

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Insurers are asking whether they can get what they consider to be a fair premium for the risks they're assuming, Ms. Ferrandino said. And if they don't feel they can, “most of them are saying, "I don't want to write it,'” she said.

Many employers that are deemed to have less attractive risk profiles are getting their workers comp coverage underwritten by state fund insurers or are seeking alternative risk transfer vehicles, such as group captives, Willis and Lockton experts said. “If you're the best risk, you're not going to get an increase,” Mr. Silverstein said. “If you're the worst risk, you're going to get double the increase of the average.”

Brian Winters, New York-based head of casualty for Zurich Global Corporate, agreed that insurers have been more selective in their comp renewals. Mid-market accounts have seen an average pricing increase of about 10% and large accounts an average hike of 7%.

“Customers who have very good profiles and profitability, who really engage actively in claims and risk management practices ... are not getting those kinds of increases,” Mr. Winters said. “They might be getting single-digit rate increases (of) 2% to 5%. Customers who are having trouble with profitability or who have first-dollar programs and are not as engaged in safety and claims will be seeing significantly higher” rates.

Employers are working to position themselves for lower price increases by raising their deductibles, taking on higher retentions and working with Zurich to improve their safety profiles, Mr. Winters said.

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“They are ... spending more money today than I've seen in a while on things like loss prevention or loss control,” he said.

Safety has played a key role in keeping comp pricing down for Jack In The Box Inc., said Julie Nester, San Diego-based risk and claims manager. The fast-food chain has about 30,000 employees and has bought comp coverage from Ace USA for many years.

Ace recently held a meeting with Jack In The Box and the company discussed its safety program, as well as a franchising push that has reduced the number of covered workers, Ms. Nester said. She expects to see only a slight increase when Jack In The Box renews its comp policy in September.