Arkansas Insurance Commissioner Alan McClain announced Thursday that businesses in the state could see another rate decrease in workers’ compensation insurance this year.
He said the Arkansas Insurance Department (AID) approved an overall average workers compensation voluntary market loss cost level decrease of 10.8% and a drop of 11% for the assigned risk market.
The new rates for policies renewing on or after July 1 represent a significant change from last year, which saw a 1.1% decline in the voluntary market and a 1.6% cut in the assigned risk market.
“As Arkansas businesses and workers face the challenges brought on by the COVID-19 pandemic, it’s encouraging to see that workplaces continue to prioritize the safety of our valuable workforce, resulting in lower workers’ compensation rates,” McClain said. “I commend the Arkansas business community for its work to make our workplaces safer and in turn, our state a more affordable place to do business.”
Employers purchase workers’ compensation through one of two markets: the voluntary market and the assigned risk market.
In the voluntary market — the open competitive market — loss costs will decrease by an average of 10.8%, which is the primary component of workers’ compensation rates. Approximately 91% of Arkansas employers receive voluntary market coverage, according to AID.
In the assigned risk market — the market for employers unable to obtain coverage in the voluntary market — rates could decrease by an average of 11%.
The rate reduction will be effective on July 1, 2022.
