The New York State Insurance Fund has released their loss cost multiplier with an effective date of November 1, 2013.
A loss cost multiplier is one of the factors that goes into rating a workers compensation policy in New York. The State Comp Board issues, with the approval of the NY Department of Financial Services (DFS) what are known as “loss cost rates” for each workers compensation class code, this is a base rate to which each insurer will apply their own multiplier factor to.
The State Fund’s multiplier starting 11/1/13 is 1.53. Commercial insurers such as Travelers, AIG, AmTrust, or Hartford have their own loss cost multipliers, and in fact most commercial insurers have several multipliers to accommodate a wide range of risk appetites. As an example, Travelers may have 5 different underwriting companies from which to issue a workers comp policy from and each of those underwriting companies will have separately filed loss cost multipliers or factors. Some underwriting companies may have very competitive factors such as 1.05 for very low hazard / high quality accounts, some may have higher factors such as 1.55 for higher hazard accounts which may have a history of claims or underwriting circumstances.
What’s important to understand is that loss cost multipliers have a very significant impact on the final cost of workers compensation insurance. At one time many clients went to the State Fund because they offered very competitive rates with upfront discounts. In addition, they only charged about half of the assessment charge compared to most other commercial insurers in New York. Today, that’s changing. If you’re insured with The NY State Insurance Fund, it makes sense to carefully review your next renewal to see what the real costs are. And, if you’re in a safety group it might make even more sense to do a thorough review and canvass of the marketplace due to the fall off of dividends in some groups.
Here’s the deal – you can call a bunch of brokers who will jam up the marketplace with your quote requests and send up red flags to underwriters that you’re just out shopping around. It’s time consuming, confusing, and usually doesn’t produce great results. OR, you can talk to us so we can take the time to understand your situation, create a solution together for you, and perform a very thorough canvass of the marketplace on your behalf. You get better results, a written service plan, and an objective risk manager at your disposal to help reduce risk – because when you reduce risk, you reduce costs. For more information on how we can help create a Workers Compensation solution for you, please use the contact box to the right, or call us in New York at 800-287-4115!