The decline in claim frequency for workers compensation
injuries has continued into 2004—good news for workers,
employers, and their insurers. This decline continues to
be the greatest for smaller claims.
The higher rate of frequency decline for smaller claims
than for larger claims has contributed to an increase in
severity (average cost per claim). The latest NCCI
research indicates that approximately 30% of the growth
in severity in recent years, or about 2.5% out of the 8.4%
average annual increase, can be attributed to this uneven
claim frequency decline.
There has been a larger decline in the frequency of
smaller lost-time claims than in the frequency of
larger lost-time claims. This relatively larger decline
in the frequency of smaller claims adds two to three
points a year to the severity increases caused by
rising prices and expanding utilization.
Over the last five years, significant declines occurred
for all injury types, including permanent total and
permanent partial claims. The greater frequency
decline for smaller claims is evident within each injury
type, other than fatal, and for both indemnity and
Nearly all parts of body and nature of injury
categories experienced significant frequency
There appears to be little regional difference in
frequency changes by state. For example, western
states’ overall claim frequency declined by 23%, and
this is the largest regional decline over the five-year
period studied. While southeastern states had the
smallest overall frequency decline, they still had an
18% decline over that period.
The decline in frequency of workers compensation
claims spanned almost all occupations and all
The shift in occupational mix is a minor contributor to
the decline in claim frequency.