Workers' Compensation Premiums Declined in Q2 2026
Business owners may see varied pricing as carriers balance revenue losses from other lines against rising internal claim costs.
Updated on Oct. 5, 2026 in Employment
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National workers' compensation insurance premiums fell by an average of 3.2% in the second quarter of 2026. This drop marked the 18th consecutive quarter of decreases for the line, even as carriers face upward pressure on medical and indemnity claim costs.
Why it matters
Insurers are aggressively competing for profitable workers' compensation accounts to offset revenue shortfalls in the softening commercial property market. Operators should monitor their specific risk engineering metrics, as carriers attempt to maintain margins despite rising claim severity.
Private carriers reported a 91% calendar-year combined ratio for 2025, though the accident-year combined ratio reached 102%. This compares to a 2% decline in lost-time claim frequency against a 4% increase in both medical and indemnity claim severity.
The players
California
A state authority that regulates insurance pricing and approved advisory pure premium rates that are 6.6% higher than 2025 levels.
The details
Carriers are using workers' compensation to stabilize portfolios impacted by declining rates in commercial property, which fell 6.3% in the same period. While carriers seek to maintain revenue targets through pricing competition, rising loss costs create a push-pull dynamic. Brokers are increasingly evaluating account-specific performance to determine whether business qualifies for these broader downward pricing trends.
Timeline
2025: Private carriers achieved a 91% calendar-year combined ratio.
Q1 2026: Average charged rates were 6% higher than 2025 levels.
Q2 2026: Workers' compensation premiums declined by 3.2%.
September 1, 2026: California implemented advisory pure premium rates of $1.65 per $100 of payroll.
Market Landscape
The 18-quarter trend of national premium decreases reflects a long-running cycle of underwriting profitability in the sector. This persists despite California's move to raise advisory pure premium rates by 6.6% compared to 2025 levels.
Operators should review their loss history and risk engineering data before upcoming renewals to leverage current competitive pricing. Expect carriers to push for small, incremental rate increases in the near term as they manage the pressure from rising medical and indemnity claim costs.
The takeaway
While national premiums continue to soften, insurers are increasingly sensitive to account-level risk metrics due to rising severity in claims. Operators should prepare for potentially flat pricing moving forward and verify their safety data with brokers to maintain favorable coverage rates.
Further reading
For context on how labor costs impact your bottom line, visit Employment.
Source note: This article includes information reported by Insurance Business.
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