Loss Development and Medical Trends Drive 5.3% Reduction in Loss Costs

Improving medical trends and loss-development experience offset higher benefits due to increases in Oregon's average weekly wage, leading the National Council on Compensation Insurance to recommend the 5.3% reduction in loss costs that was approved in September. Indemnity claim severity increased 2.1% to $13,500 in policy year 2012 from $13,200 in 2011 and $13,100 in 2010, according to NCCI's 2014 State Advisory Forum for Oregon. Even after accounting for the increases, the average indemnity claim cost in Oregon has remained about 40% lower than the countrywide average. The proje...