As a former staffing company owner, I would look at my annual work comp rate increases and immediately think about my workers compensation claims and how they affected my rates. But rates reflect a combination of micro and macro events in our world.
To be sure, my firm’s safety record was very important; but the profitability of the entire insurance industry also impacted my workers compensation (as well as my other business insurance) rates.
For example, if the insurance industry finds that it is not making enough money for it’s investors, it may hike your premiums to increase returns for its shareholders — regardless of your particular work comp loss history. Or if significant natural disasters happen like Katrina, Irene, and now Sandy, where the industry has to make huge payouts to policy holders, you might find your rates increasing to cover these payouts.
Below is an excellent short article that discusses these issues. I recommend it and ask that we all begin to think about how Sandy (now expected to top 25B in insurance related losses) may affect rates for years to come.
All the best
David Schek
President
StaffingCompSolutions.com
American Staffing Association Member
California Staffing Association Member
Exclusive PEO Broker for the United States Staffing Association