Workers' Compensation: A Dozen Years, No Hike

New Jersey’s proposed 2027 rate filing would extend the state’s run of workers’ compensation rate reductions to a twelfth straight year, even as the annual cut continues to shrink.

On September 23, 2026, the New Jersey Compensation Rating and Inspection Bureau (NJCRIB) issued Circular No. 2527, notifying member carriers that it had filed with the New Jersey Department of Banking and Insurance for a 1.3 percent reduction in the overall workers’ compensation premium and rate level, effective January 1, 2027. If approved as filed, next year would mark, in NJCRIB’s own words, “the twelfth year in a row without an increase.”

For a line of insurance that raised rates as recently as 2015, that streak is remarkable. On close inspection, it is also decelerating. The 1.3 percent figure now pending is the smallest reduction NJCRIB has proposed since the current cycle began, a fraction of the 6.9 percent cut approved for 2025 or the 6.1 percent cut approved for 2023. For employers, carriers, and the lawyers and judges who work inside the system every day, the size of that deceleration may matter more than the headline “twelfth year” itself.

Twelve Years in Context

The table below traces the overall rate and rating value change NJCRIB has filed, and the Department of Banking and Insurance has approved, for each year since the last rate increase.

The cumulative effect is dramatic even where any single year looks modest. NJCRIB’s own 2025 Annual Report, discussed in “NJ Workers’ Compensation: Profit Surge”, puts the weighted average manual rate, in effect the average price of a unit of workers’ compensation coverage per $100 of payroll, at $2.15 in 2017 and $1.43 for 2026, a decline of roughly a third in nine years. If the 2027 filing is approved, that figure falls again.

Set Against the National Trend

New Jersey’s trajectory tracks a countrywide pattern more than a purely local one. NCCI’s 2026 State of the Line Guide found that approved bureau loss cost and rate filings nationwide are expected to reduce written premiums by an average of 5.0 percent from 2025 to 2026, with state filings ranging from roughly a 15.6 percent decrease to a 21.6 percent increase in Nevada, an outlier tied to a change in that state’s payroll cap rather than underlying loss trends, according to Risk & Insurance. Workers’ compensation posted a 91 percent calendar year combined ratio nationally in 2025, even as claim frequency growth moderated to a 2 percent decline and both medical and indemnity severity accelerated, each rising 4 percent for the year.

New Jersey’s numbers tell a similar story, but at a closer range. The state’s combined ratio was an exceptional 80.3 in 2023, moved to 94.0 in 2024 as losses caught up with premium, and NJCRIB’s voluntary market loss ratio for Policy Year 2024 stood at just 31.5 percent. A combined ratio moving from 80 toward 100, alongside a rate filing that has shrunk from nearly 7 percent to just over 1 percent, points toward a market approaching equilibrium rather than one still searching for a bottom.

What This Means for Workers’ Compensation Claims

The rate cycle is not simply an actuarial curiosity. It reflects, and in turn shapes, the claims environment that injured workers, employers, and practitioners navigate every day.

Declining frequency has been the dominant driver. NJCRIB measures lost-time claims per $1 million of premium, and that figure fell from 9.6 in 2014 to 7.1 in 2023, a 26 percent decline attributable to safety programs, ergonomics, modified-duty programs, and a shift in New Jersey’s economy away from higher-hazard manufacturing work. Fewer claims entering the system is the single largest reason carriers have been able to file for reductions for as long as they have.

Severity has not followed the same path. The average lost-time claim in CY 2025 cost approximately $54,000, and the medical share of total losses has climbed steadily, from 48.7 percent at the fifth report for Policy Year 2013 to 56.9 percent for Policy Year 2023. As medical costs consume a growing share of every claim dollar, disputes over treatment authorization, choice of physician, and medical necessity, governed by the injured worker’s statutory right to medical treatment under N.J.S.A. 34:15-15, are becoming more central to case value and more likely to be contested.

The claims that remain in the system also skew more complex. NJCRIB’s loss data for Policy Year 2023 show multiple-body-part injuries topping the list of claim types by total dollars incurred at 13.51 percent, ahead of shoulder and lower-back injuries at 12.72 percent each. Fewer, more complicated claims mean more litigation-intensive files even as overall claim counts decline, a dynamic practitioners have already been living with.

A narrowing rate reduction, from 6.9 percent for 2025 to 4.3 percent for 2026 to a proposed 1.3 percent for 2027, is itself informative. It suggests carriers and the Bureau see the easy gains from declining frequency as largely realized, and it raises the practical question of whether the twelve-year run of reductions is nearing its end. If claims severity, driven by medical inflation, continues to outpace the savings from lower frequency, New Jersey’s next rate filing could look very different from its last twelve.

What Each Stakeholder Should Watch

Employers have banked meaningful savings from a premium base that has fallen by roughly a third since 2017, and most continue to find coverage in a voluntary market that now holds 97 percent of the state’s approximately 327,000 policies, leaving the assigned-risk residual market at just 2.9 percent of premium.

Injured workers have seen the maximum weekly benefit, set under the statutory formula in N.J.S.A. 34:15-12, rise from $871 in 2016 to $1,199 in 2026, an increase of roughly 38 percent over a decade that has not kept pace with the roughly one-third decline in the price of coverage over the same period, particularly against a medical cost share of losses that keeps climbing.

Practitioners and the Division of Workers’ Compensation should expect the caseload to keep shifting toward fewer, costlier, and more medically complex files, exactly the kind of claims where rigorous medical documentation and competent representation carry the most weight.

Carriers, having enjoyed a decade of favorable combined ratios, are watching the same signal the rest of the market is: a 2024 combined ratio of 94.0, up sharply from 80.3 the year before, and a 2027 filing that is a fraction of the cuts that preceded it.

Conclusion

Circular No. 2527 is, on its face, good news for New Jersey employers: a twelfth consecutive year without a rate increase. But the shrinking size of the reduction, set against a combined ratio moving toward equilibrium and a claims mix trending toward more severe, more medically complex cases, suggests the extraordinary rate relief of the past decade may be approaching its limit. The Department of Banking and Insurance’s action on the 1.3 percent filing, expected before the end of 2026, will be worth watching closely.

Recommended Citation

Jon L. Gelman, “A Dozen Years, No Hike: New Jersey’s 2027 Workers’ Compensation Rate Filing in Context,” Workers’ Compensation Law Blog (Sept. 23, 2026), https://workers-compensation.blogspot.com/.

Sources

NJCRIB, Circular No. 2527, “NJCRIB Submits Filing for January 1, 2027 Revision of Rates” (Sept. 23, 2026).

NJCRIB, Circular No. 2510, “Revised Rates, Rating Values and Manual Changes Effective January 1, 2026” (Oct. 29, 2025).

WorkCompWire, “NJCRIB: Commissioner Approves 6.9% Decrease in Rates and Rating Values” (Nov. 14, 2024).

Insurance Journal, “New Jersey Workers’ Compensation Rates to Fall 3.9% for 2024” (Nov. 28, 2023).

PIA Northeast News, “N.J.: 2023 WC overall rate level decreases 6.1%”.

PIA Northeast News, “N.J.: 2022 WC overall rate level decreases 5.3%”.

EY, “New Jersey agency requests decrease in workers’ compensation rates for 2019” (Oct. 23, 2018).

Business Insurance, “New Jersey approves workers comp rate decrease” (Nov. 28, 2017).

Insurance Journal, “New Jersey Approves 2.9% Increase in Workers’ Comp Rates, Rating Values” (Nov. 18, 2014).

Jon L. Gelman, “NJ Workers’ Compensation: Profit Surge”, Workers’ Compensation Law Blog (May 23, 2026).

NCCI, 2026 State of the Line Guide.