Tennessee Sees Minimal Decrease in Workers’ Compensation Costs After Years of Stability

The average workers’ compensation rates for the Tennessee voluntary market are set to decrease by approximately 2% this year. This marks the 13^th consecutive year of declining rates in the state, although this year’s reduction is the smallest observed in recent times.

Tennessee Insurance Commissioner Lawrence highlighted the positive trend, stating, “Safer workplaces where Tennessee workers are receiving fewer injuries on the job are helping contribute to the latest loss-cost reduction.” He noted that these reductions reflect a healthier work environment for Tennesseans, stemming from a decrease in lost-time claim frequency and more stable claims costs.

The commissioner approved a 2% loss-cost decrease recommended by the National Council on Compensation Insurance in September. Additionally, he sanctioned a 1.1% average decrease in assigned risk rates for the state, as indicated in recent orders.

These reductions will take effect on March 1 and follow a series of previous decreases: a 3.6% average loss cost reduction for 2025, a 9.4% decrease for 2024, a 10.2% decrease in 2023, and a 5.6% decrease in 2022.

Across the nation, workers’ compensation rates have consistently fallen over the past two decades. However, many states experienced only minor reductions in 2025 and 2026. Research indicates that safer workplaces and a decline in litigated claims have led to fewer injuries and lower costs for both employers and insurers.

According to the 2024 Oregon Department of Consumer and Business Services, Tennessee ranked 39^th among states in average premiums, with rates significantly below the U.S. median. This represents a drop from 35^th place in 2022, positioning Tennessee as one of the states with the lowest compensation costs.

However, some claimants’ lawyers have expressed concerns that statutory changes made in 2018 and 2019 have reduced attorney fees, making it increasingly difficult for injured workers to secure representation when their claims are denied.

Additionally, voices from the industry, including roofing company associations in Florida, have raised alarms that the declining rates might lead to complacency regarding workplace safety. This situation has caused some insurers to reconsider writing compensation insurance for specific classifications.

Topics
Workers’ Compensation
Talent

The average workers’ compensation rates for the Tennessee voluntary market are set to decrease by approximately 2% this year. This marks the 13^th consecutive year of declining rates in the state, although this year’s reduction is the smallest observed in recent times.

Tennessee Insurance Commissioner Lawrence highlighted the positive trend, stating, “Safer workplaces where Tennessee workers are receiving fewer injuries on the job are helping contribute to the latest loss-cost reduction.” He noted that these reductions reflect a healthier work environment for Tennesseans, stemming from a decrease in lost-time claim frequency and more stable claims costs.

The commissioner approved a 2% loss-cost decrease recommended by the National Council on Compensation Insurance in September. Additionally, he sanctioned a 1.1% average decrease in assigned risk rates for the state, as indicated in recent orders.

These reductions will take effect on March 1 and follow a series of previous decreases: a 3.6% average loss cost reduction for 2025, a 9.4% decrease for 2024, a 10.2% decrease in 2023, and a 5.6% decrease in 2022.

Across the nation, workers’ compensation rates have consistently fallen over the past two decades. However, many states experienced only minor reductions in 2025 and 2026. Research indicates that safer workplaces and a decline in litigated claims have led to fewer injuries and lower costs for both employers and insurers.

According to the 2024 Oregon Department of Consumer and Business Services, Tennessee ranked 39^th among states in average premiums, with rates significantly below the U.S. median. This represents a drop from 35^th place in 2022, positioning Tennessee as one of the states with the lowest compensation costs.

However, some claimants’ lawyers have expressed concerns that statutory changes made in 2018 and 2019 have reduced attorney fees, making it increasingly difficult for injured workers to secure representation when their claims are denied.

Additionally, voices from the industry, including roofing company associations in Florida, have raised alarms that the declining rates might lead to complacency regarding workplace safety. This situation has caused some insurers to reconsider writing compensation insurance for specific classifications.

Topics
Workers’ Compensation
Talent