What to Know About NCCI’s 2026 State of the Line Report

Every May, workers’ compensation professionals gather in Orlando for the National Council on Compensation Insurance (NCCI) Annual Insights Symposium (AIS), where the State of the Line report serves as one of the industry’s clearest annual benchmarks.

The State of the Line report offers more than a snapshot of industry performance — it provides context for how workers’ compensation costs, risk exposures, and long-term trends may evolve. While NCCI reports incredibly useful information, it is important to note that there are omissions in NCCI’s data, including  analytics relevant to self-insured employers — many of which are the largest insureds in the U.S. NCCI also does not collect data relevant to certain bureau states with significant exposure,

According to Mark Walls, Chief Marketing Officer at Safety National, “The AIS reports useful data, but the numbers are an average. For insureds, understanding your business type, industry, and the states where you operate can help you better interpret what this data means for your organization.”

With that in mind, several takeaways from this year’s report stand out for organizations trying to balance risk, control costs, and plan ahead.

Shrinking Premium

Workers’ compensation net written premium fell 0.2% in 2025, continuing a pattern that has been quietly building. Workers’ compensation was the only major property and casualty line to post a premium decrease in 2024, and the latest decline suggests that rate reductions are still outpacing payroll growth, shrinking the premium base despite evolving workforce exposure.

The declining premiums may reduce employers’ workers’ compensation costs in the short term but could also tighten margins across the insurance industry influencing underwriting discipline over time.

As a result, employers’ risk characteristics, claim history, and safety performance may be more heavily scrutinized. In turn, maintaining a strong safety record and clearly demonstrating risk management practices could play an even larger role in securing competitive pricing.

Decreasing Frequency

Lost time claim frequency decreased by 2% in 2025, continuing a long-running decline. That is a positive sign, suggesting fewer workers are missing time due to injury, likely because of ongoing improvements in safety, training, and automation. For employers, this influence could result in less reliance on temporary staff, lower training costs for new hires, and a more experienced workforce.

Although, the drivers behind this decline are not consistent across the market. Organizations should look beyond the averages and focus on their specific risk profile. Understanding where and why claims are declining can help identify gaps in safety programs and guide more targeted risk mitigation strategies.

Severity Pressures Persist

While lost time claims frequency declines, severity is moving in the opposite direction. In 2025, both medical and indemnity severity rose 4%, continuing a longer-term trend of increasing claim costs that has accelerated in recent years.

For insureds, higher severity can directly impact experience modifiers, long-term claims costs, and overall program performance. Medical inflation is one factor, but demographic shifts, such as an aging workforce and advances in care, are also contributing to more complex and costly claims.

This reinforces the importance of utilizing your carrier’s claim expertise. Insureds that partner closely with brokers, carriers, and TPAs to guide injured workers to appropriate care, such as specialized providers or Centers of Excellence, may be better positioned to manage outcomes and control costs over time.

What the National Numbers Miss

An addition to this year’s AIS agenda was a session on connecting themes that impact results across states. Walls emphasized that workers’ compensation has always been a state-by-state business, but the factors driving divergence between states are getting more layered.

Economic conditions, medical cost structures, workforce demographics, and regulatory environments all shape how trends play out at the state level.

For organizations operating across state lines, it is important to evaluate workers’ compensation performance in context, since strategies that work in one jurisdiction may not deliver the same results in another.

Organizations can make more informed decisions and better manage variability across their portfolio by working with their insurance carrier and broker to analyze state-specific data and align claims strategies accordingly.

To learn more, see the full State of the Line Report recording from NCCI’s AIS here.