Workers’ Compensation Market Statistics 2026: NCCI’s State of the Line Combined Ratio and Rate Trends

The Headline Numbers Behind a Narrowing Underwriting Gain

NCCI’s 2026 State of the Line report put the workers’ compensation calendar-year combined ratio at 91 in 2025, up from 86 in 2024, a real and immediate deterioration even though the line stayed profitable on an underwriting basis. The accident-year 2025 combined ratio, a different measure focused on the year’s own claims rather than all open years combined, came in higher still at 102.

2025 marked the 12th consecutive year the calendar-year combined ratio measured below 100, meaning the line has posted an underwriting gain for over a decade straight. A rising combined ratio inside that streak signals the streak is narrowing, not that it has ended.

A Second Straight Year of a Shrinking Reserve Cushion

The industry’s redundant reserve position fell to $14 billion in 2025, down from $16 billion in 2024, the second consecutive year that cushion has shrunk. A redundant reserve is money already set aside beyond what current claims estimates require, effectively a buffer against the line performing worse than expected.

A shrinking buffer two years running is a different signal than a single bad year. It suggests carriers have less room than they did to absorb a genuine surprise in either claim frequency or severity before that surprise shows up directly in pricing.

Frequency Is Falling While Severity Climbs

Lost-time claim frequency declined 2% in 2025, continuing workers’ compensation’s long-running trend of fewer claims per exposure unit. Medical and indemnity claim severity moved the opposite direction, each rising 4% in the same year, meaning the claims that do happen are costing more even as fewer of them occur.

That combination, fewer but more expensive claims, is the specific pattern behind the combined ratio’s move from 86 to 91. A line can be getting objectively safer in frequency terms while still getting more expensive to underwrite, and 2025’s numbers are a direct example of both trends happening in the same year.

Construction’s Long, Steady Improvement

Construction-industry claim frequency has fallen nearly 40% since 2015, a decade-long improvement that sits apart from the year-over-year severity story above. That is a genuinely different time horizon and a genuinely different metric, a structural safety trend rather than a single-year fluctuation.

For a producer working construction-niche accounts specifically, a decade of steadily falling frequency in that class is a meaningfully different underwriting story than the industry-wide severity pressure covered elsewhere on this page, worth knowing before assuming every account in the class faces the same pricing pressure.

Why the Line Is Softening on Price and Tightening on Results at the Same Time

CIAB’s own Q2 2025 survey found workers’ compensation was one of five commercial lines to post an outright rate decline that quarter, alongside cyber, EPLI, terrorism, and D&O, even as the overall commercial market still averaged a 3.7% increase. That rate softening is happening in the same period NCCI’s own data shows a rising combined ratio and a second straight year of shrinking reserves.

Those two data points, one on price and one on underwriting result, are not contradictory, they describe two different sides of the same market. Rates responding to a decade-plus of favorable results can keep softening for a period even after the underlying combined ratio has started to tick back up, since pricing tends to lag claims data rather than move in lockstep with it.

The Numbers

Sources

The external data in this article draws on the sources below. Figures described in the text as estimates or industry triangulations are directional and are not attributed to a single dataset.

• Insurance Journal, NCCI: Workers’ Comp Calendar Year Combined Ratio at 91; Accident Year CR 102
• CIAB, Q2 2025 P&C Market Survey

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