Workers Compensation rates in Ohio and across the country are continuing the winning streak it has been on the past decade as the state is cutting rates by another 6% on July 1, 2025. When implemented, the rate cut is expected to save private employers $60.1 million.
The Ohio Bureau of Workers Compensation (BWC) has once again accumulated excess reserves due to investment gains and decreasing claims. BWC’s most recent financial report showed the State Insurance Fund with a “net position” of $7.3 billion and an asset/liability financial strength ratio of 1.55. The strong reserves are drawing scrutiny from lawmakers like Speaker Matt Huffman who is calling on the Bureau to refund the money to Ohio employers and consider lowering rates to appropriate levels.
The 6% cut would be the 6th straight reduction since Governor DeWine took office in 2019 and the 16th rate decrease in 17 years. According to BWC, “the average rate levels for the 257,000 private and public Ohio employers are at their lowest in over 60 years.” Across the US, the average combined loss ratio for workers’ compensation was 85.9%, while Ohio posted a slightly higher rate at 87.5%.
This marks the 7th consecutive year that the combined ratio has remained below 90%. Workers Compensation has led all lines of insurance the past few years and has been the one bright spot of profitability for insurance carriers during the hard market. Not long ago, workers’ compensation was a line of coverage insurance carriers avoided and only wrote out of necessity. In recent years it has become a coveted line of business that has helped offset heavy personal lines and property losses for carriers.
Unique Nature of Ohio’s Workers Compensation System
In Ohio, BWC is one of the largest state-run insurance systems in the United States, with nearly 1,600 employees and assets of approximately $22 billion. Ohio remains one of 4 monopolistic state-run workers compensation systems in the US. The other states include Washington, North Dakota and Wyoming.
Established in 1912, the Ohio BWC is the exclusive provider of workers’ compensation insurance in Ohio. Article II, Section 35 of the Ohio Constitution established, “For the purpose of providing compensation to workmen and their dependents, for death, injuries or occupational disease, occasioned in the course of such workmen’s employment, laws may be passed establishing a state fund to be created by compulsory contribution thereto by employers, and administered by the state, determining the terms and conditions upon which payment shall be made therefrom.”
The constitutional provision was last challenged at the ballot box in 1981 and lost 79% to 21%. Since that time, Ohio experienced some of the highest rates in the country in the 1980s and 90s but now is among the 3rd lowest in the country, according to various studies.
While Ohio independent agents cannot provide private coverage options for their Ohio commercial clients, they can enroll their clients in the OIA Group Rating and Retro programs. To learn more about this program, visit: OIA Workers Comp Group Programs or reach out to Jeff Smith at jeff@ohioinsuranceagents.com.
About the Author:
Jeffrey S. Smith, JD, CIC, CAE serves as Chief Executive Officer for Ohio Insurance Agents Association (OIA) and IA Valuations. He is responsible for leading the organization’s strategic initiatives and day-to-day operations.
As CEO of IA Valuations, Smith has consulted and reviewed over 200 agency valuations for independent agents across the US. IA Valuations serves independent agencies as a trusted advisor and strategic business partners as they implement strategies to increase their agency value, grow their businesses, and transition their agencies. Smith provides insights into the agency’s operations, risk factors, and legal guidance on how to perpetuate and maximize value in a sale.
