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Research and Statistics -- DLI statistics appendix

Benefit costs per $100 of covered payroll

This figure uses data from insurer financial reports, supplied by the Minnesota Workers' Compensation Insurers Association (MWCIA). The financial reports, which cover only the voluntary market, provide different measures of premium and of indemnity and medical losses by accident year and policy year. Updates are provided through a series of annual reports for each accident year and policy year.

Following the procedure in MWCIA's Ratemaking Report, the numbers are based on paid losses, since these are more stable than incurred losses, which include reserves. Paid losses are developed to an eighth-report basis using the selected development factors in the 2003 Ratemaking Report and are then converted to an incurred basis using the selected ratios of paid to incurred losses at eighth report, from the Ratemaking Reports of different years. The resulting figures, thus, represent incurred losses at eighth report. Payroll data is from insurer reports about policy experience, which include the Assigned Risk Plan. The MWCIA supplies payroll for the voluntary market only, for comparability with the financial report data. Because the payroll data is by policy year, averages are taken between appropriate policy-years for use with accident-year loss-data.

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