Delaware has approved a 3.99% average decrease in voluntary workers’ compensation loss costs and a 4.11% decrease in residual market rates, effective December 1, 2026, according to Insurance Journal’s October 22 report. It is the tenth consecutive annual reduction. The same report puts the 2025 decreases at 11.6% (voluntary) and 9.08% (residual market).
Most coverage will treat “tenth straight cut” as the milestone. For a reserving reader the more useful number is the change in the size of the cut: 3.99% is roughly one third of 11.6%. Prices are still falling, but the pace of decline has slowed sharply in a single filing.
What the filing does and does not say
Loss costs are the carrier-side starting point before expenses and profit, so a 3.99% decrease means the benchmark cost of a dollar of payroll in Delaware is still going down. The Insurance Journal article says the Delaware Compensation Rating Bureau filing was confirmed by independent actuaries and reviewed at a public hearing, and that actual savings vary by policy. It does not cite NCCI trend data, so this piece does not claim to know the filing’s underlying trend assumptions.
Do not mix in the safety discount. Senate Bill 248 restores access to the full 12% premium savings under the Workplace Safety Program, and 853 employers saved an estimated $3.6 million as of year-end 2025. That is a premium credit for completing inspections. It is not a change in expected loss cost, and it should not move an a priori.
Who it affects
Self-insured Delaware employers, captives with Delaware-domiciled workers’ compensation exposure, and multistate employers whose Delaware payroll sits in a retained program. Carrier-insured employers see the price change directly at December 1 renewal; self-insureds see it only indirectly, through benchmarks.
The reserve mechanism
The lever is the expected claim ratio (ECR) that feeds the Bornhuetter-Ferguson method for immature accident years. In B-F, the unreported share of the year is priced off the a priori, so a prior that drifts down each year quietly lowers IBNR on the newest years before any claims data can object. Many programs set that prior with reference to filed market trends; see the expected loss ratio method and the workers compensation IBNR guide.
Illustration (hypothetical, not Delaware data): a program that cut its a priori 11.6% for the 2025 renewal and a further 3.99% this year has lowered it by about 15% cumulatively (0.884 x 0.960 = 0.849). If the market cuts keep shrinking, a third consecutive reduction in the prior would be tracking a trend that has already bent.
The cross-state read supports caution but not a conclusion. Oklahoma’s 2027 loss cost decrease is 4.8%, a similar size to Delaware’s, though that article gives no prior-year figure to show whether it also shrank. Connecticut’s proposed 4.9% and New Hampshire’s streak point the same way: mid-single-digit cuts, not the double-digit ones of recent years. Florida’s ten rate cuts already raised the same question about severity.
Where this shows up in your reserves
Open the actuarial report’s B-F exhibit and find the a priori loss ratio or loss rate for the two latest accident years. Compare each year’s selection to the prior year’s, and note how much of any decrease was explained by your own emergence versus a market filing.
Our call
A shrinking cut is a directional signal, not a measurement of your claims. Our read: the 2026 and 2027 a priori selections should hold flat to the latest experience-based level rather than step down again, and a further market cut below roughly 4% next year would be no reason to trim. Confirm with your own paid and incurred emergence before any change.
What this means for your next review
Add one agenda item: ask whether the a priori for the latest two accident years followed the market down, and what weight your own experience gets against filing benchmarks. Ask what changes in the funding recommendation if next year’s Delaware cut shrinks again.