Issue 046November 2026Updated
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The WireWorkers Comp

Missouri Flat, Iowa -2.1%: 2027 WC Loss Cost Cuts Fade

Missouri's 2027 workers' compensation loss cost filing is 0.0% after -7.5% and -5.3% two and three years ago, and Iowa's proposed cut has shrunk from 7.2% to 2.1%. The filings show why: experience is no longer improving on its own, and the trend selections are being pulled toward zero. That is the same input a self-insured's a priori expected claim ratio leans on.

By Sam, EditorNovember 2026 · 6 min read

On November 4, the Missouri Department of Commerce and Insurance announced that NCCI’s 2027 workers’ compensation loss cost filing is rate-neutral at 0%. A day earlier, Oklahoma Insurance Commissioner Glen Mulready approved a 4.8% loss cost decrease for new and renewing policies effective January 1, 2027. In Iowa, NCCI’s filing letter dated August 19, 2026 proposes an overall change of -2.1% to voluntary and assigned risk rates for the same date.

Read one at a time, each is good news for employers. Read as a series, they extend what we flagged in Delaware’s shrinking tenth cut: the long run of annual decreases is losing size, and in Missouri it has stopped.

The trajectory, state by state

State202520262027
Missouri (loss costs, filed)-5.3%+1.3%0.0%
Iowa (rates, proposed)-7.2%-2.5%-2.1%
Oklahoma (loss costs)-9.2% approved-4.7% proposed-4.8% approved

Missouri’s figures come from the department’s independent actuarial review of the 2027 filing; the 2024 change, one year off the left edge of the table, was -7.5%. Iowa’s come from the Iowa Insurance Division’s 2025 notice and NCCI’s 2026 and 2027 filings. Oklahoma’s come from the department’s 2025 release and NCCI’s filing summaries for 2026 and 2027. We did not find the approved 2026 Oklahoma figure, so the table shows what NCCI proposed.

Two cautions on status. Missouri’s loss costs are advisory and the department’s release describes them as proposed. Iowa’s division lists an order for the January 1, 2027 filing, but we could not open the order document, so this piece treats -2.1% as the filed figure, not the approved one.

What is inside the flat numbers

The headline changes matter less than their components, because the components are what a reserving actuary borrows.

Missouri. The actuarial review breaks the 0.0% into parts: +0.1% from loss experience and development, +0.8% from trend selections, 0.0% from benefit changes, and -0.9% from everything else, including -0.2% from the loss adjustment expense provision. A year earlier the experience component was +1.2%. In other words, Missouri’s own policy year 2023 and 2024 data, valued at December 31, 2025, no longer argues for a lower benchmark at all. NCCI also moved the annual indemnity loss ratio trend from -3.0% to -2.5%, after moving it from -3.5% to -3.0% the year before. The department’s consultant, Actuarial Solutions, found the filing actuarially sound and recommended +0.2% instead of 0.0%.

One table in that review deserves a reserving reader’s attention. The paid indemnity development factor NCCI applied to the most recent policy year rose from 3.650 in the 2026 filing to 3.929 in the 2027 filing, a 7.6% increase, while the paid plus case factor was essentially unchanged (1.373 to 1.372). Indemnity dollars are being paid later relative to ultimate. The department’s release offers one candidate explanation: 35.2% of Missouri lost-time claims involved an attorney in 2025, against a 26.5% border-state average and 22.3% countrywide, and Director Angela Nelson called attorney involvement “an outsized cost-driver.”

Iowa. NCCI’s executive summary shows -3.7% from experience, +0.5% from development, -0.2% from trend and +1.3% from all other items, mostly expenses. The projected policy year loss ratios in Exhibit I are 0.944, 0.963, 0.965 and 0.967 for 2021 through 2024: favorable, but flat for four years, not falling. NCCI says so directly. It raised the indemnity trend from -4.5% to -4.0% “because the most recent policy year’s loss ratios exhibit less year-over-year improvement.” It moved the medical trend the other way, from -3.5% to -4.0%, which is why the net trend component is still a small decrease. The proposed cuts by industry group range from -5.5% for contracting to -0.6% for miscellaneous.

Oklahoma is the exception that sharpens the rule. Claim frequency fell 10.4% in policy year 2024, and NCCI widened the experience period to three policy years because 2023 showed above-average large loss severity. But the -4.8% is net of a 2.0% increase for the July 1, 2026 medical fee schedule and a 1.4% increase in the loss adjustment expense provision. If those pieces combine multiplicatively, as NCCI describes in its Iowa filing, the experience and trend portion is roughly -8% (0.952 / (1.020 x 1.014) = 0.920; our arithmetic, not an NCCI figure). Oklahoma’s underlying improvement is intact. What changed is that cost items now consume about three points of it, which is the medical reset we covered in the Oklahoma fee schedule piece.

The reserve mechanism

The lever is the a priori expected claim ratio in the Bornhuetter-Ferguson method. For an immature accident year, B-F sets IBNR as the a priori times exposure times the unreported share, so the prior does most of the work on the two newest years. Programs that set the prior by the expected loss ratio method often roll last year’s selection forward by the filed benchmark change.

Illustration (hypothetical program, actual Missouri filed changes): a prior indexed to Missouri loss costs fell to 0.887 of its 2023 level by 2026 (0.925 x 0.947 x 1.013). All of that decline was in place by 2025. A program that instead kept trimming by habit, say another 5% for accident year 2026, sits about 6% below the benchmark it claims to follow (0.95 / 1.013 = 0.938). Because B-F IBNR is proportional to the prior, a 6% gap in the prior is a 6% gap in that year’s IBNR.

The second-order effect is in the development pattern. Missouri’s paid indemnity factor moved 7.6% in one filing. A self-insured using paid chain ladder factors selected a few years ago will understate the percent unpaid for recent years if its own payout has slowed the same way, and B-F inherits that error through the unreported share. See the workers compensation IBNR guide.

The national backdrop agrees with the state filings. NCCI’s Oklahoma summary puts the calendar year 2025 combined ratio at 91%, up from 86% in 2024, with payroll up 4.8% and average wages up 4.3%. Our State of the Line read covered the accident year result, and actuary.info’s analysis of eroding redundancy reports an average decrease of 5.0% across approved 2025 to 2026 filings. Missouri at 0.0% and Iowa at -2.1% are well short of that average. Connecticut’s proposed 4.9% and Oklahoma’s 4.8% are near it; Oregon has already crossed to an increase.

Where this shows up in your reserves

Open the B-F exhibit and list the a priori loss rate for accident years 2024 through 2026 by state. For Missouri and Iowa payroll, mark any year where the selection dropped more than the filed change. Then compare your paid indemnity age-to-age factors for the latest three diagonals with the factors in use.

Our call

Frequency is still falling in all three states, so this is not a turn to rising cost. It is the end of the automatic step-down. Our read:

  • Missouri and Iowa: hold accident year 2026 and 2027 a priori selections flat to the latest experience-based level. With Missouri’s experience component at +0.1%, Iowa’s policy year loss ratios flat since 2022, and both indemnity trends raised half a point, we expect the January 1, 2028 filings, due in the second half of 2027, to land within a few points of zero in both states.
  • Oklahoma: a frequency-driven reduction in the prior is defensible, but apply it to frequency and load medical severity for the 2.0% fee schedule change. Do not take the full -4.8% and the pre-July medical basis together.
  • Adequacy: programs that trimmed Missouri priors for 2026 are the most likely to be light, by roughly the size of the trim, and the gap will surface in paid indemnity first, at the 24- and 36-month valuations in 2027 and 2028.

Confirm any change against your own paid and incurred emergence. A filing is a benchmark for an insured market, not a measurement of your claims.

Sources

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