SAIF declares two dividends, one based on premium and one tied to safety performance.
SAIF customers will receive $160 million in dividends this year.
Today the board of directors declared a $120 million primary dividend to be paid to policyholders based on their premium, and a $40 million safety performance dividend to be paid based on each policyholder’s safety results. This is the tenth year in a row SAIF has been able to offer dividends, and the 22nd dividend in the past 30 years.
“As a not-for-profit with a public mission to make workers’ comp available and affordable, paying dividends is an important part of the value we offer Oregon employers,” said Kerry Barnett, president and CEO of SAIF. “SAIF is the only insurance carrier in Oregon that regularly returns dividends to policyholders at this level.”
SAIF determines whether a policyholder dividend is appropriate based on capital levels, claim trends, and the overall economic environment. This year SAIF has seen strong investment returns and favorable trends in injury prevention and claim cost containment. The safety performance dividend rewards policyholders for their claims experience for policies whose annual term ended in 2018, based on a scale ranging from zero to 10.6% of their standard premium.
“Our vision is to make Oregon the safest and healthiest place to work,” said Barnett. “We appreciate our policyholders’ efforts to ensure their workers go home safely at the end of each day.”
48,508 policyholders are eligible for SAIF’s primary dividend. Of those, about 93.9% are also eligible to receive all or a portion of the additional safety performance dividend.
“In addition to dividends, we are proud to offer our customers some of the lowest rates, best-in-class service, and the largest network of workplace safety professionals of any insurance carrier in Oregon,” said Barnett. “Our goal is to deliver workers’ comp that really works.”
Checks will be mailed in October to eligible employers.
For the ninth year in a row, SAIF declares a substantial dividend for policyholders.
posted September 12, 2018
Today the SAIF board of directors declared two dividends for customers: a $120 million primary dividend to be paid to SAIF’s policyholders, and a $40 million safety performance dividend to be paid based on each policyholder’s safety results.
“We’re a not-for-profit insurance company. That means when we have a good year, we’re able to return premium directly to our customers in the form of a dividend,” said President and CEO Kerry Barnett. “We also want to give special recognition to customers with strong safety records. Preventing injuries through effective safety programs is the best way to keep rates low for everyone.”
This is the ninth year in a row SAIF has returned a substantial dividend to its customers. On average, eligible customers can expect to receive 28.6 percent of the premium paid in 2017. The dividends are possible because of SAIF’s overall financial results, including investment returns and favorable trends in claim costs.
In addition to dividends for SAIF’s policyholders, average workers’ compensation costs continue to fall for Oregon employers. Since 1990, Oregon has gone from having one of the worst workers’ compensation systems to one of the best. During that time, workplace safety has improved, and claims incidence have gone down 70 percent, with a similar percentage decrease in average pure premium rates.
“Think about your home, car, or life insurance-are any of those actually costing you 70 percent less than they did 30 years ago?” said Barnett. “Oregon has a real success story to tell, and we’re proud to be such a big part of it.”
47,488 policyholders are eligible for SAIF’s primary dividend. Of those, about 94 percent are also eligible to receive all or part of the additional safety performance dividend.
Checks will be mailed in October to eligible employers.
SAIF is Oregon’s not-for-profit workers’ compensation insurance company. Since 1914, we’ve been taking care of injured workers, helping people get back to work, and striving to make Oregon the safest and healthiest place to work. For more information, visit the About SAIF page on saif.com.
Salem, OR—Oregon employers next year, on average, will pay $1.12 per $100 of payroll for workers’ compensation insurance, down from $1.23 in 2018, under a proposal by the Oregon Department of Consumer and Business Services (DCBS). That figure covers workers’ compensation claims costs, assessments, and insurer profit and expenses.
This will mark the sixth year in a row that businesses will experience an average decrease in their workers’ compensation costs. Those costs have steadily declined over the years – even as workers continue to receive strong benefits – because of Oregon’s long-running success in managing the workers’ compensation system.
“Everyone from employers and workers to insurers and government has played a role in making workplaces safer and keeping business costs low,” said Cameron Smith, DCBS director. “As the numbers show, Oregon’s comprehensive approach continues to pay off.”
Part of Oregon’s success stems from efforts by the Workers’ Compensation Division. Those efforts include enforcing requirements that employers carry insurance for their workers, keeping medical costs under control, and helping injured workers return to work sooner and earn their pre-injury wages. Another part is Oregon OSHA’s focus on preventing on-the-job injuries by enforcing workplace safety and health rules, and advising employers about how to improve worker safety and health.
Employers’ cost for workers’ compensation insurance covers the pure premium and insurer profit and expenses, plus the premium assessment. Employers also pay the Workers’ Benefit Fund assessment, which is a cents-per-hour-worked rate.
The pure premium rate – filed by a national rate-setting organization and approved by DCBS – is the base rate insurers use to determine how much employers must pay for medical claims and lost wages. Under DCBS’s proposal for next year, the pure premium would drop by an average 9.7 percent. In fact, the pure premium will have declined by an average of 40 percent during the 2013 to 2019 period.
Pure premium is the key factor behind annual cost changes. The decrease is an average, so an individual employer may see a larger or smaller decrease, no change, or even an increase depending on the employer’s own industry, claims experience, and payroll. Also, pure premium does not take into account the varying expenses and profit of insurers.
Driving the average decrease in the pure premium are lower medical care costs and less severe claims. Underpinning the steady decline in pure premium are the successful efforts of the Workers’ Compensation Division, Oregon OSHA, the Workers’ Compensation Board – which resolves disputes over the state’s workers’ compensation and workplace safety laws – and injured worker and small business advocacy services.
Those programs are funded by the premium assessment.
The premium assessment is a percentage of the workers’ compensation insurance premium employers pay. It is added to the premium. It would increase from 7.4 percent this year to 7.8 percent in 2019. The increase is needed to partially offset the decline in pure premium and to keep pace with a growing economy. This modest increase maintains stable funding for state workers’ compensation regulation and worker protection programs that preserve historically low costs.
The Workers’ Benefit Fund assessment provides benefit increases to permanently disabled workers and to families of workers who died from a workplace injury or disease. It also supports Oregon’s efforts to help injured workers return to work sooner – through incentive programs to employers – and earn their pre-injury wages.
The fund’s revenue comes from a cents-per-hour-worked assessment. It would decrease from 2.8 cents per hour worked in 2018 to 2.4 cents per hour worked in 2019. The fund is healthy, made so by a growing economy, which allows the rate to be reduced.
The decrease in the pure premium is effective Jan. 1, 2019, but employers will see the changes when they renew their policies in 2019. The assessment changes are effective Jan. 1, 2019.
Oregon’s workers’ compensation premium rates have ranked low nationally for many years. Oregon had the seventh least expensive rates in 2016, according to a nationally recognized biennial study conducted by DCBS. That was an improvement from Oregon’s ranking as the ninth least expensive state the last time the study was done, in 2014.
The following chart summarizes all of the changes and includes the date, time, and place of the assessment public hearings: https://www.oregon.gov/DCBS/cost/Documents/wc-summ…
Annual Oregon average pure premium rate changes and average changes by industry: https://www.oregon.gov/DCBS/cost/Documents/pure-pr…
More information about Oregon workers’ compensation costs: http://www.oregon.gov/DCBS/cost/Pages/index.aspx
The Department of Consumer and Business Services is Oregon’s largest business regulatory and consumer protection agency. For more information, visit http://www.dcbs.oregon.gov/.
Aaron Corvin, public information officer
SAIF will return two dividends to its customers this year: one based on premium alone, and another based on safety performance.
Over the past 27 years, Oregon workplaces have driven down workers’ compensation claims frequency by more than 70 percent through their powerful focus on workplace safety-which, in turn, has reduced workers’ compensation rates by 71 percent.
After all, the least expensive injury is the one that never happens.
To recognize how Oregon workplaces are leading the way on safety, today the SAIF board of directors declared two dividends for customers: a $120 million primary dividend to be paid to all eligible policyholders based on their premium, and a $40 million safety performance dividend to be paid based on each policyholder’s safety results.
“Oregon employers and workers are the drivers behind one of the most successful workers’ compensation systems in the nation,” said President and CEO Kerry Barnett. “It’s only right that we recognize their efforts to develop strong safety cultures that reduce workplace injuries, which reduces costs.”
This is the eighth year in a row SAIF has returned a substantial dividend to its customers, and the second year for the safety performance dividend.
On average, eligible customers can expect to receive from 21 to 37 percent of the premium paid in 2016. The dividends are possible because of SAIF’s overall financial results, including investment returns and favorable trends in claim costs.
“Nothing is more important to Oregon’s economy than our workforce,” Barnett said. “Our customers have demonstrated a commitment to keeping workers safe and allowing them to avoid the pain and anguish of a workplace injury.”
More than 47,000 customers are eligible for SAIF’s primary dividend. Of those, about 94 percent are also eligible to receive all or part of the additional safety performance dividend.
Checks will be mailed in October to eligible employers.
SAIF is Oregon’s not-for-profit, state-chartered workers’ compensation insurance company. Since 1914 it has been caring for injured workers and helping to make workplaces safer. For more, visit the About SAIF page on saif.com.
Salem, OR—Oregon employers will see a key portion of their workers’ compensation costs drop by an average 6.6 percent in 2017, the Department of Consumer and Business Services (DCBS) announced today. This marks the fourth year in a row – and eighth year in the past decade – that businesses will experience an average decrease in the “pure premium.”
The average decrease in pure premium – the portion of the premium employers pay insurers to cover claims costs for job-related injuries and deaths – is part of a mixture of rate changes designed to invest in workplace safety and health programs while preserving historically low costs.
The other rate changes include:
• An increase in the premium assessment, which funds state costs of running workers’ compensation and workplace safety and health programs, from 6.2 percent to 6.8 percent. The increase is needed to invest in worker protection and related programs to keep pace with an expanding economy.
• A decrease in the payroll assessment, which supports the Workers’ Benefit Fund, from 3.3 cents per hour worked to 2.8 cents per hour. The fund pays for highly successful return-to-work and other special injured-worker programs. It is financially stable to the point that a reduction in the assessment is warranted.
The combination of the changes in pure premium rates and assessment rates is a net reduction in costs for the average employer. The average employer would pay $1.02 per $100 of payroll for claims costs and assessments, down from $1.10 in 2016.
“These rate changes preserve the integrity of our workers’ compensation system,” said Patrick Allen, DCBS director. “They do so by helping maintain a positive business climate for Oregon employers while also bolstering worker protections and benefits.”
The decrease in pure premium is based on a recommendation from the Florida-based National Council on Compensation Insurance Inc. (NCCI), which analyzes industry trends and prepares rate recommendations for the majority of states. Pure premium reflects only a portion of workers’ compensation costs, but is the key factor behind annual cost changes. The decrease is an average, so an individual employer may see a larger decrease, no change, or even an increase depending on the employer’s own industry, claims experience, and payroll. Also, pure premium does not take into account the varying expenses and profit of insurance companies.
The decrease in the pure premium is effective Jan. 1, 2017, but employers will see the changes when they renew their policies in 2017. The changes to the premium and payroll assessments are effective Jan. 1, 2017.
Workers’ compensation pays injured workers for lost wages and medical care for job-related injuries. A steady decline in average medical care costs and stable wage replacement costs are the key factors continuing to drive down the pure premium.
Oregon’s workers’ compensation premium rates have ranked low nationally for many years. Only seven states and the District of Columbia had average rates lower than Oregon in 2014, according to a biennial study conducted by DCBS. In contrast to changes made in some other states, Oregon has seen no meaningful reduction in worker benefits since at least the early 1990s.
*Public hearing set for Monday, Oct. 17, at 8:30 a.m. at the Labor and Industries Building, Room 260, in Salem.
**Public hearing set for Friday, Sept. 23, at 3 p.m., at the Labor and Industries Building, Room 260, in Salem.