There is no question that 2022 is yet another extraordinary year. What many thought would be a year of recovery and increased stability has proved to be something else entirely. Economic volatility and the evolution of the pandemic continue to challenge businesses and communities. We nevertheless remain hopeful for the future and embrace each day by listening and following the data wherever it may lead while providing our stakeholders with the services, research, and tools that they have come to rely on. I am proud to report that we are well positioned to continue this work and provide value to the workers’ compensation community.
Over the past several years, we reshaped our operations, reset our strategy, and built relationships while making significant investments in technology and talent. These efforts made our transition to two years of fully remote work not only possible but also a success. But we know that there is value in working together in the same space, and this is especially true for the Rating Board – a learning organization transitioning to a new culture and fulfilling a new vision. So, in April of 2022, after two years of being apart, we implemented a hybrid work policy, which provides our team with a balance of remote and in-person work that allows both work and personal lives to thrive.
During this period of change and transition, we have stayed true to our vision – to serve as the objective, trusted, thought-leader in the marketplace – knowing that being transparent, honest, and acting with integrity is the only way forward. This means that our work is always grounded in data, not opinion or guesswork. If we say, “we can’t answer that because it’s not in our data,” we do so because it is true, not because it is easy.
In addition, we continued to shed light on the workers’ compensation system in New York State. The 2022 State of the System Report provides the latest marketplace insights and trends, and this year, it contains something new – a look back at results from prior years for a unique 30,000 foot view of the workers’ compensation insurance cycle in New York State.
In addition, our 2022 Loss Development Study examines some of the most significant drivers of loss cost level changes in recent history. We are proud of our expanding body of research and studies, which provide a deeper understanding of important trends impacting the marketplace.
With this mindset, and after years of research, we have redesigned actuarial methodologies that go to the core of our mandate, and on October 1, 2022, our new experience rating program will go into effect.
The new program design strikes the appropriate balance between accuracy, stability, and equity while also incentivizing workplace safety. To help our stakeholders navigate the new program, we published educational materials and developed and released a Mod Estimator application, which provides insight into upcoming experience modification factors.
Our research studies enhance our insight into our ratemaking methodology and annual loss cost filing. So, it should be no surprise that our transition to our current methodology began with a research request from our Board of Governors: research methods that bring additional stability to the loss cost level in the State. Following significant study and investigation into different methods, a new, more stable methodology was approved. We applied this methodology in the spring of 2020, 2021, and 2022 and will remain faithful to it for the foreseeable future. I am happy to report that in July of 2022, the New York State Department of Financial Services approved the Rating Board’s actuarially recommended loss cost level change. The overall loss cost level in New York State will decrease by 8.7% on October 1, 2022.
As the world continues to change around us, our team is working with our regulators to ensure that the workers’ compensation system in New York reflects our new reality and is prepared to adapt to upcoming change. Our Underwriting Services and Actuarial teams are working together to examine our classification system, ensuring that our class code structure is predictive, credible, and in alignment with other jurisdictions when possible. Further, our Actuarial Research team continues to make progress on its multi-year research effort to enhance the Rating Board’s class ratemaking methodology.
As always, I am filled with a sense of gratitude and pride about the Rating Board, and I am thankful for the support and involvement of our membership and stakeholders. I wish you all health and happiness as we continue our work together.