Contingency Loading - New York Workmen's Compensation Insurance

The purpose of this paper is to outline the changes which were introduced this year in the method of determining the contingency loading for workmen's compensation insurance in New York State. A detailed explanation of the revised procedure will be of interest to those who wish to keep up-to-date on the ratemaking formula. Because of recurring underwriting losses in the compensation insurance business, the ratemaking program was revised in 1934 to include provision for a contingency loading in the rate structure. The purpose of the contingency loading is to ensure that, over a period of years, there will be neither an underwriting loss nor an underwriting profit on the business of each state.