Pricing Workers' Compensation Large Deductible and Excess Insurance

As the cost of Workers’ Compensation insurance coverage continues to rise, many employers are looking for alternative ways to fulfill this obligation. Two products stand our in particular. Large Dollar Deductible plan, and Excess WC insurance which covers excess loss exposure for a self-insurance program. Since these products are relatively new and are usually offered to large employers only, there have been few regulations on the pricing method. This paper presents the nature of the insurance coverage in each product, and discusses possible way of pricing them. This paper does not recommend specific pricing methods, but rather focuses on the cost drivers underlying each product, and explore ways to incorporate them in the price. Reinsurance Research - Pricing/Contract Design