Ratemaking for Excess Workers Compensation

The market for Excess Workers Compensation in the United States has grown rapidly over the last two decades. These are estimates that the annual premium volume in the excess $500,000 attachment segment of this market is now in excess of $1 billion. This paper presents a method of estimating rates for this type of coverage. The method generates loss distribution of the total cost of individual large claims, Medical costs are estimated form data samples. Indemnity costs, however, are for the most part estimated from the benefits mandated in the Workers Compensation statutes.