The League of Minnesota Cities Insurance Trust Board of Trustees evaluates loss projections every year to ensure premium rates are adequately set to respond to future claims. If estimates and members’ losses are better than projected, the additional savings can be returned to members (learn more about the dividend being returned for 2023) or added to the Trust’s fund balance for the purpose of saving money for members in other ways, such as the Trust retaining more risk.

The following provides information about premium rates going into effect for property/casualty coverages renewing on or after Nov. 15, 2023, and for workers’ compensation coverages renewing on or after Jan. 1, 2024.

Property/casualty rates

What does property/casualty coverage include?

Coverage is tailored specifically for Minnesota cities and related entities like housing and redevelopment authorities, joint powers organizations, and other special districts and instrumentalities. It’s broader than commercial policies and includes coverage for property losses, bond, comprehensive municipal liability, auto, cyber-related claims, liquor liability, and much more.

Learn more about the types of entities that can participate in the Trust.

How does the Trust set rates?

Rates are set at a level to generate enough premium to cover:

  • Expected claim costs for the year based on actuaries’ calculations.
  • A contingency margin to protect the Trust and its members from the possibility that losses will be higher than expected.
  • Projected administrative expenses.

What are property/casualty rates for 2024?

Rates will decrease by an average of 0.75%. The following list includes specific rate changes by coverage area.

  • Liability rates will decrease by an average of 6%. That consists of:
    • A 10% decrease in employment liability rates.
    • A 15% decrease in sewer backup liability rates.
    • An 11% decrease in annual expenditure-based rates for cities.
    • No rate changes for police liability, land use litigation, or annual expenditure-based rates for special purpose entities.
  • Auto physical damage rates will increase 10%.
  • Auto liability rates will increase 5%.
  • Excess liability (optional coverage) rates will increase 3%.
  • No rate changes for property or other coverages.

What about other variables?

Premiums will also be affected by factors such as a member’s changes in expenditures, property values, payroll, experience ratings, and others. Contact the Trust’s underwriting staff for questions about member-specific rates.

Connect with underwriters (choose “Underwriting” under “Department”).

Why are rates changing?

The Trust works with an actuary to help project future claim costs, which in turn drives premium rates. Here’s what is happening in the property/casualty program:

  • There will be no rate change for property coverage, including mobile property, because projected loss costs are stable.
  • The varying decreases in liability rates will better align projected liability premiums with actual loss costs.
  • Auto rates are increasing because of increased loss patterns and, like the private market, inflationary pressure.
  • The 3% rate increase for excess liability is due to increased rates from the Trust’s reinsurer for that line of coverage.

Members can view their losses in the LMCIT Member Center. Contact Senior Business Analyst Lena Gould at [email protected] or (651) 281-1245 to learn more about Trust members’ loss patterns as a whole.

Workers’ compensation rates

What is workers’ compensation coverage?

Workers’ compensation provides coverage for members that have employees who are injured while in the course and scope of employment.

How does the Trust set rates?

Rates are set at a level to generate enough premium to cover:

  • Expected claim costs for the year based on actuaries’ calculations.
  • A contingency margin to protect the Trust and its members from the possibility that losses will be higher than expected.
  • Projected administrative expenses for the program.

What are the rate changes for 2024?

Rates will decrease by an average of 15%.

What about other variables?

Premiums will also be affected by factors like changes in a member’s expenditures, payrolls, experience rating, and other exposure measures. Members and agents can contact their underwriter for member-specific details.

Learn how experience ratings are used to adjust members’ future premiums.

Connect with underwriters (choose “Underwriting” under “Department”).

Why are rates changing?

The primary reason for the 15% rate decrease is because the development on members’ claim experience was favorable in 2022 and 2023, both on new claims received by the Trust and on case reserves for claims occurring prior to June 30, 2022.

In recent years the Trust has communicated with members about the impact of post-traumatic stress disorder (PTSD) claims for public safety on the Trust’s workers’ compensation program. Premium rate increases have been necessary because these claims became a significant portion of the Trust’s costs claim patterns; however, both PTSD and non-PTSD claims have changed the course of future claim projections, at least for 2024.

Whether and how PTSD, other types of claims, or legislative changes will affect workers’ compensation rates in the future is impossible to know with certainty. There’s inherent unpredictability in managing risk and knowing the cost of future claims. The Trust evaluates claim patterns through data analyses and actuarial projections to set premium rates as responsibly as possible. The Trust also has programs, services, and staff available to help members control all types of claims — from back injuries to land use and everything in between.

Learn more about the new public safety duty disability law aimed at curbing the number of public safety employees leaving their professions because of mental injuries.

Learn more about the Trust’s loss control programs.

Members can view their losses in the LMCIT Member Center. Contact Senior Business Analyst Lena Gould at [email protected] or (651) 281-1245 to learn more about Trust members’ loss patterns as a whole.

Are there any other changes we should be aware of?

Nonsmoker credit: There is a discount in the workers’ compensation rate for firefighters and police officers if members can assert 90% of their departments are nonsmokers. The rate credit will decrease from 10% to 5% because a recent evaluation shows members with “nonsmoking” departments have worse claim experience than “smoking” departments. Because of this, the nonsmoking credit will be phased out and discontinued on Jan. 1, 2025.

Experience rating: A few minor, primarily technical changes will be made to the Trust’s experience rating formula for 2024 to align with revised industry standards.

Learn more about experience rating or contact Underwriting Manager Liam Biever at [email protected] or (651) 281-1212 to learn more about the specifics.