Good News: Aggregate Rates Remain Unchanged for 2026

The July 11 MCIT Board of Directors meeting included the annual rate analysis report delivered by MCIT’s long-term partner Actuarial Advisors, projecting next year’s rates for both the property/casualty and workers’ compensation divisions.

The analysis indicated maintaining aggregate rates at the current level for both property/casualty and workers’ compensation coverages. This comes after two consecutive years of rate increases in both divisions.

The setting of contribution rates is one of the most important decisions the MCIT Board makes influencing the bottom line of a member’s annual budget.

Aggregate rates reflect the net effect of rate changes to the individual lines of coverage included in the property/casualty line (i.e., auto, general liability, property, public employees liability, etc.) and each individual payroll classification code in the workers’ compensation line.

Past Property/Casualty Rate Changes Stabilized Division

Scott Anderson of Actuarial Advisors recommended that for the property/casualty division all individual lines of coverage should remain flat, not just the aggregate rate. He commented that the rate decisions taken by the board over the past several years helped stabilize the division, allowing the board to maintain rate consistency for the 2026 renewal.

With rates remaining flat, the contribution for a specific member entity will be influenced primarily by changes in its individual exposure base. For example, the cost of property coverage is based largely on the total value of a member’s covered property. If a member sees little change in those values from 2025 to 2026, the cost for property coverage in 2026 would be much in line with the current year.

However, if a member added significantly to the value of its covered property in 2025, perhaps with the addition of new buildings or renovations, the entity would see an increase in contribution but at the current rate level.

Property Value Changes Affect Cost of Coverage

It is important to keep in mind that this year, member property is subject to an inflationary adjustment in building values of 3.4 percent and contents values of 3.6 percent set by the MCIT board in June. Members participating in the final phase of the onsite building appraisal project, generally members located in the southern third of the state, will see building values adjusted due to that process.

The board takes these actions to ensure that member property is valued accurately in the event of a total loss and to position MCIT favorably for reinsurance marketing. With the property rate remaining flat, the impact of any increase in value will be held at the current 2025 rate.

Most Workers’ Compensation Classification Code Rates Remain Flat

By adopting Anderson’s recommended rate analysis of holding workers’ compensation rates flat in the aggregate for 2026, the net effect is general rate stability for the membership. Within this line of coverage, MCIT works with members to categorize payroll by position into approximately 30 different classification codes that align with each employee’s job duties.

Each code has its own rate that can fluctuate from year to year, depending on the amount of payroll assigned to it and the volume of claims arising from it. Well over half of these codes saw either no change or a reduction in rate for 2026.

Anderson reminded the board that by holding the aggregate rate level flat, a member’s contribution would be influenced by how much payroll it has in each classification code and whether the rate for that code increased, decreased or remained the same for 2026.

Workers’ compensation coverage is unique in that each member is assigned an experience modification factor that is reflective of its own claim activity, specifically, whether the member’s loss experience aligns with what is actuarially expected. That factor, when applied to a member’s standard contribution, has a direct effect on the cost of coverage for the specific member.

With rate decisions made, MCIT staff is working to calculate and validate each member’s estimated contribution for next year. Notices will be issued to members by mid-August pursuant to the MCIT Bylaws. Questions regarding 2026 contributions should be directed to MCIT underwriting at 1.866.547.6516.