Which factor is NOT considered when estimating the annual premium for a WC policy?

The average premium of insureds in the same area working in the same industry is not typically a direct factor in estimating the annual premium for a workers' compensation (WC) policy for an individual employer. While it is true that industry averages can provide context and benchmarks, the specific premium calculation for a company is more closely based on unique factors like the size of the workforce, the claims history, and the job classifications of the employees.

The size of the employer's workforce directly affects premium calculations because larger workforces may lead to a higher total exposure to risk. Similarly, the extent and nature of claims history are critical, as a pattern of frequent claims can significantly increase premiums due to the perceived higher risk. Job classifications also play a significant role since different types of jobs carry different levels of risk, thus influencing the premium amount.

In summary, while industry averages are useful for giving a sense of general premium trends, the individual characteristics of the employer present more direct and influential factors in determining the WC policy premium.