INDIANAPOLIS (AP) — The Indiana Department of Insurance says lower workers’ compensation rates paid by businesses will take effect Jan. 1.

The agency said Wednesday the recently approved reduction averages 7.6 percent and will save businesses about $63 million.

The agency says Indiana workers’ compensation rates have been on a downward trend for several years because of fewer worker injuries. It says growing Indiana payrolls create a larger base for collecting premiums, and that also contributes to the lower rates.

Workers’ compensation insurance covers medical costs associated with workplace injuries and provides wage replacement benefits to injured workers for lost work time.