California 2008 Workers’ Comp Premiums Written Decrease 20%

The Workers’ Compensation Insurance Rating Bureau of California has published its summary of insurer experience reported up to Dec. 31, 2008.

California written premium for 2008 is estimated at approximately $10.4 billion, about 20 percent below the written premium reported for 2007, and 56 percent below 2004 figures. The average statewide insurer rate per $100 of payroll for policies written in 2008 is $2.25, or 9 percent below the average rate charged in the second six months of 2007. The calendar period loss ratio reported for 2008 is 59 percent. This ratio is 6 percentage points above the calendar year 2007 ratio, and 14 percentage points above the 2006, the report stated.

According to WCIRB, the Workers’ Compensation Appeals Board recently “issued two en banc decisions that have the potential to significantly increase costs — including those on existing claims. The WCIRB has reflected the estimated cost impact of these decisions on existing claims and incorporated those estimates in the projected ultimate cost amounts reported … the estimated cost impact of these decisions was tempered by assuming a 25 percent increase instead of a 100 percent increase in the average permanent disability rating of affected permanent disability claims; a 25 percent increase instead of a 100 percent increase in the average frictional costs on PD claims affected by the WCAB decisions; and a 6.25 percent increase instead of a 25 percent increase in the proportion of lost-time claims involving PD.”

After reflecting the estimated impact of those decisions, WCIRB projects the total ultimate accident year losses for 2008 will be $7.7 billion, 20 percent above the 2005 level.

To view the report, visit www.wcirbonline.org.

Topics California Trends Workers' Compensation Pricing Trends