California workers’ compensation premium levels rose by 14% in 2022 due to the economic recovery from the pandemic-related downturn, according to the new Workers’ Compensation Insurance Rating Bureau of California’s 2023 State of the System Report.
The WCIRB report forecasts premiums to be above the pre-pandemic level in 2023 thanks to continued economic expansion and flattening insurer charged rates.
Other findings include:
- Claim frequency is generally returning to pre-pandemic levels. The frequency of non-COVID-19 indemnity claims was relatively flat in 2022, following sharp changes in 2020 and 2021 related to the pandemic.
- Average indemnity claim costs continued to increase, primarily driven by increasing average wage levels.
- California continues to experience longer average claim duration compared with other states, driven by slower claim reporting, lower settlement rates and higher frictional costs.
- With increasing premium levels and relatively stable claim frequency and severity trends, the accident year combined ratio decreased by 7 points to 105% in 2022.
The report highlights key metrics of the California workers’ comp system, including the latest trends on rates, market characteristics and profitability. The full report is on the WCIRB website.
Topics California Trends Workers' Compensation Pricing Trends
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