Written premium in calendar year 2023 was 2% higher than the prior year, driven by continued economic expansion, but partially offset by continued rate decreases, a new report shows.
The Workers’ Compensation Insurance Rating Bureau of California on Wednesday released its quarterly experience teport, which is an update on statewide insurer experience valued as of Dec. 31, 2023.
The average of the approved Sept. 1, 2023, advisory pure premium rates was 2.6% lower than the average of the existing rates. Since 2015, the insurance commissioner has approved 12 advisory pure premium rate decreases totaling more than 50%, the report shows.
The WCIRB proposed a 0.9% advisory pure premium rate increase for Sept. 1, 2024.
“After five consecutive increases, the projected loss ratio, including the cost of COVID-19 claims, dropped 2 points in accident year 2022, driven by a significant increase in premium due to higher payrolls and very modest changes in claim frequency and severity,” the report states. “The accident year 2023 loss ratio is modestly higher than 2022, driven by the declining impact of COVID-19 claims and generally flat claim frequency and severity trends.”
The report shows indemnity claims had been settling more quickly through the first quarter of 2020, primarily driven by workers’ comp reforms.
Projected severity on indemnity claims for 2023 is 3% higher than 2022. The average severity in 2023 was the highest it has been in more than a decade, since before the reforms, according to the report.
Highlights of the report include:
- Written premium in 2023 was slightly higher than 2022 and at roughly the pre-pandemic level.
- The average charged rate for 2023 continues to decrease: it’s 5% lower than 2022 and the lowest in decades.
- The projected combined ratio for accident year 2023 is 2 points higher than in 2022 and is the fourth straight year of a combined ratio above 100%.
Topics California Trends Workers' Compensation Pricing Trends
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