California Workers’ Comp Report Shows ‘Relatively Stable’ System Post-Pandemic

The California workers’ compensation system has been relatively stable in the post-pandemic era, as premium levels rose by 1% in 2023 and are forecast to increase modestly in 2024—while decreases in average insurer charged rates are moderating, a new report shows.

The Workers’ Compensation Insurance Rating Bureau of California released its 2024 State of the System report.

Findings in the WCIRB report include:

• Claim frequency changes in 2022 and 2023 were modest and consistent with pre-pandemic trends. The share of indemnity claims involving permanent disability declined, but there are signs that the share of indemnity claims involving cumulative trauma is rising.
• Average indemnity costs continue to increase, primarily driven by increasing average wage levels. Average medical costs are also increasing, driven by claims remaining open longer post-pandemic and inflationary updates to medical fee schedules.
• California continues to experience longer average claim duration compared with other states, driven by slower claim reporting and higher frictional costs.
• The projected accident year combined ratio increased by 2 points to 111% in 2023, the fourth consecutive year of a combined ratio above 100%. Combined ratios in California continue to be above those for the rest of the country.

Visit the Research Studies and Reports: State of the System page on the WCIRB website to access the report.

Topics California Workers' Compensation COVID-19