December 15, 2017

CA WCIRB Releases Report on Q2 2013 Insurer Experience

San Francisco, CA – The WCIRB recently completed its report on June 30, 2013 insurer loss and premium experience. Among the report’s major findings are a 21% increase in written premium for the first half of 2013 compared to the first half of 2012, an approximate 10% increase in the industry average charged rate since the second half of 2012, and a 6.2% increase in indemnity claim frequency in 2013 compared to 2012.

Other findings of the report include:

  • The WCIRB projects indemnity claim frequency for accident year 2012 to be 3.3% above the frequency for 2011 and 8.1% above the frequency for 2009. The projected indemnity claim frequency for the first six months of 2013 is 6.2% higher than that for 2012. Projected indemnity claim frequency for accident years 2012 and 2013 increased markedly from previous estimates as a result of an increased number of indemnity claims reported in the second quarter of 2013. While projected indemnity claim frequency has remained at its higher level following the sharp 2010 increase rather than return to the historical long-term decline, the preliminary 2013 frequency remains approximately 30% below the indemnity claim frequency experienced prior to the 2002 through 2004 reforms.
  • The WCIRB projects the average loss and ALAE cost (or “severity”) of a 2012 indemnity claim to be approximately $84,500, which is comparable to the projected severity for accident year 2011 and slightly above the projected severities for accident years 2009 and 2010. The projected 2012 average loss and ALAE severity reflects an increase of approximately $30,000 (or more than 50%) since the full implementation in 2005 of the reforms of 2002 through 2004.
  • The WCIRB projects total ultimate losses and allocated loss adjustment expense (ALAE) for accident year 2012 to be $11.4 billion. While approximately 6% above the projection for accident year 2011 and 20% above the projection for accident year 2009, it is approximately 17% below the highs experienced prior to the 2002 through 2004 reforms.
  • The WCIRB projects an ultimate accident year loss and ALAE ratio of 94.4% for accident year 2012. While this projection has increased from previous estimates as a result of increased loss development experienced in the second quarter of 2013, it remains significantly below that of the prior three accident years as a result of increasing premium levels and modest claim cost trends in 2012.
  • The WCIRB projects an ultimate accident year combined loss and expense ratio of 120% for accident year 2012. This projection is below that of the prior three accident years primarily as a result of increasing premium levels, modest claim cost trends, and lower insurer expense ratios in 2012.
  • The WCIRB currently projects the total statewide ultimate losses on all injuries that occurred on or before December 31, 2012 to be approximately $4.8 billion more than the amounts reported by insurers. This has increased from previous estimates as a result of increased loss development and frequency projections.
  • The full report is available here: CA WCIRB Releases Report on Q2 2013 Insurer Experience (PDF)

    Source: CA WCIRB

  • RSS
  • Twitter
  • LinkedIn