San Francisco, CA – The WCIRB has completed its report on insurer loss and premium experience through December 31, 2012. The major findings of the report include:
- Statewide written premium (gross of deductible credits) for 2012 is $12.5 billion. This is $1.7 billion or (16%) above the 2011 year and the highest since 2007. The 2012 premium increase was driven primarily by higher rates and growth in statewide payroll levels.
- The industry average charged rate for the second half of 2012 was $2.60 per $100 of payroll. This is 12% higher than for 2011 and 24% above the 2009 low of $2.10. Despite the recent increase, the average charged rate for the second half of 2012 is almost 60% below the pre-reform high of $6.29 in the second half of 2003.
- The preliminary estimated combined loss and expense ratio for accident year 2012 is 127%. While still above long-term historical norms, this 2012 ratio reflects an improvement of approximately 10 percentage points from the prior three accident year. This improvement is due to increased premium levels, moderation of claim severity trends and the estimated impact of Senate Bill 863 on outstanding claims as of December 31, 2012.
- Estimated indemnity claim frequency for accident year 2012 is 2.7% above the 2011 level. This is the third consecutive year of increasing claim frequency following a period of consistently declining claim frequency for several decades.
- The estimated average loss and allocated loss adjustment expense per indemnity claim for accident year 2012 of $81,000 is comparable to the accident year 2011 estimate. However, these estimates reflect a deterioration of $27,000, or 50%, since the reforms of 2002 through 2004 were fully implemented in 2005.
Source: CA WCIRB