San Francisco, CA – The WCIRB recently completed its report on insurer loss and premium experience through March 31, 2013. The major findings of the report include:
- California written premium (gross of deductible credits) for calendar year 2012 is approximately $12.5 billion. This is approximately 16% above the written premium reported for 2011 and 42% above the written premium reported for 2009.
- Written premium for the first quarter of 2013 is approximately $3.9 billion, which is approximately 18% above the written premium reported for the first quarter of 2012.
- The projected industry average charged rate per $100 of payroll for policies written between January 1, 2013 and March 31, 2013 is $2.83. This is approximately 10% above the average rate charged for the second six months of 2012; however, it is approximately 55% less than the average rate charged for the second six months of 2003.
- The WCIRB projects total ultimate losses and allocated loss adjustment expenses (ALAE) for accident year 2012 to be $11.0 billion. While approximately 5% above the projection for accident year 2011 and 17% above the projection for accident year 2009, it is approximately 20% below the highs experienced prior to the 2002 through 2004 reforms.
- The WCIRB projects an ultimate accident year loss and ALAE ratio of 91.4% for accident year 2012, which is 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 117% 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 calendar year combined loss and expense ratio for 2012 reported by insurers is 115%, which is fairly consistent with the combined ratios for the prior three calendar years and represents the fourth straight calendar year with a combined ratio of over 110%.
- The WCIRB projects indemnity claim frequency for accident year 2012 to be 1.7% above the frequency for 2011 and 6.5% above the frequency for 2009. The projected indemnity claim frequency for the first quarter of 2013 is 0.4% higher than that for 2012.
- The WCIRB projects the average loss and ALAE cost (or “severity”) of a 2012 indemnity claim to be approximately $82,900, which reflects an increase of approximately $29,000 (or more than 50%) since the full implementation in 2005 of the reforms of 2002 through 2004.
The full report is available in the Research and Analysis section of the WCIRB website here: WCIRB Summary of March 31, 2013 Insurer Experience (PDF)