San Francisco, CA – The WCIRB has completed its report on workers’ compensation insurer loss and premium experience through March 31, 2014. The major findings of the report include:
- California workers’ compensation written premium for calendar year 2013 is approximately $14.8 billion, which is approximately 18% above the written premium reported for 2012 and 68% above the written premium reported for 2009. Written premium for the first quarter of 2014 is approximately $4.4 billion, which is approximately 13% above the written premium reported for the first quarter of 2013.
- The projected industry average charged rate per $100 of payroll for policies written between January 1, 2014 and March 31, 2014 is $2.95, which is approximately 4% above the average rate charged for 2013 but remains approximately 53% less than the average rate charged for the second six months of 2003.
- The WCIRB projects total ultimate losses and allocated loss adjustment expense (ALAE) for accident year 2013 to be $13.1 billion, which is approximately 7% above the projection for accident year 2012 and 30% above the projection for accident year 2009.
- The WCIRB projects an ultimate accident year combined loss and expense ratio of 116% for 2013, which is below that of the last several accident years primarily as a result of increasing premium levels in 2013.
- The calendar year combined loss and expense ratio for 2013 reported by insurers is 109%, which is somewhat below the combined ratios for the last few years but represents the sixth straight calendar year with a combined ratio of over 100%.
- The WCIRB projects indemnity claim frequency for accident year 2013 to be 4.9% above the frequency for 2012 and 8.3% above the frequency for 2011. A preliminary analysis of the 2012 frequency increase by the WCIRB largely attributed it to increases in cumulative injury claims, late reported indemnity claims, permanent disability claims, claims involving injuries to multiple body parts, and claims from the Los Angeles area.
- The WCIRB projects the average cost (or “severity”) of a 2013 indemnity claim to be approximately $90,000, which is slightly above the projected severities for accident years 2011 and 2012.
The full report is available in the Research and Analysis section of the WCIRB website.
Source: CA WCIRB