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Member, Beacon International Group, Ltd.
SAN FRANCISCO—California workers compensation losses have increased slightly in the past couple of years, driven in part by higher claim severity, according to the Workers' Compensation Insurance Rating Bureau of California.
In its annual report released Monday, the San Francisco-based WCIRB said California employers saw $8.1 billion in workers comp benefit costs in 2010, up from $7.8 billion in 2009. The bureau said it expects losses to have increased “modestly” again in 2011.
The average cost of a California indemnity claim reached an estimated $67,000 in 2011, up from $65,495 in 2010. Though the average cost has risen 40% since 2005, the WCIRB said severity has moderated in recent years due to “increased frequency of smaller indemnity claims.”
Workers comp premiums grew to $7.7 billion in 2011, up from $7.1 billion in 2010. Some of that came from a modest increase in insurer-charged rates in 2011, despite no change in advisory pure premium rates last year.
The average insurer-charged rate for the first nine months of 2011 was $2.37 per $100 of payroll, compared with $2.32 in 2010.
The WCIRB said the combined ratio for California workers comp insurers was 130% in 2010 and is expected to remain at that level for 2011 when that year's data is finalized.
Rates charged by California workers compensation insurers during the first six months this year rose an average of 3% over the same period last year, according to the Workers' Compensation Insurance Rating Bureau of California.