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Member, Beacon International Group, Ltd.
SAN FRANCISCO—California workers compensation insurers’ combined ratios climbed during 2009 to the highest level since 2001, while average claims costs continued increasing, according to a quarterly report on insurer experience released Thursday.
The ultimate accident-year 2009 combined ratio is estimated to have reached 124%, the San Francisco-based Workers’ Compensation Insurance Rating Bureau of California said in its “Summary of March 31, 2010 Experience.” That is 14 percentage points higher than for 2008 and the highest level since 2001, when it declined to 143% from 184% in 1999.
The WCIRB also projected an ultimate accident-year loss ratio of 80% for 2009, which is about 9 percentage points above 2008 and the highest accident-year loss ratio since 2002.
The calendar-year combined ratio for 2009 is 116%, which is 15 percentage points higher than for 2008, the WCIRB said.
The WCIRB estimated that the average cost, or severity, of a 2009 indemnity claim will reach $60,000, a 5% increase over 2008. That comes after three years of severity increasing at about 15% per year.
Meanwhile, average statewide insurer rate per $100 of payroll for policies written in 2010 is $2.47, or 5% above the average rate charged for 2009.
The WCIRB’s report can be found online at https://wcirbonline.org/WCIRB/wcirb_wire/2010/2010_10.html.