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Member, Beacon International Group, Ltd.
The profitability of insurers writing workers compensation coverage in the Golden State improved during 2010, according to the Oakland-based California Workers' Compensation Institute.
The insurers' return on net worth improved to an average of 5.2% in 2010, up from 4.6% in 2009, according to Tuesday's CWCI bulletin based on data collected annually by the Kansas City, Mo.-based National Assn. of Insurance Commissioners.
California workers comp insurers' return on net worth declined for four consecutive years prior to 2010, from a peak of 16.4% in 2006. In 2002, before California adopted landmark workers comp reforms, the average return on net worth dropped to a low of negative 11.5%.
NAIC data shows that California workers comp insurers' 5.6% average return over the past decade compares with 6.1% for workers comp insurers nationwide and 7.1% for all lines of insurance nationwide.
Because the NAIC provides the only source of complete income statement data for all lines of insurance for every state and is produced by an objective source, its information is useful for tracking the profitability of different insurance lines over time, according to the CWCI bulletin.