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California ratings agency expects premium volume to rebound

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Written premium in 2021 didn’t recover from the shockwaves of the COVID-19 pandemic as expected, but officials with the Workers’ Compensation Insurance Rating Bureau of California said they’re optimistic of a return this year to pre-pandemic levels.

WCIRB Executive Vice President and Chief Actuary Dave Bellusci said during his 2022 “State of the System” report at the bureau’s annual conference Tuesday that, given history, the organization is projecting that written premium will increase about 13% to $15.6 billion this year.

From 2009 to 2014, written premium doubled, driven by a series of rate increases and a growing economy, Mr. Bellusci said. In the middle part of the decade, rates started decreasing as the effects of the SB 863 reforms and other statutory and regulatory changes offset the impact of economic growth. By the latter part of the decade, rate decreases accelerated and more than offset the impact of continued payroll growth.

Written premium plummeted in 2020 to $13.9 billion from $15.9 billion as a result of rate cuts and the economic slowdown caused by the pandemic. Heading into 2021, Mr. Bellusci said the WCIRB expected to see some growth in premium that never materialized. Instead, written premium dipped to $13.8 billion.

The agency expects a rebound, he said.

“We’ve got the first-quarter data that’s up considerably, but our expectation and our forecast is about a 13% increase in premium, not quite to the pre-pandemic level but not far away from it,” he said.

WorkCompCentral is a sister publication of Business Insurance. More stories here.