California ratings agency says 2021 written premium lowest in 10 years
The Workers’ Compensation Insurance Rating Bureau of California said written premium for 2021 was 1.4% below that for 2020 and the lowest since 2012, according to a 2022 first-quarter experience report released Wednesday.
Written premium for 2021 was $13.8 billion compared with $14 billion in 2020.
The WCIRB said the decrease was driven by rate reductions that more than offset increases in payroll.
The $4.4 billion in premium through the first three months of this year was up 22% from the same period in 2021.
The average rate charged in this year’s first quarter was $1.76 per $100 of payroll, about 3% below the average $1.81 charged in the prior-year period.
The projected combined ratio for 2021, including COVID-19 claims, is 112%, compared with 105% in 2020 and 96% in 2019. Combined ratios below 100% indicate underwriting profit.
“Excluding COVID-19 claims, the projected combined ratio for 2021 is 110% and the projected ratio for 2020 is 99%, which are still higher than recent prior years,” the report said. “Combined ratios have been growing in California due to insurer rate decreases and modest growth in average claim severities.”
The WCIRB projected a 2% increase in indemnity severity to $29,171 for 2021 from $28,737. The projected medical severity for 2021 is $29,672, 2% below the $30,394 average severity in 2020.
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