Comp written premium falls 13% in Calif.
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Written premium in California dropped 13% in 2020 to $2 billion — the lowest in the state since 2012 — driven by continued decreases in average insurer charged rates, the Workers Compensation Insurance Rating Bureau of California reported Thursday.
In its quarterly experience report, ending Dec. 31, 2020, the Oakland, California-based WCIRB reported that the average charged rate for 2020 was 9% below 2019 and 40% below the peak in 2014, when the rate was $2.97 per $100 of payroll.
The state’s preliminary projected accident year combined ratio for 2020, including COVID-19 claims is 102%, seven points higher than 2019 and 23 points higher than the low of 79% in 2016. However, excluding COVID-19 claims, the projected combined ratio for the year is 96%, a small uptick from 2019, according to WCIRB.
Indemnity claim frequency for 2020, excluding coronavirus claims, is nearly 6% below the prior year, likely driven by the downturn in the economy caused by the pandemic, the WCIRB reported. The percent of open indemnity claims closed in 2020 was 34%, down 4% from 2019, likely due to the economic downturn.
Indemnity and medical-only claims declined 13% and 31%, respectively, in the second quarter due to lower exposure levels during stay-at-home orders, and though claims remained lower than average, but climbed higher than 2019 in the second half of 2020 due to the filing of more than 16,000 COVID-19 indemnity claims during that period.
Projected indemnity severity in 2020, excluding COVID-19 claims, is 9% higher than 2019, but non-coronavirus projected medical severity for the year is 3% lower than 2019.
More insurance and workers compensation news on the coronavirus crisis here.
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California's written workers compensation premium dropped 12% in the first nine months of this year compared with the same period in 2019 and is expected to be the lowest since 2012 for the entire calendar year, according to the Workers Compensation Insurance Rating Bureau of California’s quarterly experience report, released Friday.
