Comp premiums continue to fall in California

Written premium in California continues to drop, with the first nine months of 2018 at 3% below the same period for 2017, according to a quarterly experience report released Wednesday by the Workers’ Compensation Rating Bureau of California.

Premium for 2017 was 2% below 2016 figures, according to the report, which also revealed the average charged rates for the first nine months of 2018 at 10% below those for 2017 and 23% below the peak in 2014. The Jan. 1, 2019, approved advisory pure premium rates are on average 42% below those for Jan. 1, 2015, the report states.

Meanwhile, the report sets the projected loss ratio for 2017 at 2 points above that for 2016, “driven by higher medical severities for 2017 and lower premium rates,” the report states.

“Despite the increase in 2017, projections for other years are below those projected in prior quarters as a result of favorable loss development continuing to emerge,” it states.

The report also found the projected combined ratio for 2017 is 4 points higher than 2016, “as premium levels have lowered while average claim severities increased moderately.”

“Despite the recent increase, combined ratios for 2014 to 2017 remain the lowest since the 2004 through 2006 period,” the reports.

The report also found that indemnity claims “continue to settle quicker, improving significantly over the last six years.”

Claim frequency increased by 11% from 2009 to 2014, but has decreased by 4% from 2014 through the first nine months of 2018, the report states.

Frequency increases since 2011 have largely been attributed to increases in cumulative injury claims and claims from the Los Angeles Basin area, according to the report.