Workers comp premiums down in first quarter: WCIRBPosted On: Aug. 28, 2019 9:23 AM CST
California workers compensation written premiums for the first quarter of 2019 are down 12% compared with last year to $4.4 billion, according to the Workers Compensation Rating Bureau of California’s quarterly update.
The Oakland, California-based WCIRB says the quarterly results as of March 31 suggest premium decreases will escalate in 2019, the bureau said in a statement.
For the first three months of 2019, the average charged rate was 10% below the same quarter in 2018, and 31% below the peak in 2014.
Higher claim severities in 2018 and lower premium rates drove the ultimate accident year loss ratio up to 91% in 2018 from 85% in 2017, making it the sixth consecutive year of combined ratios below 100%, reported the WCIRB.
Indemnity claims have continued to settle faster and the ratio has continued to improve over the past six years, largely due to legislative reforms in the state, with 26% of indemnity claims closing in one year — tying with the highest ratio since 1999, said the bureau.
Cumulative trauma claims have continued to increase with 16.6% of cumulative trauma claims per 100 indemnity claims reported in 2017 to 17.6% in 2018. Overall, cumulative trauma claims have increased by more than 80% since 2005, according to the statement.
The ratings bureau projects that total loss and allocated loss adjustment expense claim severity for 2018 will be 6% higher than 2017, with ultimate total loss per claim rising to $71,419 in 2018 from $67,548 in 2017, following several years of flat to modestly declining claim severities.