Calif. written comp premium set to decrease againPosted On: Sep. 17, 2019 11:54 AM CST
California written premium in workers compensation through the second quarter of 2019 is 7% below the same period for 2018, suggesting that the 2019 premium decrease will also be “significant,” representing a third consecutive year of premium decreases, according to a report released Monday by the Workers’ Compensation Insurance Rating Bureau of California.
Written premium for 2018 was 4% below that for 2017 and 6% below that for 2016; decreases the WCIRB says in its quarterly report are “primarily driven by decreases in insurer charged rates more than offsetting increases in employer payroll.”
Other highlights of the report that focuses on insurer experience through June 30 include:
- The average charged rate for the first six months of 2019 is 10% below that for 2018 and 32% below the peak in 2014.
- The WCIRB projects the ultimate accident year loss ratio for 2018 to be four points above that for accident year 2017, driven by higher claim severities for 2018 and lower premium rates.
- The 905 combined loss and expense ratio projected for accident year 2018 represents the sixth consecutive year of combined ratios below 100%, an “indicator of a healthy workers compensation system.”
- The ratio for the percent of open indemnity claims closed in the next year increased in each of the last six years and in 2019 is the highest ratio since 1999.
- Cumulative trauma claim rates continue to increase in accident year 2017, and the ratio of CT claims to all indemnity claims has increased by more than 80% since accident year 2005.
- The projected total loss and allocated loss adjustment expense claim severity for accident year 2018 is 5% higher than that for accident year 2017, following several years of modest declines in claim severities.