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California comp written premium falls, frequency rises


Written premium for California workers compensation insurers declined 2% last year, the Workers’ Compensation Insurance Rating Bureau of California said in an experience report released Wednesday.

The WCIRB also reported that indemnity claim frequency rose during the year.

Written premium for 2021 totaled $13.7 billion, compared with $14 billion the previous year. Written premium has been on the decline since peaking at $18.1 billion in 2016.

Industry average charged rates have also been consistently declining since a high of $3.24 per $100 of payroll in 2014. The average charged rate of $1.81 for 2021 was 7% lower than the average of $1.94 in 2020.

The projected combined ratio for 2021, including claims for COVID-19, is 112%, compared with 105% for 2020. The WCIRB noted last year’s projected combined ratio is 33 percentage points higher than the low of 79% set in 2016.

Excluding claims for COVID-19, the projected combined ratio for 2021 is 111%, compared with 100% for 2020.

Non-COVID-19 claim frequency increased 8.2% in 2021 as the economy recovered from the pandemic shutdowns that contributed to an 11.9% decrease in frequency in 2020.

The WCIRB reports that ultimate indemnity severities, excluding COVID-19 claims, increased to $29,445 per claim in 2021 from $28,646 in 2020. Ultimate medical severities, excluding COVID-19 claims, fell to $30,081 per claim from $30,518. 

WorkCompCentral is a sister publication of Business Insurance. More stories here.