The Workers’ Compensation Insurance Rating Bureau of California has completed its report summarizing insurer loss and premium experience through March 31, 2006.
According to the report, workers’ comp reforms appear to be working. After reflecting the estimated impact of AB 227, SB 228 and SB 899 on unpaid losses, the WCIRB projects ultimate accident year loss ratios of 142 percent in 1999, 125 percent in 2000, 107 percent in 2001, 84 percent in 2002, 53 percent in 2003, 33 percent in 2004 and 34 percent in 2005.
The report also notes that 2005 is the third consecutive accident year with combined ratios estimated to be at 80 percent or below, after eight consecutive years of combined ratios well in excess of 100 percent. Indemnity claim frequency for the first quarter of 2006 is estimated to be 13 percent lower than the first quarter of 2005. Currently, 2006 indemnity claim frequency is estimated at approximately one-third of its all-time high in 1991. After reflecting the estimated impact of AB 227, SB 228 and SB 899 on unpaid losses, the WCIRB projects that the average cost of a 2005 indemnity claim will be approximately $43,000, the report indicates.
To view the full report, visit http://www.wcirbonline.org/index2.asp?section=5&subsection=0&content=wcirb_wire/pdf/2006/063103_insurer_exp_report.pdf
Source: WCIRB
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