California’s Workers’ Compensation Insurance Rating Bureau has completed its report on statewide workers’ comp insurer loss and premium experience through Dec. 31, 2016.
The major findings of the WCIRB report include:
- California written premium for 2016 was roughly $18.1 billion, 3 percent above the written premium reported for 2015.
- The projected industry average charged rate per $100 of payroll for policies incepting between July 1, 2016 and Dec. 31, 2016 was $2.67, 6 percnet below the average rate charged for the first six months of 2016 and 12 percent below the average rate charged for the first six months of 2015.
- The WCIRB projects a preliminary ultimate accident year combined loss and expense ratio of 94 percent for 2016. This is consistent with the ratios for the prior two accident years, which represent the lowest combined ratios since the 2004 through 2006 period.
- The WCIRB projects indemnity claim frequency for accident year 2016 to be 1.3 percent below the frequency for 2015 but 9 percent above the frequency for 2009. The years 2015 and 2016 represent the first consecutive years of projected indemnity claim frequency decline since before the Great Recession.
- The WCIRB projects the average severity of a 2016 indemnity claim to be roughly $82,000, 4 percent higher than the projected severity for 2015 and 10 percent higher than that for 2013.
- The WCIRB projects that the average ALAE cost of a 2016 indemnity claim, excluding MCCP costs, is 3 percent above that of 2015. Projected ALAE severities by accident year as of Dec. 31, 2016 experience are significantly lower than prior projections (as of March 31, 2016). This recent favorable ALAE development is likely in part attributable to recent increases in the rate at which indemnity claims are settling.
The full report is available in the Research and Analysis section of the WCIRB website.