California Agents Brace for Rising WC Rates, Sluggish Economy

In the largest survey of its kind, fewer than half of California’s 10,000 business insurance agents see California’s business economy improving – either for themselves or for their clients – in 2008. The study also found that, despite recent statements by California officials, more than three quarters of these agents expect workers’ comp rates to rise significantly later in 2008 – and 77 percent see the state government as a significant contributor to this problem.

“We wanted to know what these insurance agents see for 2008, and the results were more than a little startling,” according to SIS Vice-President Joe Wheeler, vice president of Self Insured Solutions (SIS), which conducted the survey.

Participants in the three-part benchmark survey typically serve more than 200 distinct business clients per agent. “This level of participation is well above the threshold of significance,” said Daryl Toor, CEO of Mercury Messages. “These on-line surveys generated statistically-significant response rates ranging from 2.5 to 0.75 percent.”

There’s a strong perception that workers’ comp rates will rise in 2008. “Eighty percent of the agents polled expect a rate increase in the next six to twelve months,” Wheeler reported, “and 64 percent believe this will become a problem for their clients. While 72 percent see the state government as part of the problem, 68 percent believe that the private sector will develop rate increase solutions.”

With offices in Ontario, Calif., SIS is a workers’ comp insurance administrator specializing in private self-insured groups for high-risk professions.

Source: Self Insured Solutions