California Workers’ Compensation Premiums Down in 2008

December 16, 2008

The Workers’ Compensation Insurance Rating Bureau of California has completed its report summarizing insurer loss and premium experience through Sept. 30, 2008.

WCIRB said: “California written premium (gross of deductible credits) reported for the first nine months of 2008 is estimated at $8.1 billion, approximately 18 percent below the written premium reported for the first nine months of 2007. The WCIRB estimates that written
premium for all of 2008 will be approximately $11 billion, which is less than one-half of the 2004 total.

“The WCIRB projects an ultimate accident year loss ratio of 52 percent for accident year 2007. This loss ratio, while still low compared to historical norms, represents a 14 percentage point increase from the estimated accident year 2006 loss ratio and a 23 percentage point increase from the estimated accident year 2005 loss ratio.

The WCIRB estimates that the average cost of a 2007 indemnity claim will be approximately $46,800. This represents the second consecutive double-digit severity increase after sharp severity declines in 2004 and 2005. This accident year 2007 severity, while still below the pre-reform level, is approximately 29 percent above the 2005 estimate. Both indemnity and medical average costs per claim show significant increases in 2006 and 2007.”

To view the report, visit https://wcirbonline.org/wcirb/resources/data_reports/pdf/093008_insurer_exp_report.pdf.

Source: WCIRB

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