Calif. Workers’ Comp Premium Written Edges Up to $7.1B

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California workers’ compensation insurers’ total direct written premium (DWP) rose 3.1 percent to $7.1 billion last year, according to data from the National Association of Insurance Commissioners (NAIC) posted by the California Department of Insurance, the California Workers’ Compensation Institute reported.

The $214 million increase in aggregate premium in 2010 was the first increase after five years of decline, in which California workers’ compensation premium volume plummeted from a high of $16.1 billion in 2004 to $6.9 billion in 2009, a decrease of more than 57 percent.

CWCI said the decline was caused by high unemployment, payroll reductions and job shifts during the recession, declining claim frequency, and a soft market even while claims severity increased. The Workers’ Compensation Insurance Rating Bureau (WCIRB) summary indicated indemnity claim frequency rose for the first time in a decade last year, increasing 4.5 percent from the 2009 level.

Although aggregate premium remained about $7 billion for the past two years, CWCI noted changes in the 10 largest California workers’ compensation insurers.

State Compensation Insurance Fund (State Fund) remained the largest carrier in the state in 2010, with $1.14 billion in premium, but its market share, which rose to 53 percent during the market crisis of 2003 fell to 16 percent last year.
Zurich Insurance retained the second spot after increasing its premium volume by $49 million.
Travelers and American International Group traded the No. 3 and No. 4 positions.
Hartford Fire & Casualty added more than $102 million in total DWP to move up a notch to rank fifth.
Fairfax Financial, which jumped from No. 24 in 2009 to No. 6 in 2010, after acquiring Zenith, which had held down the seventh spot the prior year.
Liberty Mutual dropped two spots to No. 7 after writing $36 million less in premium in 2010.
Berkshire Hathaway added nearly $70 million to its premium total, while Everest Reinsurance added $8 million to remain at eighth and ninth in the rankings.
ACE Ltd. Group, which rounded out the top 10, moving up from the 12th spot in 2009 by increasing its total premium by $44 million.

The top 10 carriers wrote 65 percent of the 2010 DWP, CWCI said. Beyond the top 10 groups, 13 other insurers had at least a 1 percent market share in 2010, including Meadowbrook Insurance, which wrote $83 million more in DWP to move from 18th to 11th position, and Old Republic Group and Tower Group, both of which moved into the top 20 after acquiring other companies.

To view the full report from CWCI, visit www.cwci.org.

The CDI has posted the latest NAIC figures for California workers’ compensation DWP as part of the Property and Casualty market share reports for 2010, which can be found under “Studies, Reports and Publications” in the newsroom of its Web site, http://www.insurance.ca.gov/.

Source: CWCI

Topics California Trends Workers' Compensation Pricing Trends

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