Increase in California Workers’ Comp Pure Premium Sent to Department of Insurance

August 18, 2017

The Workers’ Compensation Insurance Rating Bureau has submitted its Jan. 1, 2018 pure premium rate filing to the California Department of Insurance proposing advisory pure premium rates that average $2.01 per $100 of payroll.

That WCIRB’S proposed rate is 14.3 percent less than the corresponding industry average filed pure premium rate of $2.34 as of July 1, 2017, and 0.5 percent more than the average approved July 1, 2017 advisory pure premium rate of $2.

The WCIRB decision follows recommendations issued by the governing committee two weeks ago.

The proposed increase follows five consecutive advisory pure premium rate decreases since early 2015 that have totaled more than 27 percent.

The proposed advisory pure premium rate level for January 1, 2018, while slightly above the average approved July 1, 2017 pure premium rate, is more than 7 percent below the average January 1, 2017 advisory pure premium rate, according to the WCIRB.

Factors that led to the July 1, 2017 advisory pure premium rate decrease included downward loss development, acceleration in claim settlement, accident year 2016 losses emerging below the projected level, improving loss adjustment expense trends and increasing wage inflation, according to the WCRIB.

However, several of these factors have now recently moderated, and increasing cumulative injury claim frequency and rising claim severity are eroding the positive impacts, leading to an indicated Jan. 1, 2018 pure premium rate level that is slightly above that of the July 1, 2017 pure premium rate level, the WCIRB said.


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