Total direct written premium in the California workers’ compensation system fell by 11.4% in 2020, dropping to an eight-year low driven by the ongoing decline in insurers’ average charged rates and relatively flat payroll levels, according to an analysis from the California Workers’ Compensation Institute.
DWP fell to $10.11 billion, and all but two of the state’s 25 largest insurer groups collected less premium in 2020 than in 2019, according to the CWCI analysis of data compiled from the National Association of Insurance Commissioners.
A quarterly experience report from the Workers’ Compensation Rating Bureau of California shows that as of Dec. 31, 2020 written premium for 2020 was 13% below the previous year, and was at the lowest since 2012, portraying the far-reaching effects of the pandemic on the state’s workforce, employers and workers’ comp insurers.
That report shows continued decreases in average insurer charged rates are driving the 2020 premium decrease as 2020 payroll levels were relatively consistent with 2019. The average industry charged rate for 2020 was 9% below 2019 and 40% below the peak in 2014.
The WCIRB’s proposed Sept. 1, 2021 advisory pure premium rates are on average 2.7% above the approved Jan. 1, 2021 rates, which exclude the cost of COVID-19 claims, and 2.0% below the approved Jan. 1, 2020 rates.
The CWCI report that found the NAIC data showed that State Compensation Insurance Fund was on the top of the list of California workers’ comp providers with 10.7% of the market, with its total premium declining by $129 million from the 2019 level. Berkshire Hathaway Group was second spot, writing roughly a quarter billion dollars less in premium and reducing its market share from 9.4% to 8.1%.
“ICW Group/Assets Inc Group, Hartford Fire & Casualty Group, and Travelers Group also retained their spots in the top five rankings, though Zurich Insurance Group moved ahead of AmTrust NGH group into the sixth position as its premium volume was only down 2.6%, far less than most of the other large insurers, so its market increased from 4.6% to 5.1%,” the CWCI analysis states.
Copperpoint Group was the only insurer group in the top 10 that increased DWP volume in 2020, writing nearly $45 million more in premium last year than in 2019, which pushed its market share up from 2.3% to 3.1%, and moved it up five spots into the number 10 position in the rankings, according to CWCI.
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