Cumulative trauma claims have risen sharply in recent years and they are driving changes in claim characteristics, costs and claim outcomes, a new report shows.
The Workers’ Compensation Insurance Rating Bureau of California’s Emerging Patterns of Cumulative Trauma Claims report out on Wednesday finds CT claims are leading to higher levels of litigation and earlier involvement of medical-legal and interpreter services than non-CT claims.
Related: California Comp Written Premiums ‘Relatively Stable’ Compared to Pandemic
These differences are influencing both medical and allocated loss adjustment expense (ALAE) costs and shaping overall claim severity trends, according to the WCIRB report.
The frequency of non‑CT claims has remained relatively stable, but the rising share of CT claims has shifted the composition of claims in California’s workers’ comp, leading to implications for pricing, reserving and trend analysis, the report shows.
The share of CT claims filed post-termination has risen sharply. CT claims are highly likely to be litigated, driving increases in ALAE costs across the system.
Since 2020, total costs (pure premium) for CT claims have more than doubled, while costs for non-CT claims have increased by more than 30%. CT claims now account for roughly a quarter of total pure premium costs, according to the report.
Related: Report: California Comp Combined Ratio for 2024 Highest in 20-Plus Years
“Whether claims are valued at 18 months or at a projected ultimate level, the share of indemnity claims involving CT was relatively stable prior to the pandemic and has increased since,” the report states. “The shares in 2023 and 2024 are almost double the share in 2012 and the highest levels observed in this period.”
The report shows an increase in the share of CT claims across all industry groups in recent years, with the largest change in the Office Clerical category (a 31% increase in the 2022-2024 period). The Accommodation & Food Service category saw a 21% increase in that period followed by Manufacturing with a 20% increase.
Every region saw at least a five-point increase in CT share between the 2017–2019 and 2022–2024 periods. The Los Angeles area saw a 20% increase in the 2022-2024 period, according to the report.
“CT claims are consistently more common in Southern California, with the highest rates in Los Angeles (LA) and surrounding areas followed by San Diego, likely reflecting higher litigation activity and larger workforce concentrations in industries with high rates of CT filings,” the report states.
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