As if California does not have enough monetary problems, now comes word that insurers’ witnessed billions in financial losses during 2011.
The Workers Compensation Insurance Rating Bureau reported that the insurers who provide coverage for the majority of employers collected $10.4 billion in premiums in 2011, but paid out some $7.7 billion in support benefits and medical care, and had expenses of $5 billion, thereby losing approximately $2.3 billion.
According to the new report, losses on workers comp coverage were greater than those experienced in 2010.
California’s workers comp insurers on average in 2011 spent approximately $1.22 on claims and expenses for every dollar of premium they took in. That compares to $1.17 in both 2010 and 2009, $1.01 in 2008 and 85 cents in 2007.
Insurers, the report points out, paid out $4.4 million for medical care of disabled workers and another $3 million in direct support benefits to workers. The report, however, does not include data from large private and public employers who generally self-insure for job injuries as opposed to purchasing insurance.
Author Michael B. Stack, CPA, Director of Operations, Amaxx Risk Solutions, Inc. is an expert in employer communication systems and part of the Amaxx team helping companies reduce their workers compensation costs by 20% to 50%. He is a writer, speaker, and website publisher. www.reduceyourworkerscomp.com. Contact: mstack@reduceyourworkerscomp.com.
WORKERS COMP MANAGEMENT MANUAL: www.WCManual.com
Do not use this information without independent verification. All state laws vary. You should consult with your insurance broker or agent about workers comp issues.
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