The Workers Compensation Insurance Rating Bureau (WCIRB) has completed its report on statewide workers compensation insurer loss and premium experience through Dec. 31, 2015.
Among the major findings of the report:
- California written premium (gross of deductible credits) for 2015 is approximately $17.6 billion, which is approximately 7% above the written premium reported for 2014.
- The projected industry average charged rate per $100 of payroll for policies incepting between July 1, 2015 and Dec. 31, 2015 is $2.86, which is approximately 5% below the average rate charged for the first six months of 2015 and the first decrease in the average charged rate since 2009.
- The WCIRB projects total ultimate losses and ALAE for accident year 2015 to be $13.1 billion, which is 5% above the projection for accident year 2014 and 34% above the projection for accident year 2009.
- The WCIRB projects an ultimate accident year combined loss and expense ratio of 102% for 2015. Of this ratio, 60% is attributable to the indemnity and medical loss ratio and 42% is attributable to the loss adjustment and other expense ratio. This projection is consistent with the ratio for 2014 and below that of the prior several accident years.
- The preliminary calendar year combined loss and expense ratio for 2015 reported by insurers is 99%, which is below the combined ratios for the last several years and is the first year since 2007 with a combined ratio below 100%.
- The WCIRB projects indemnity claim frequency for accident year 2015 to be 1% below the frequency for 2014 but approximately 12% above the frequency for 2009. The frequency increases generally experienced over the last five years are largely attributed to increases in cumulative injury claims, late reported indemnity claims, claims involving injuries to multiple body parts, and claims from the Los Angeles area.
- The WCIRB projects the average cost (or “severity”) of a 2015 indemnity claim to be approximately $85,000, which is approximately 3% higher than the projected severity for 2014 and approximately 6% higher than that for 2013.
Author Kori Shafer-Stack, Editor, Amaxx Risk Solutions, Inc. is an expert in post-injury response procedures and part of the Amaxx team helping companies reduce their workers compensation costs by 20% to 50%. www.reduceyourworkerscomp.com. Contact: kstack@reduceyourworkerscomp.com.
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