Calif. Workers’ Comp Written Premium Down 23% in 2006

The Workers’ Compensation Insurance Rating Bureau of California has completed its report summarizing insurer loss and premium experience through Dec. 31, 2006.

According to the report, California statewide written premium for 2006 was $16.5 billion. That figure is approximately $5 billion, or 23 percent below the premium written in the previous year, and $7 billion or 30 percent below the premium written in 2004.

The report indicated that rates charged by insurers continued to decrease in 2006. The average statewide insurer rate per $100 of payroll for the last six months of 2006 was $3.25. That figure was 29 percent below the average rate charged for the same period in 2005, and nearly 50 percent the average rate charged for the same period in 2003.

The report indicated the loss ratio decreased by 12 percentage points from 2006 to 2005. WCRIB noted it was the third consecutive double-digit decline in claim frequency.

The average cost of an indemnity claim in 2006 was about $41,000. According to WCIRB, that estimate was below the pre-workers’ compensation reform level, but above the 2005 estimate. Nevertheless, the Bureau predicted the figure would likely change as loss information matures. “Both indemnity and medical average costs per claim show preliminary increases in 2006,” the report indicated.

To view the full report, visit https://wcirbonline.org/wcirb_wire/2007/2007_03.html.

Source: WCIRB