California Workers Comp Rates Are Too Low
The Workers Compensation Insurance Rating Bureau (WCIRB) of California has issued a report stating that written premiums for the year of 2009 are too low. Specifically, the gross written premium for last calendar year is about $8.9 billion, which is 17% lower than the reported numbers for 2008 and only 62% of the 2004 total.
This data was released in the organization’s “Summary of December 31, 2009 Insurer Experience,” in which WCIRB projected $6.9 billion in total accident year loses for 2009, or nine percent beneath the 2008 level. Further projections include an ulitamte accident year (AY) loss ratio of 75% for 2009, which is six percent higher than the estimated value for AY 2008, and the highest loss ratio since 2002.
The Bureau does has not yet compiled expense data for 2009, but it did say that the combined ratio is likely to be significantly higher than 2008’s 108%.
According to WCIRB, the average 2009 indemnity claim will cost about $58,000, which figure represents a 4% increase over 2008, after three years of 13%/year increases.
So what does this mean to Californians? Take a close look at your benefits packages – your company may have to pay more, and they may find a way to pass that payment on to you.