California Workers' Compensation Premium Volume Up 11% From 2013 To 2014. Up $4.5 Billion From Cataclysmic Recession Low Of 2009.
By Lonce LaMon - June 15, 2015
Workers’ compensation premium in California increased by almost 11% percent in 2014 from 2013, which was an increase of $1.1 billion to over $11.4 billion total, according to the California Workers’ Compensation Institute (CWCI). It was the third year in a row the total premium in California increased by more than $1 billion from the year prior.
This $11.4 billion 2014 total is up $4.5 billion from the industry 10-year low of $6.9 billion for 2009. But this is still $4.7 billion less than the $16.1 billion that was recorded for 2004 as an historic high.
This increase represents both growth to average premium rates as well as covered payroll. California’s economy continued to grow and return to health following the catastrophic recession which began in 2007.
The lingering recession plus the emergency reforms of the early part of the millennium caused premium volume to sink dramatically between the 2004 high of $16.1 billion to the 2009 low of just $6.9 billion. Starting in 2010, the escalation upward has been significant.
Volume at the San Francisco-based quasi-state agency, State Compensation Insurance Fund, increased more than 37 percent last year. This volume reached nearly $1.53 billion while Berkshire Hathaway, California’s current number two workers’ compensation insurer, posted nearly $1.14 billion in 2014 premium volume, up 16.4 percent.
Jennifer Vargen, a State Fund spokesperson and executive vice-president, stated most of the recent premium growth has come from writing more business as opposed to increasing rates.
State Fund has had its ups and downs in the 21st Century. First it saw a dramatic rise in volume during the comp crisis of the early millennium as private carriers fled the state and the niche. Then, it saw its volume drop precipitously as reforms lured the private carriers back. Numerous claims offices were closed and consolidated throughout the state.
Last year, Vernon Steiner came aboard State Fund as the new CEO to replace the former CEO Tom Rowe, who had resigned in late 2013.
lonce@adjustercom.com; Lonce LaMon, journalist; all rights reserved by Lonce LaMon and adjustercom.
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