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April 19, 2024
Workers Compensation Bill 2024: One percent of employee’s salary to contribute to workers’ compensation fund in Kenya.

April 15, 2024
Colorado Worker Shows Head Injury Happened as a Consequence of a Knock on the Head at Work

April 4, 2024
Callfornia Division of Workers' Compensation Pharmacy and Therapeutics Committee Meeting Scheduled for April 17, 2024

April 3, 2024
California Division of Workers' Compensation Posts Adjustments to Official Medical Fee Schedule (DMEPOS)

California workers’ compensation carriers as a whole are on a roll no matter how the recent Workers’ Compensation Insurance Rating Bureau’s (WCIRB) data is analyzed. The question though is whether the industry is rolling forward or backwards with loss development numbers once again headed for the record books.

The WCIRB estimates the ultimate losses for 2001 will land in the $11.7 billion neighborhood, the highest amount ever recorded by the organization.

The positive trend of declining claims frequency has continued, but the WCIRB doesn’t think it’s sustainable, especially when benefit increases have historically stimulated an increase in claim frequency.

The good news is indemnity claim frequency is now about half of its 1991 level and rates on policies for 2002 have increased on average by 40 percent since 2001.

On the flipside though, the average cost of a 2001 claim is projected to be about $45,000, double the cost of a 1994 claim. And on top of that, the average premium rate for the third quarter of 2002 is approximately $5.00 per $100 of payroll. This is an 11% increase over the January 1, 1993 record high average rate of approximately $4.50 per $100 of payroll.

When it’s all said and done, the WCIRB estimates that California workers’ compensation carriers are currently under-reserved by $13.7 billion for all losses that occurred on or before Dec. 31, 2001.

But despite all the adverse loss developments, because of rate increases and claim frequency decreases, the WCIRB believes that the combined ratio for 2002 will be lower than the 2001 accident year’s 138 percent.

For some the WCIRB’s numbers indicate that the industry is gaining some traction and headed for the summit of success. But for others, the numbers add up to the industry being stranded on a frozen pond and not able to make a move without cracking the ice.