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In fall 2016, the state’s Workers’ Compensation Insurance Rating Bureau (WCIRB) released a report on insurer experiences. The report contains information from nearly all workers’ compensation insurers in the state of California. The report reveals trends and insights employers can use to make informed decisions about insurance coverage and claims.
The findings show general trends in claim costs and insurer losses, including:
The data includes limited information from the 2016 year, but it does include detailed insurer reported information from the 2015 year. Together, the set suggests employers are paying less per $100 of payroll for coverage than they did in early 2015 but more than in 2009. Insurers are experiencing fewer total losses compared to the previous year. Claim frequencies are falling, but the cost per claim represents an increase. If the trends remain, insurers and employers can expect the 2017 accident year to include familiar rates of costs and expenses. In fact, the actual reported losses may support the continual decline in premium costs and the decrease in claim frequencies.
The WCIRB conducts research and rates experiences to help everyone involved in the system (insurers and employers) discover cost-effective insurance solutions. The September report features actuarial projections and actual reporting information. As an overview of statewide insurer experiences, individual insurers may provide their clients with differing agency information. Underwriting practices, claims processing, and other insurance factors may change the actual experience of individual insurers.
Historically, California has maintained a reputation for a complex and costly workers’ compensation program. Employers can use the information in the report to keep track of average premium expenses and claim frequency rates compared to statewide trends. Legislative changes, medical cost changes, geographic location, and other factors play a role in the total workers’ compensation losses and expenses from quarter to quarter.
The WCIRB gives every participating employer an experience modification rating based on the individual company workers’ compensation data. Insurers use the information to establish premiums. Take the most recent insurer experience reports and experience modification ratings into account to establish workplace safety policies. Companies that use proactive accident minimization and accurate reporting standards can improve worker health while minimizing premium costs.