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WCIRB Issues Its State Of The System Report on Workers' Compensation!

Thursday, July 16, 2020   (0 Comments)
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WCIRB Issues Its State Of The System Report on Workers' Compensation!

The report gives many positive indicators for California employers.
  • The WC insurance market remains stable in California. Page 5 of the report.
  • The average charged rate in the beginning of 2020 is 8% below the average charged rate from 2019. Page 9 of the report.
  • Of the COVID-19 filed WC claims as of July 7, it is not surprising that Health Care and Social Services compromise 45% of those claims, while Government employees including Police and Firefighters comprise 17% of claims. Construction workers are only 3% of all the COVID-19 claims. That is great work, and the industry should be commended. Page 17 of the report.
  • Permanent Disability claims in California are 250% higher than the national median. That is a major reason why California is one of the highest cost states in the nation. Page 33 of the report.
  • Late indemnity claims filed in California, more than 12 months after the alleged injury, are twice the national median. Page 49 of the report.
  • The ratio of Allocated Loss Adjustment Expense(ALAE) in California is also twice the national median. ALAE are costs allocated to a particular claim, such as attorney costs or subrosa investigations. Page 55 of the report.
  • The ratio of Unallocated Loss Adjustment Expense(ULAE) in California is also just short of twice the national median. ULAE are costs of the insurers own claims staff, or a Third Party Administrative staff. Page 57 of the report.
  • The frictional cost to deliver a benefit dollar in California is more than twice the national median. Page 58 of the report.
  • While combined loss and expense ratios are rising, they are still below 100%, which is still a profitable margin for insurers; with investment income added for profit. Page 65 of the report.
  • In 2018, California WC insurers had a 14.3% return on net worth. Page 67 of the report.
You can click here for a copy of the report.

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