In a late November announcement California Insurance Commissioner Jones approved a 7.6% increase for the 2014 workers’ comp pure premium advisory rates. The decision by the California Department of Insurance (CDI) knocked roughly five cents off what the Workers’ Compensation Insurance Rating Bureau (WCIRB) had asked for last month in its amended rate filing. The Department removed State Fund’s loss adjustment expenses from WCIRB’s projections because State Fund’s costs are so much higher than other carriers.
“The state of the art is that you apply something called machine intelligence, where you use artificial- intelligence techniques to go through all this data and look for interesting patterns.”
California Insurance Commissioner Dave Jones adopted an advisory average pure premium rate of $2.70 per $100 of employer payroll for workers’ compensation rates effective Jan. 1, 2014, which is lower than that proposed by the Workers’ Compensation Insurance Rating Bureau.
Due to Georgia’s work comp medical claim severity climbing 5% in 2011 from 2010 and lost-time claim frequency in the state growing 4.5% in 2011 compared with the prior year, NCCI recommended a 2.3% rate increase for the state:
“There is a significant cultural issue. nsurers need to be willing to embrace business intelligence to transform the art of underwriting into a blend of science and art. It has to start with the mandate from executive leadership, through each line-of-business head to the underwriting department. It is not about eliminating the underwriting, but augmenting the underwriting-risk analysis, decision and pricing with expanded insights and intelligence about the risks.”
The workers’ compensation industry’s results improved in 2012. Premiums grew for the second straight year, the combined ratio improved, and claims frequency declined at a faster rate than severity increased, according to a report by the A.M. Best Co.
The NCCI made recommendations to several states to increase workers’ compensation rates. Among them are FL at 0.7%, CO at 2.6% and AZ at 3.2%.
Do you have the latest guidance on rate changes in your states? If you want to make sure you have the latest on changing rates for 2014, contact Risk Transfer today.
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