California Workers’ Compensation Loss Costs Trend Upward


Workers’ Compensation Insurance Rating Bureau

On the 20’th of April 2022, the Workers’ Compensation Insurance Rating Bureau (“WCIRB”) voted to authorize a 9/1/22 pure premium rate filing of 7.6% above that which was filed on 9/1/21 a year prior.  This filing reflects all data as of 12/31/21, well in advance of what the National Council of Compensation Insurance (“NCCI”) would use in their rate filings for the same date (uses data 18 months in arrears).

The data used for the study does not contemplate COVID-19 claims in the historical data set, but there is a provision of .5% for the projected cost of COVID-19 claims between 9/1/22 – 8/31/23 in the 9/1/22 filing.   Moving forward, COVID-19 claims will be counted towards rates and experience modification factors in California.  It should be noted that the trends of increased severity and loss development were smoothed by wage inflation.  In essence, the system did not expect as much in claims, but wage inflation allowed enough earned premium to be generated by it to compensate for it.

The WCIRB does a very nice job in disclosing their data and research to the general public and the presentation that details cost drivers in the California Workers’ Compensation system that are fueling these trends, check out this presentation –

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