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California's
Workers' Compensation Insurance Rating Bureau
(WCIRB) Summary report of Insurer Experience
covering accident year figures for 2005 show
that loss ratios are at 34 percent.
According to
the Workers' Comp Executive, this is up a
percentage point from accident year 2004, but
is a negligible change. The data from insurers
show a resurgent, competitive and profitable
California workers' comp market, thanks in no
small part to the workers' comp reforms. And
as reflected by end-of-year financial
statements, many insurers are plowing the
profits back into prior accident years. The
calendar year combined ratio for 2005 is the
lowest it's been in years at 80 percent, noted
the Executive.
According to
WCIRB California written premium for 2005 was
$21 billion --11 percent below the written
premium for 2004. The average insurer rate in
the second half of 2005 is $4.53 per
$100/payroll, more than 15 percent below the
rates charged in the first half of 2005.
Ultimate
accident year losses projected for accident
year 2005 are $7.1 billion, approximately
eight percent below the accident year losses
currently projected for 2004 and 42 percent
below the accident year losses currently
projected for 2002.
Claims
frequency also continues its downward spiral.
Indemnity claims frequency for accident year
2005 is 18 percent below accident year 2004,
and the moment is 40
percent below its all time high in 1991. The
decline in frequency is in keeping with the
same trend it has for the past 10 years, with
the most recent sharp decline a result of the
indirect economic impact very likely caused by
the workers' comp reforms, according to the
Bureau.
(Article from Insurance
Journal)
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