The Workers’ Compensation Insurance Rating Bureau of California has completed its report on insurer loss and premium experience valued as of December 31, 2012. This report is based on data reported to the WCIRB by insurers who wrote almost 100% of the statewide market.

California written premium (gross of deductible credits) for calendar year 2012 is approximately $12.5 billion. This is approximately 16% above the written premium reported for 2011 and 42% above the written premium reported for 2009.

The projected industry average charged rate (rates charged by insurers that reflect all rating plan adjustments except deductible credits, retrospective rating plan adjustments, terrorism charges, and policyholder dividends) per $100 of payroll for policies written between July 1, 2012 and December 31, 2012 is $2.60. This is approximately 12% above the average rate charged for 2011 and 24% above the average rate charged for 2009. However, the average rate charged in the second six months of 2012 remains approximately 59% less than the average rate charged in the second six months of 2003.

The WCIRB projects an ultimate accident year combined loss and expense ratio of 136% for accident year 2011, which is comparable to the 2009 and 2010 projections. The WCIRB preliminarily projects an ultimate accident year combined loss and expense ratio of 127% for accident year 2012. The combined ratios for the last four years are the highest since 2001.

The WCIRB projects indemnity claim frequency for accident year 2012 to be 2.7% above the frequency for 2011 and 12.8% above the frequency for 2009 (Exhibit 7). While projected indemnity claim frequency shows increases over the last three accident years, the 2012 frequency remains approximately 30% below the indemnity claim frequency experienced prior to the 2002 through 2004 reforms.