Pursuant to Section 11759.1 of the California Insurance Code, the Workers’ Compensation Insurance Rating Bureau of California (WCIRB) has prepared this report containing estimated California workers’ compensation costs for 2013 based on insured employer experience including payments made by the California Insurance Guarantee Association (CIGA).

Calendar year 2013 earned premium totaled $14.4 billion (as compared to the $12.1 billion of premium earned in 2012). Total insurer paid losses (i.e., excluding payments made by CIGA) in 2013 were $8.4 billion, or 58% of calendar year earned premium. Combining insurer paid losses with a $1.9 billion increase in total insurer loss reserves resulted in total insurer incurred losses, excluding payments made by CIGA, of $10.3 billion, or 72% of the premium earned in 2013.In 2013, $5.2 billion, or 61% of total loss payments, were for medical services. $3.4 billion, or 39% of total loss payments, were for indemnity benefits (including vocational rehabilitation benefits).

In total, California insurers have incurred about $5.3 billion in expenses in 2013, or 37% of 2013 earned premium. In total, incurred losses and expenses in calendar year 2013 were $15.6 billion, or 108% of earned premium. Based on insurer statutory Annual Statement information, the WCIRB estimates policyholder dividends incurred in 2013 to be 0.4% of 2013 earned premium, resulting in an underwriting loss of $1.3 billion, or 8.8% of premium.

Although generally part of incurred indemnity losses rather than expenses, the amount paid in 2013 to applicant attorneys was derived from the WCIRB’s Annual Expense Call. In 2013, applicant attorneys were paid $457 million. (In 2012, applicant attorneys were paid $450 million.)

At the bottom end of paid medical expenses, 4% was paid for medical cost containment programs, 3% for medical legal evaluations, 2% for medicare-set-asides, Physicians on the other hand were paid 36% of the dollars allocated to this category. The top five recipients by percentage were general and family practice physicians, followed by physical therapists, clinics, orthopedists and then radiology services. Chiropractors were ninth with 1.3% of total medical paid. Psychiatrists were 11th and psychologists 13th on the list.

By medical legal specialty, orthopedists had 66% of the number of reports, followed by psychiatry at 14% and internal medicine and cardiology at 6%. Thus the ortho/psyche combination continues to be a popular combination punch.

In terms of money flowing to injured workers, temporary disability was 48% and permanent partial disability payments followed at 42%. Life pensions took 3% of the dollars while total permanent disability was 4%. Death benefits were 2% of paid indemnity benefits.