The Workers’ Compensation Insurance Rating Bureau of California has released its Quarterly Experience Report based on statewide workers’ compensation insurer loss and premium experience through December 31, 2018. The major findings of the report include:

— California written premium for 2018 is 4 percent below that for 2017 and 6 percent below that for 2016 as recent declining premium rates have more than offset payroll growth.
— The industry average charged rate per $100 of payroll for policies incepting in 2018 of $2.25 is 11 percent below that for 2017 and 24 percent below the peak in 2014.
— The projected combined ratio for 2018 of 91 percent represents the sixth consecutive year of combined ratios below 100 percent. However, the 2018 combined ratio is 6 points above that for 2017, driven by higher severities for 2018 and lower premium rates.
— Indemnity claims continue to settle quicker, and the ratio of claim closure for 2018 represents a 19-year high.
— Indemnity claim frequency increased by 11 percent from 2009 to 2014 but decreased by 7 percent from 2014 through 2018.
— Cumulative trauma (CT) claim rates continued to be at high levels in 2017, and the ratio of CT claims to all indemnity claims increased by more than 89 percent since 2005.
— The estimated accident year 2018 loss and allocated loss adjustment expense severity on indemnity claims is 6 percent higher than for 2017. This represents the second year of increases following five years of modest declines.
— Pharmaceutical costs per claim decreased by 69 percent from 2012 to 2017 and continued to decrease through the first six months of 2018, when the new drug formulary became effective.
— Lien filings since 2016 have declined significantly, with the number of liens filed in the last two quarters of 2018 dropping 60 percent below pre-Senate Bill 1160 and Assembly Bill 1244 levels.

The full report is available in the Research section of the WCIRB website.