WCIRB insurer experience summaries are released approximately three to five months after the end of the quarter. These reports contain information such as written premium, average cost of a claim, accident year combined loss and expense ratios, etc. It has just published its Quarterly Experience Report as of September 30, 2019. Here are some of the highlights.

Written premium for the first 9 months of 2019 is 7% below the same period for 2018, suggesting that premium decreases are escalating in 2019. Written premium for 2018 is 4% below that for 2017 and 6% below that for 2016. The decreases since 2016 are primarily driven by decreases in insurer charged rates more than offsetting increases in employer payroll.

The Average charged rate for the first 9 months of 2019 is 11% below that for 2018 and 32% below the peak in 2014. The January 1, 2020 approved advisory pure premium rates are on average 47% below those for January 1, 2015.

The projected loss ratio for 2018 is 3 points above that for 2017, driven by higher severities for 2018 and lower premium rates. These ultimate projections as of September 30, 2019 are generally consistent with those as of June 30, 2019 and March 31, 2019 as recent trends in downward loss development are moderating.

The projected combined ratio for 2018 is 5 points higher than 2017 as premium levels have lowered while average claim severities increased moderately. Despite the recent increase, combined ratios for the last six years remain below 100% and are the lowest since the 2003 through 2007 period.

Indemnity claims have settled quicker over the last several years, largely driven by SB 863 and SB 1160 reforms. The ratio for 2019 is only modestly higher than 2018, which is driven by more recent accident years, suggesting claim settlement rates may be plateauing.

Claim frequency increased by 11% from 2009 to 2014, but has decreased by 6% from 2014 through the first 9 months of 2019. The recent declining frequency is more consistent with patterns in other states though more modest compared to decreases in other states as well as the long-term trend in California.

Cumulative trauma (CT) claim rates continue to increase in 2017 and the ratio of CT claims to all indemnity claims has increased by over 80% since 2005. The sharp increase in CT claims since 2012 is in the Los Angeles and San Diego areas, as CT claims in other regions of CA have generally decreased.

Projected claim severity for 2018 is 5% higher than that for 2017, following several years of modest declines in claim severities. 2018 is projected from claims valued at 21 months and while the growth may still moderate as the year matures, the growth rate as of September 30, 2019 is consistent with that of the prior quarterly evaluation.

Pharmaceutical costs per claim decreased more than 80% from 2012 through the first half of 2019. These reductions have been driven by SB 863’s IMR & IBR, reduced utilization of opioids, changes to Medi-Cal reimbursement rates, efforts to combat fraud, and the new drug formulary. Pharmaceutical utilization continued to decrease significantly in 2018 and 2019, the first periods in which the new drug formulary is in effect.

The number of liens filed in the first three quarters of 2019 are more than 60% below pre-SB 1160 and AB 1244 levels.