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Pursuant to Section 11759.1 of the California Insurance Code, the Workers’ Compensation Insurance Rating Bureau has prepared its 2022 California Workers’ Compensation Losses and Expenses report containing estimated California workers’ compensation costs for 2022 based on insured employer experience.

The report also reflects payments made by the California Insurance Guarantee Association (CIGA) in the statewide loss payments for calendar years 2010 through 2022.

Highlights from the report are as follows:

– – Calendar year 2022 earned premium totaled $15.3 billion (as compared to the $13.6 billion of premium earned in 2021).

– – Total insurer paid losses (i.e., excluding payments made by CIGA) in 2022 were $8.3 billion, or 54% of calendar year earned premium. Combining insurer paid losses with a $0.8 billion increase in total insurer loss reserves resulted in total insurer incurred losses, excluding payments made by CIGA, of $9.1 billion, or 60% of the premium earned in 2022

– – In 2022, $4.4 billion, or 53% of total loss payments, were for medical benefits.

– – In 2022, $4.0 billion, or 47% of total loss payments, were for indemnity benefits (including vocational rehabilitation benefits).

– – In total, about $72 million in vocational rehabilitation-related benefits were paid in calendar year 2022. This was 1.8% of all indemnity payments in 2022, of which 92% was for education related benefits. (For comparison purposes, in 2021, vocational rehabilitation benefits paid was $67 million, or 1.8% of all indemnity payments, of which 90% was for education-related benefits.)

– – Insurer incurred loss adjustment expenses (allocated and unallocated) in 2022 were $2.7 billion, or 17% of earned premium. This includes the full cost to insurers of administering, adjudicating and settling claims. Incurred loss adjustment expenses include $850 million in defense attorney expenses incurred in 2022. (For comparison purposes, in 2021, incurred loss adjustment expenses were 16% of earned premium, including $806 million in defense attorney expenses.)

– – Although generally part of incurred indemnity losses rather than expenses, the amount paid in 2022 to applicant attorneys was derived from the WCIRB’s Annual Expense Call. In 2022, applicant attorneys were paid $395 million. (In 2021, applicant attorneys were paid $389 million)

– –  In total, incurred losses and expenses in calendar year 2022 were $15.0 billion, or 98% of earned premium. Based on insurer statutory Annual Statement information, the WCIRB estimates policyholder dividends incurred in 2022 to be 0.6% of 2022 earned premium, resulting in an underwriting profit of $0.2 billion.