The Workers’ Compensation Insurance Rating Bureau of California (WCIRB) has released its Quarterly Experience Report. This report is an update on California statewide insurer experience valued as of December 31, 2023.

Highlights of the report include:

– – After five consecutive increases, the projected loss ratio, including the cost of COVID-19 claims, dropped 2 points in accident year 2022, driven by a significant increase in premium due to higher payrolls and very modest changes in claim frequency and severity.
– – The accident year 2023 loss ratio is modestly higher than 2022, driven by the declining impact of COVID-19 claims and generally flat claim frequency and severity trends.
– – The average charged rate for 2023 continues to decrease; it is 5% lower than 2022 and the lowest in decades.
– – Indemnity claims had been settling more quickly through the first quarter of 2020, primarily driven by the reforms of Senate Bill No. 863 (SB 863) and Senate Bill No. 1160 (SB 1160).
– – Average claim closing rates declined sharply beginning in the second quarter of 2020 due to the pandemic.
– – Average claim closing rates have flattened in 2022 and 2023 and remain below the pre-pandemic level.
– – Projected severity on indemnity claims for 2023 is 3% higher than 2022 and 22% above 2017. – – The average severity in 2023 is the highest it has been in more than a decade, since before the SB 863 reforms.
– – Average Medical Cost Containment Program (MCCP) costs per claim have decreased by 14% since 2013, corresponding with the decline in average medical costs following the SB 863 reforms. Although MCCP costs increased modestly in 2023, MCCP cost levels have been generally declining over the last several years.
– – Pharmaceutical costs per claim decreased by 88% from 2012 through 2023. After increasing during the early pandemic period in 2020, average pharmaceutical costs per claim reverted to the pre-pandemic trend in 2021 and declined another 12% in 2022 and 2023.
– – Projected total statewide ultimate losses for 2005 through 2023 evaluations are below insurers’ reported amounts.

Join WCIRB actuaries to discuss the highlights of the September 1, 2024 Pure Premium Rate Filing and December 31, 2023 experience. They will also discuss their research into the impact of economic changes on the California workers’ compensation system. Please submit your questions when you register so that we may answer them during the webinar on Thursday, May 16, 2024, 10:00 AM – 11:00 AM PT. Please register for the webinar.