The Workers’ Compensation Insurance Rating Bureau of California (WCIRB) has released Emerging Patterns of Cumulative Trauma Claims. The new report finds that cumulative trauma (CT) claims have increased sharply in recent years and are contributing to notable changes in claim characteristics, costs and claim outcomes.
CT claims have long been a part of the California workers’ compensation system. Recently, while claim frequency for non-CT claims has been relatively flat, the proportion of claims involving CT has increased sharply. This contrasts with the rest of the country, where rates of CT claims have remained stable since 2013. This report explores the key drivers of the recent CT claim increases and their impact on system costs.
The report shows CT claims are playing a growing role in system-wide trends, with higher levels of litigation and earlier involvement of medical-legal and interpreter services than non-CT claims. These differences are influencing both medical and allocated loss adjustment expense (ALAE) costs and shaping overall claim severity trends.
While the frequency of non-CT claims has remained relatively stable, the rising share of CT claims has shifted the composition of claims in California’s workers’ compensation system, with implications for pricing, reserving and trend analysis.
The report examines:
– – Key drivers of the recent increase in CT claims
– – The extent to which CT claim growth is affecting medical and ALAE cost trends
– – How changes in CT claim filings are influencing claim severity trends
Summary of Key Findings:
– – The share of CT claims filed post-termination has risen sharply, and these claims are highly likely to be litigated, driving significant increases in allocated loss adjustment expenses (ALAE) costs across the system
– – Whether claims are valued at 18 months or at a projected ultimate level, the share of indemnity claims involving CT was relatively stable prior to the pandemic and has increased since.
– – The shares in 2023 and 2024 are almost double the share in 2012 and the highest levels observed in this period.
– – CT claims are consistently more common in Southern California, with the highest rates in Los Angeles (LA) and surrounding areas followed by San Diego, likely reflecting higher litigation activity and larger workforce concentrations in industries with high rates of CT filings
– – Regardless of where in the state the injured worker is located, the vast majority of litigated CT claims are represented by firms based in the LA area.
– – CT claims are more likely to involve medical-legal and interpreter services early on, contributing significantly to increases in these medical costs for the system.
– – The share of CT claims without medical payments at 18 months past policy inception is consistently much higher than for non-CT claims and has increased since accident year (AY) 2019.
– – Since 2021, changes in average indemnity and medical costs have been lower for CT claims than for non-CT claims, suggesting the increase in CT claims is dampening overall claim severity trends. Changes in average ALAE costs have been lower for CT claims than for non-CT claims.
– – Since 2020, total costs (pure premium) for CT claims have more than doubled, while costs for non-CT claims have increased by more than 30%. CT claims now account for roughly a quarter of total pure premium costs.
This study relies on WCIRB unit statistical report (USR), medical transaction and CT survey data. Access the report on the Research Studies and Reports page, where you can also explore related WCIRB research.