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Home / Insurance / California CRA says 2021 written premium lowest in 10 years

California CRA says 2021 written premium lowest in 10 years



The Workers’ Compensation Insurance Rating Bureau of California said the premium written for 2021 was 1.4% below that for 2020 and the lowest since 2012, according to a first-quarter 2022 experience report released Wednesday.

Premium written for 2021 was $13.8 billion compared to $14 billion in 2020.

The WCIRB said the decline was driven by tax cuts that more than offset wage increases.

Premiums of $4.4 billion in the first three months of the year were up 22% from the same period in 2021.

The average rate charged in the first quarter of the year was $1.76 per $100 of wages, about 3% below the average $1.81 charged in the previous year.

The forecasted total cost ratio for 2021

, including COVID-19 claims, is 112%, compared to 105% in 2020 and 96% in 2019. Combined ratios below 100% indicate underwriting profit.

“Excluding COVID-19 claims, the projected total expense ratio for 2021 is 110% and the projected ratio for 2020 is 99%, which is still higher than recent prior years,” the report said. “Combined ratios have increased in California due to insurer reductions and a modest increase in average claims rates.”

The WCIRB predicted a 2% increase in the reimbursement rate to $29,171 for 2021 from $28,737. The projected medical hardship for 2021 is $29,672, 2% below the average hardship of $30,394 in 2020.

WorkCompCentral is a sister magazine to Business Insurance. More stories here.


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