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.
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