The written premium in 2021 did not recover from the shockwaves of the covid-19 pandemic as expected, but officials at the Workers’ Compensation Insurance Rating Bureau of California said they were optimistic about a return this year to pre-pandemic levels.
WCIRB’s Executive Vice President and Chief Actuary Dave Bellusci said during his State of the System report 2022 at the agency’s annual conference on Tuesday that the organization, given the history, predicts that the written premium will increase by about 13% to $ 15.6 billion in year.
From 2009 to 2014, the written premium doubled, driven by a series of interest rate hikes and a growing economy, Bellusci said. In the middle of the decade, prices began to decline as the effects of the SB 863 reforms and other statutory and regulatory changes compensated for the effect of economic growth. During the latter part of the decade, the rate cuts accelerated and more than offset the effect of continued wage growth.
The written premium fell to $ 13.9 billion in 2020 from $ 15.9 billion as a result of interest rate cuts and the economic downturn caused by the pandemic. On the way into 2021, Bellusci said that WCIRB expected some growth in the premium that was never realized. Instead, the written premium fell to $ 13.8 billion.
The agency expects a recovery, he said.
“We have data for the first quarter that are significantly higher, but our expectation and our forecast is about a 13% increase in the premium, not quite to the pre-pandemic level but not far from it,” he said.
WorkCompCentral is a sister magazine to Business Insurance. More stories here.