With the rapid economic downturn caused by the COVID-19 pandemic combined with continued insurance rate cuts in California, workers' compensation is expected to fall by more than 20% by 2020, according to a report released Tuesday by workers. Compensation Insurance Agency in California.
An executive order that made COVID-19 infections compensable for workers is unlikely to cause a massive uptick in receivables costs, but uncertainty remains, the Oakland-based rating agency said in its report.  The low range estimate of insurance company costs is $ 0.6 billion, the medium range estimate $ 1.2 billion and the high range estimate $ 2.0 billion – lower than in previous estimates "mainly due to the limited time that (assumption) applies and the availability of information on California's death and hospital experience levels by age reflecting the effects of home-to-home orders. "
" Because the majority of COVID-1
“Little is yet known about the likelihood of permanent disability benefits on COVID-19 claims If permanent disability is more common than expected, the costs of damages for serious and critical COVID 19 claims be higher.
Other highlights in the report include:
- The premium reductions in 2017, 2018 and 2019 were driven by declining insurance companies tax rates more than to compensate for employers' wage growth.
- The 2020 premium is estimated to be eight years long, more than 30% below their peak in 2016.
- While increases in insurance rates drove premium growth until 2015, recent reductions have significantly reduced premium growth.
- Continued increases in the labor force and in average wage levels were more than offset by insurance rate cuts, which resulted in premium reductions from 2016 to 2019.
- The sharp decline in employment projected for 2020 in combination with continued reductions in insurance rates will contribute to a large reduction in the premium for 2020.
More insurance and labor news about the coronavirus crisis here .