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Reduce friction costs but remain high in California



Friction costs in Californiaâ & # x20AC; & # x2122 ;s work compensation system have dropped in recent years, but the costs are still almost twice as high as the median state in the latest analysis of Workers & # 39; Compensation Insurance Rating Bureau of California.

It costs 48 cents to deliver $ 1 in benefits in California, a decrease from previous estimates of 50 cents but still almost twice as much as the 25 cents it costs to deliver the same benefits in median systems for worker compensation across the country, said WCIRB's Vice President and Actuary Tony Milano during a webinar on Wednesday. [19659002] Mr. Milan said WCIRB has identified key factors that explain why California remains an outlier.

"They are the large number of permanent disability claims, a higher proportion of cumulative trauma claims in California, we have a longer average claim length and only within the state are there significant differences regionally," he said.

Claims of permanent disability are more complex and involve more disputes, which drive up friction costs and distributed loss adjustment costs compared to injuries that result in only temporary disability, according to WCIRB.

California has the highest rate of permanent disability claims among workers nationwide.The 639 PD claims per 1

00,000 employees in California 2021 – an improvement from 774 per 100,000 employees in 2015 – is more than twice the median of 256.

More than 80% of claims for permanent partial disability involve so-called "non-permanent partial disabilities" trivial "amounts of allocated loss adjustment costs , which WCIRB defines as $ 1,000 or more.

Cumulative Trauma claims, which appear to be more common in California than other jurisdictions, can also lead to friction costs. Cumulative trauma claims tend to involve disputes over issues such as compensation and, as a result, involve more friction costs than other claims, according to Mr. Milan

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


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