Having been involved in California Workers’ Compensation for almost 39 years, I recognize that its pricing structure is cyclical.  Unfortunately for California employers, recent WCIRB data indicates that even though claim frequency is declining, claims severity and medical costs are increasing.  Loss ratios have also risen dramatically, where insurers are paying out more than is collected through their billed premium.

The Insurance Commissioner believes that current rate levels are adequate and insurers must more diligently control claims costs. Being retired from the WCIRB, I do not speak on behalf of the Bureau.  However, drawing upon my personal experience and industry knowledge, I believe the current overall insurance industry premium level is inadequate for the system to remain solvent.  With medical costs skyrocketing, recent legal decisions rolling back reforms, and poor insurer investment returns among other issues, I foresee insurance carriers filing substantial rate increases.  Employers must explore all available remedies to control their costs. 

Paul Brundage
Workers' Compensation Rating Bureau Director - Retired