Report: California Workers’ Comp Premium Levels on the Rise

California workers’ compensation premium levels rose by 14% in 2022 due to the economic recovery from the pandemic-related downturn, according to the new Workers’ Compensation Insurance Rating Bureau of California’s 2023 State of the System Report.

The WCIRB report forecasts premiums to be above the pre-pandemic level in 2023 thanks to continued economic expansion and flattening insurer charged rates.

Other findings include:

• Claim frequency is generally returning to pre-pandemic levels. The frequency of non-COVID-19 indemnity claims was relatively flat in 2022, following sharp changes in 2020 and 2021 related to the pandemic.
• Average indemnity claim costs continued to increase, primarily driven by increasing average wage levels.
• California continues to experience longer average claim duration compared with other states, driven by slower claim reporting, lower settlement rates and higher frictional costs.
• With increasing premium levels and relatively stable claim frequency and severity trends, the accident year combined ratio decreased by 7 points to 105% in 2022.

The report highlights key metrics of the California workers’ comp system, including the latest trends on rates, market characteristics and profitability. The full report is on the WCIRB website.