Report: Fewer Claims but Higher Losses for California Workers’ Comp Private Self-Insureds

Private self-insured claim volume in the California workers’ compensation system fell 9.5% in 2023, the biggest year-to-year decline in private self-insured claim frequency in more than 15 years. However, double-digit increases in the average amounts paid and incurred on these claims drove total paid and incurred losses for private self-insured employers sharply higher, according to a California Workers’ Compensation Institute review of data from the state Office of Self-Insurance Plans.

OSIP’s annual summary of private self-insured data provides the first look at California private, self-insured claims experience for cases reported in 2023. The summary includes the total number of covered employees, medical-only and indemnity claim counts, and total paid and incurred losses on those claims through the end of the year.

The 2023 summary shows the experience of private self-insured employers who covered 2.34 million California employees last year and who reported 94,386 claims in 2023, down from 104,278 claims in the 2022 initial report.

The distribution by claim type shows private self-insured employers reported 48,404 medical-only claims in 2023, which was down 7.4% from 2022, though that was 10.6% above the 43,779 med-only claims noted in 2020, when COVID closures suppressed med-only claim volume as the state’s economy went through a brief but steep recession, according to the CWCI.

Private self-insured indemnity claim volume, which spiked during the pandemic, fell 13.0% to 45,982 claims in 2023. The latest claim count works out to an overall frequency rate of 4.03 claims per 100 private self-insured employees in 2023, down from an overall rate of 4.31 in 2022, marking the first decline in private self-insured claim frequency since the pre-pandemic year of 2019, and the most significant drop in the 16 years covered by the CWCI review.

Despite the declines in claim volume and claim frequency, private self-insured’s first report total paid and incurred losses were both up in 2023. Paid losses on 2023 private self-insured claims through the fourth quarter totaled $340.2 million, 9.4% more than the first report total for 2022, as total paid indemnity rose by 6.7% to $172.8 million, and total paid medical increased by 12.2% to $167.4 million.

The data also show that first report total incurred losses on private self-insured claims rose to $864.0 million in 2023, up 6.4% from the comparable 2022 figure, as total incurred indemnity at the first report increased by 4.7% to $361.4 million and total incurred medical increased by 7.7% to $502.6 million.

Because there were 9,892 fewer private self-insured claims in 2023 than in 2022, the increases in private self-insureds’ total paid and incurred amounts in 2023 can be ascribed to the growth in the average paid and incurred losses at the first report, as average paid losses per claim climbed 20.9% to $3,605 while average incurred losses rose 17.6% to $9,153.

CWCI members and subscribers may log on to the Communications section of the CWCI website to view a summary bulletin with more details, analyses and graphics.