Most of us would probably answer “yes” to that question. But it might help to put things in perspective by pointing out that the average rate per $100 of payroll has fallen from $6.11 in 2004 to $2.44 in 2010:
Meanwhile, claims costs have increased 50% in that same period:
Another summary shows the statewide insurer combined ratio year by year. You can see that the ratios have risen sharply in each of the past four years, reaching levels of significant unprofitability in 2008 and 2009 (the most recent years available):
Industry combined ratios are revealing unsustainable trends. Combined ratios climbed an average of 18 points per year between 2005 and 2009, progressively reducing profitability.
You can find more details on statewide trends in rates and claims costs in the Workers Compensation Insurance Bureau quarterly summary of California workers’ compensation experience. Complete Summaries of Experience from 2006 through the present are available athttps://wcirbonline.org/wcirb/resources/data_reports/insurer_experience.html.
The WCIRB data is an important resource that can help brokers like you educate clients about whether rates and claims costs are trending up or down, and the implications those trends have for the future availability and cost of insurance.
Source of slides: State Fund