Written premium in the first quarter was 4% lower than the same period in 2024, extending a trend in which written premiums in calendar years 2022 through 2024 remained relatively stable compared to large swings during the pandemic, a new report from the Workers’ Compensation Insurance Rating Bureau of California shows.
The average charged rate was declining steadily since 2014, reaching historical lows in 2023 and 2024, but the estimated average charged rate based on the first three months of 2025 was 1% higher than that of 2024, suggesting that the recent rate declines have flattened, according to the WCIRB Quarterly Experience Report, which is as of March 31.
Rising costs in the system prompted the WCIRB to propose an 11.2% advisory pure premium rate increase for September 1, 2025. California Insurance Commissioner Ricardo Lara approved an average 8.7% increase in advisory pure premium rates.
According to the WCIRB report, the projected loss and allocated loss adjustment expenses ratio for accident year 2024 increased by 9 points. The bureau attributed the ALAE increase to mostly a sharp increase in average medical costs and a modest increase in indemnity claim frequency. Moderate increases in average indemnity and ALAE costs also contributed to the change, according to the WCIRB.
“The combined ratio increased by 13 points in 2024 and is the highest in over 20 years. The increase in 2024 is driven by higher claim frequency and average loss and loss adjustment expense (LAE) costs, with modest changes in earned premium,” the report states. “Combined ratios have been at or above 110% for the past 4 years. The last time combined ratios were over 100% for a sustained period was before the Senate Bill (SB) No. 863 reforms.”
After the volatility during the pandemic, indemnity claim frequency increased from accident year 2021 through accident year 2024, largely driven by a sharp increase in the frequency of claims involving cumulative trauma, according to the report.
Topics
Trends
California
Workers’ Compensation
Pricing Trends
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