SELECTED INDICATORS IN WORKERS’ COMPENSATION: A REPORT CARD FOR CALIFORNIANS
California Workers’ Compensation Insurance Industry
Workers’ Compensation Insurer Expenses
Combined Loss and Expense Ratios
The accident-year combined loss and expense ratio, which measures workers’ compensation claims payments and administrative expenses against earned premium, increased during the late 1990s and has been declining since that time. In accident-year 2005, insurers’ claim costs and expenses amounted to $0.55 for every dollar of premium they collected, which is the lowest combined ratio projected by the WCIRB since the inception of competitive rating and reflects the estimated impact of AB 227, SB 228, and SB 899 on unpaid losses.
Insurance Companies’ Reserves
The WCIRB estimates that the total cost of benefits on injuries occurring prior to January 1, 2006, is $7 billion less than insurer-reported loss amounts.