Today's post was shared by WorkCompCentral and comes from daviddepaolo.blogspot.com
Life's not too bad right now if you're an insurance company writing workers' compensation in California, at least on the aggregate according to the most recent report issued by the Workers' Compensation Insurance Rating Bureau.
With a preliminary accident year combined ratio for 2013 of 113, this is the lowest since a 96 was reported in 2007 and about 20% lower than the period between 2009 and 2011 when they averaged about 141%.
The combined ratio is no doubt helped by the biggest premium intake increase in years, with the WCIRB projecting gross industry premiums of $14.8 billion, up 18.4% from last year's $12.5 billion (net written premium, which excludes credits, dividends and other deferrals was up 12% from $9.2 billion in 2012 to $10.9 billion in 2013).
The loss ratio of 70 for 2013 is also the lowest since 2007.
Total ultimate losses and allocated loss-adjustment expenses of $12.5 billion for the accident year 2013 resulted in an ultimate accident year loss and ALAE ratio of 86.5% for accident year 2013, lower than it’s been in each of the past four accident years.
What's going on here? I thought that the California workers' compensation market was moribund into the annals of financial disaster.
The number crunchers at the WCIRB will have some more educated guesses than me, but there are a couple of factors that likely are at play.
For one thing we are still in an economic recovery, and because California's economy is so big it takes a bit more time to spool up and get...