California’s Workers’ Compensation Insurance Rating Bureau (WCIRB) has released its annual report on 2002 losses and expenses for the California workers’ compensation insurance industry.
The report shows that total medical costs paid by insurers during 2002 totaled $4.1 billion, up 28 percent from the $3.2 billion paid during 2001, and double the amount paid in 1997. In comparison, indemnity costs paid during 2002 were 14 percent higher than during 2001. The report also shows that, in particular, payments made to hospitals, pharmacies, and chiropractors have continued to rise rapidly.
Despite a 29 percent increase in earned premium, insurers experienced an underwriting loss of $3.3 billion, or 23 percent, in 2002. This was comparable to the 24 percent underwriting loss for 2001, as increased premiums were offset by an almost 20 percent increase in paid losses and an almost 50% increase in upward reserve adjustments, many on older claims.
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