The Workers’ Compensation Insurance Rating Bureau (WCIRB) has compiled a summary of insurer reports of loss and premium experience valued as of March 31, 2003. This summary is based on data reported to the WCIRB by insurers that wrote approximately 99 percent of the statewide 2002 insurance market.
The report shows that California written premium (gross of deductible credits) reported for the first quarter of 2003 is $5.1 billion. This is approximately 31 percent above the written premium reported for the first quarter of 2002 and 33 percent of the written premium for the full 2002 year. By the end of 2003, California written premium is likely to reach $20 billion.
The increase in written premium is largely the result of increases in insurer rates. Average insurer rates (final rates reflecting all rating plan adjustments except deductible credits, retrospective rating plan adjustments, and policyholder dividends) for policies written in the first quarter of 2003 are 15 percent above the average rates charged on policies written in the second half of 2002 and 31 percent above the rates charged on policies written during the first six months of 2002 policies. The average insurer-charged rate for the first quarter of 2003 was $5.85 per $100 of payroll.
The ultimate accident year 2002 combined loss and expense ratio is estimated by the WCIRB to be 120 percent. While this ratio is below the combined ratios ranging from 141 percent to 179 percent estimated for the four prior years, it is still far above historical norms.
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