Report Highlights Regional Differences in California Workers’ Comp Claim Costs

October 27, 2017

The Los Angeles Long Beach region continues to lead the state in workers’ compensation claim frequency (28 percent above average), while Silicon Valley comes at 20 percent below average, according to a new report released by the WCIRB. The numbers reflect controlling for regional differences in wages and industrial mix.

The 2017 Geo Study examines three policy hears of data between Jan 1, 2013 and December 31, 2015. Having three years of data allows for better analysis of year to year changes, said Ward Brooks, vice president of Research.

New data included in this year’s report include, median paid allocated loss adjustment expenses (ALAE) for permanent disability claims, share of indemnity claims open at first report and distributions of permanent disability claims by settlement type.

Key findings of the study:

  • Regional claim severity differences were more muted than frequency differences. The highest was in the Yuba City/Redding/ Far North region (9 percent above average) and the lowest in the San Bernardino/Riverside region (4 percent below average).
  • The share of cumulative trauma claims is much higher in Southern California than the rest of the State with a high of almost 10 percent in the Los Angeles/Long Beach region. For most Northern California regions, the share is 4 percent or less.
  • Medical legal costs and paid allocated loss adjustment expenses are significantly higher in the Bakersfield and the Los Angeles Basin regions than in the remainder of the State.
  • Pharmaceutical costs throughout the state have dropped over the last several years with the largest reductions occurring in Southern California.
  • San Francisco Bay area has highest wages in the state while Imperial/Riverside has lowest.
  • Permanent disability was noted to be higher in the Southern region of the state.
  • Loss ratios were highest in Los Angeles/Long Beach and Ventura. The lowest loss ratios, 15 percent lower than statewide average , were reported in Sacramento.

Visit WCIRB’s website to review the full report.

Source: WCIRB

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