Workers' compensation insurance rates fell roughly 25 percent between the second half of 2006 and the third quarter of this year, the California Workers' Compensation Insurance Rating Bureau said.
According to figures released Monday by WCIRB, the average statewide insurer rate for workers' compensation coverage for policies written in the third quarter of 2007 was $2.49 per $100 of payroll, a drop of 25 percent from the $3.32 average for the second half of 2006.
The decline has been part of a consistent trend, WCIRB said, since a high of $6.46 per $100 of payroll experienced in the second half of 2003. At that point state lawmakers began passing a series of reforms designed to improve the state's workers' compensation market under Governors Gray Davis and Arnold Schwarzenegger.
Overall gross written premium, gross of deductible credits, fell slightly less, according to the WCIRB. For the first nine months of 2007, gross written premium for the state market totaled an estimated $9.9 billion, a decrease of 23 percent from the same time period a year earlier.
On the claims side, the WCIRB estimated that indemnity claims frequency for the first nine months of 2007 dropped by 7 percent from the same time frame a year earlier.
In a broader context, the WCIRB said that 2007 indemnity claims frequency has decreased by 46 percent since 2002 and is 32 percent of the all-time high experienced in 1991.
One area in which 2007 saw an increase form workers' compensation insurers was in loss ratios. According to the WCIRB, loss ratios for the first nine months of 2007 were at 55, an 11 percent increase over the same timeframe in 2006. The WCIRB also said the combined ratio for 2006 was 74, which it added was "the lowest in many years."
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