The slow improvement in the California job market and higher rates for workers' compensation insurance in California teamed up in 2011 to push written premiums to $10.8 billion before any deductible credits were applied. Net written premiums amounted to $7.9 billion, which is up $1.4 billion from the 2009 low point.
The numbers in the Workers' Compensation Insurance Rating Bureau's final report on the December 31, 2011 experience differ slightly from the preliminary numbers it reported in early March. At that time net written premiums were coming in slightly lower at $7.7 billion (click
for past coverage).
The overall increase reflects the higher prices carriers have been getting in the market. For 2011, the average charged rate was $2.39 compared to $2.32 in 2010 and $2.29 in 2009. Rates hit their low point in 2008 at an average of $2.15.
The increase in premium also helped move the industry's combined ratio down to a 126% as it brought the loss ratio down to 80% from 87%. Loss adjustment expenses and other expenses held steady from the prior year at 24% and 22% respectively when the total combined ratio was 133%.
The average cost of an indemnity claim held steady from the preliminary report at $67,000, which is a slight increase over 2009 and 2010. Claim frequency is down slightly -- 0.3% -- from 2010, but is still 8.8% higher than 2009 (for past coverage of this uptick in frequency click