Today, the WCIRB submitted its January 1, 2018 Pure Premium Rate Filing (Filing) to the California Department of Insurance (CDI) proposing advisory pure premium rates that average $2.01 per $100 of payroll, which is 14.3% less than the corresponding industry average filed pure premium rate of $2.34 as of July 1, 2017, and 0.5% more than the average approved July 1, 2017 advisory pure premium rate of $2.00. This proposed small increase follows five consecutive advisory pure premium rate decreases since early 2015 that have totaled more than 27%.
The proposed advisory pure premium rate level for January 1, 2018, while slightly above the average approved July 1, 2017 pure premium rate, is more than 7% below the average January 1, 2017 advisory pure premium rate. There are several factors that led to the July 1, 2017 advisory pure premium rate decrease including downward loss development, acceleration in claim settlement, accident year 2016 losses emerging below the projected level, improving loss adjustment expense trends and increasing wage inflation. However, several of these factors have now recently moderated. In addition, increasing cumulative injury claim frequency and rising claim severity are eroding the positive impacts, leading to an indicated January 1, 2018 pure premium rate level that is slightly above that of the July 1, 2017 pure premium rate level.
The Filing and all related documents, including a detailed executive summary highlighting the Filing’s major components, are available on the Regulatory and Pure Premium Rate Filings page of the WCIRB website (wcirb.com).
The CDI will schedule a public hearing to consider the Filing. Once the Notice of Proposed Action and Notice of Public Hearing is issued, the WCIRB will post a copy on the Regulatory and Pure Premium Rate Filings page.