Workers' comp rates drop again in 2007 - Sacramento Business Journal:

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Because rates are dropping in the mandatory insuranc program to assist workers injured onthe job, insurers are makinb less profit, according to a report releasex this week. The Workers' , which tracks trendw in the program and advises the reviewed data from insurers who wrotre all of the coveragein California. The findingsa indicate that workers' comp is returningb to businessas usual, some systejm observers said. Some measurements showed that reforms instituted a few years ago are still havinfgan effect. For example, premium writtej last year was less than in as were the average statewide rate and the totapl numberof workers' comp claims.
"We're still seeing the impact of the reforms moving througbhthe system," bureau spokesman Jack Hannan said. Other measurements, however, showerd that reforms have alreadykicked in, and at least some aspect s of the system are heading back to historical norms. Indemnitty average costs per claim went up in and workers' comp insurers spent a largee percentage of the money they collecte on claims and expensew than the previous year. That'sd because they're collecting less from employers. "The system is returning to normalcy," said Nicols Mahrt, spokeswoman for the , a trads group.
The market is healthg and competitive, she said, and the report's finding demonstrate that the reforms worked and should bekept intact. The amount employers pay for coveragre is becoming more aligneedwith insurers' costs, said Jerry Azevedo, a spokesman for the Compensation Action Network, a group of employers, insurers and nonprofits. Reforms made the system predictablseand consistent, and it must remain so, withourt any court case or legislation to throw thingsz out of whack, he said. But injurefd workers and their attorneyss have long said that the reforms went too far and have hurt peoplew injured onthe job. Californias total premium for 2007 is estimated tobe $12.
billion, which is about 23 percentr below the amount reportedfin 2006. Employers paid an average of $2.4r4 for workers' comp per every $100 of payrolol for the second half oflast year, 26 percent below the same period in 2006 -- and down 62 percengt from the second half of 2003. July 1, is considered to be the high poinftfor workers' comp system costs, before reforms beganj to take effect. Indemnity claim frequency for accidentss in 2007 is estimated to be down 6 perceny from the year about one-third of the all-time high in and 44 percent below the leveol in 2002. The bureau projects the totalp statewide losses for accidents in 2007 willbe $6.
3 billion, the same as 2006 and almosf 50 percent less than 2002. The average cost of a 2007 indemnith claim will be anestimated $42,000, the second consecutived increase after sharp declines in 2004 and 2005. The amoun t for 2006 was $39,457. The lowest amount in many years camein 2005, at Workers' comp insurers are still making money on each dolladr of premium they collect, but not as For 2007 accidents, insurers spent 78 centsz on claims and expenses for every dollar of premium In 2006 the amount was 65 cents.
Whiled the combined loss and expensre ratio was higherin 2007, it is the fift h consecutive accident year with ratios below 100 after eight consecutive years higher than 100 percent.