Workers’ compensation premiums increased by 11% last year, which is the third year in a row with an increase by more than $1 billion. According to the California Workers’ Compensation Institute, last year the total premiums were $11.4 billion, which is $4.5 billion more than the 10-year low in 2009, but still lower than the $16.1 billion in 2004.
According to the National Association of Insurance Commissioners and published by the California Department of Insurance, 2014’s premium total for California workers’ comp insurers increased by $1.1 billion. The increase includes both growth in average premium rates as well as covered payroll. Between 2004’s high to 2009’s low, emergency reforms caused the premium volume to reduce during that time, but has begun increasing in recent years.
The State Compensation Insurance Fund’s volume increased by 37% last year to $1.53 billion and the Berkshire Hathaway Group increased by 16.4 percent to $1.14 billion. The State Fund saw its volume rise during the crisis and then drop when reforms brought private carriers back into the arena. Most of the premium growth came from writing more business, instead of increasing the individual rates.
Seven of the top 10 comp insurers increased their premium volume while Travelers Group, Hartford Fire & Casualty Group and Fairfax Financial Group decreased in volume. These top 10 companies account for 63.3 percent of the total premium volume for last year with $11.4 billion total; a 2.5 percent increase from last year.