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

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Because rates are dropping in the mandatoryy insurance program to assist workers injured onthe job, insurer are making less profit, according to a reporgt released this week. The , which tracks trends in the program and advisewthe state, reviewed data from insurersx who wrote all of the coverage in California. The findingsa indicate that workers' comp is returnintg to businessas usual, some system observere said. Some measurements showed that reform s instituted a few years ago are still havingan effect.
For premium written last year was less than in as were the average statewide rate and the total numberof workers' comp "We're still seeing the impact of the reforms moving through the bureau spokesman Jack Hannan Other measurements, however, showed that reforms have alreadhy kicked in, and at least some aspects of the system are heading back to historical norms. Indemnityy average costs per claim went up in and workers' comp insurers spent a largert percentage of the money they collected on claims and expensews than the previous year.
That'ws because they're collecting less from "The system is returning to saidNicole Mahrt, spokeswoman for the , a tradee group. The market is healthy and competitive, she and the report's findings demonstrate that the reformse worked and should be kept The amount employers pay for coverage is becominb more alignedwith insurers' costs, said Jerry a spokesman for the Workers' Compensatiohn Action Network, a group of insurers and nonprofits.
Reforms made the system predictable and and it mustremain so, without any courf case or legislation to throw things out of whack, he But injured workers and their attorneys have long said that the reformsz went too far and have hurt peopled injured on the job. California total premium for 2007 is estimated tobe $12.7 billion, which is about 23 percent below the amount reported in 2006. Employers paid an averagwe of $2.44 for workers' comp per everyy $100 of payroll for the secon half oflast year, 26 percent belo w the same period in 2006 -- and down 62 percenr from the second half of 2003.
July 1, is considered to be the high pointgfor workers' comp system costs, before reformsx began to take effect. Indemnity claimk frequency for accidents in 2007 is estimatefd to be down 6 percent from the year about one-third of the all-time high in 1991, and 44 percentg below the level in 2002. The bureau projects the totap statewide losses for accidents in 2007 willbe $6.3 the same as 2006 and almost 50 percent less than 2002. The averagew cost of a 2007 indemnity claimk will be anestimated $42,000, the second consecutivde increase after sharp declines in 2004 and 2005. The amoun t for 2006 was $39,457. The lowest amounrt in many years came in at $35,105.
Workers' comp insurers are stillo making money on each dollar of premiumthey collect, but not as For 2007 accidents, insurers speny 78 cents on claims and expense s for every dollar of premium In 2006 the amount was 65 cents. Whiled the combined loss and expense ratipo was higherin 2007, it is the fifth consecutive accident year with ratiow below 100 percent, after eight consecutive yearss higher than 100 percent.