By Shantih?Charlton, CIC, CISR
Shantih Charlton
A recent report from the Workers? Compensation Insurance Rating Bureau of California (WCIRB) indicates that insurance company rates for 2013 are going up by 15% in an effort to protect insurance company solvency (i.e. their ability to pay claims). The ultimate loss and expense ratio was high for 2011 at 139% and the 2012 calendar year loss ratio is 79% for the first 9 months (4th Quarter results have not yet been released).?
In general, claims frequency is increasing, payrolls are decreasing, and underwriting profitability is decreasing.? With the higher rates and lower payrolls, employers are paying more in premium than they were before.? The higher premiums are compounded by higher experience modification factors (also known as the mod), which are increasing due to higher claims frequency. The mod factor is a number that represents whether a company?s workers? compensation losses are better or worse than average. The mod works as a credit or debit that is applied to your workers? compensation premium.
You can do the following to help to lower your experience modification factor and your premium:
- Implement a safety program
- Implement a return to work program
- Implement a driver training program
- Implement an active claims management program to manage outstanding reserves and focus on efficiently resolving open claims.
- Review your job descriptions against the class codes to make sure they are correct
If you are concerned about your workers? compensation premium in 2013, you should contact a qualified insurance broker who has the loss control experience to help you promote safety and control your workers? compensation premium.
Disclaimer: The above content is a general overview which is provided for discussion purposes only and is not in any way meant as providing recommendations or legal counsel. It is not intended to apply to each circumstance. Because the facts and circumstances of every matter differ and the terms, conditions, exclusions and limitations contained in insurance policies vary, you should review your policy carefully and seek any legal counsel that may be necessary or appropriate.? Momentous is not responsible for any losses or damage resulting from reliance on the information contained herein.?
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