The California workers compensation WC insurance market continues to experience substantial underwriting losses, but Fitch Ratings expects that further premium rate increases, coupled with effects of recent market reforms, will modestly improve results in the near term.
California is the nations largest WC insurance market, with approximately 20% of countrywide 2013 direct written premiums in the line. It is also historically one of the more volatile-performing markets, exhibiting past periods of large underwriting losses.
The California Workers Compensation Rating Bureau WCIRB projects an accident year combined ratio of 113% in 2013. While results remain at subpar levels, the combined ratio has improved by nearly 30 percentage point improvement since 2010.
Poor industry performance in the California WC insurance market has led to a shift in market share as the market’s leading writer, The State Compensation Insurance Fund, continues to lose market share while companies including Berkshire Hathaway Inc, Amtrust Financial Services Group, and Employers Holdings Inc. expanded their premium bases in the state.
via California Workers Compensation Insurance Still Poor
