The California workers compensation marketplace is definitely struggling.?? A new report shows that on average in 2011 Insurance Companies were paying $1.16 in losses and expenses for every $1.00 in workers compensation premium they collected.? This figure has risen quickly since 2006 when Insurance Companies were only paying out approximately $0.76 cents for every premium dollar they collected.
Over the last several years, the WCIRB has been recommending double digit workers compensation rate increases.? While most carriers have not taken the full recommended increases, we have seen them slowly taking smaller rate increases, a couple times a year.? ?More notably, we are now seeing carriers taking a much more conservative position with their risk appetite and are limiting the amount of credits or discounts they apply to their base rates.? This is not good news for the home care industry, as there are fewer carriers willing to write this class of business, and those that are willing to write workers comp for home care agencies, are increasing their pricing. ??January 1st is a heavy renewal date and we have seen a major upward trend in 8827/Caregivers Workers Compensation rates.? The average base rate for the 8827 class has climbed to $8.61 as filed with the Department of Insurance for the beginning of 2012.
The following exhibit reflects the Base Rate increases over the last four years for the 8827 Classification for five insurance carriers who have been consistently writing workers comp for home care agencies: ?
?It is important to remember that these are the Base Rates, so they do not include the various credits, discounts and Experience Modification Factors that apply to each individual insured.? Home care agencies that have had favorable claims experience will be affected less than those who have had adverse claims experience, so it is important to be proactive in preventing claims and mitigating claims once they have occurred.
Many home care agencies will recall the dramatic rate increases that occurred back in the 2001 thru 2003 years, where the 8827 rate was as much as $18.00 to $23.00.? The marketplace has not become that distressed, however, the trends are not looking good.?
To find out more information or to see how Heffernan can help mitigate the impact that the increase will have on your company, please contact Steve Parkhurst at (925)942-4660 or Tami Unsworth at (925)942-4619.? Also, feel free to visit our website at www.Heffins.com/homehealth
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Source: http://heffins.wordpress.com/2012/02/06/caregivers-workers-compensation-rates-increased-for-2012/
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