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Workers’ Comp Insurers Continue Cutting Their Rates

Despite the Workers’ Compensation Insurance Rating Bureau recommending that benchmark rates in California be increased in the last two years, the rates that insurance companies are charging for coverage continue falling. But the party may soon be coming to an end, according to a new report. 

The California Department of Insurance in fact rejected the Rating Bureau’s rate hike recommendations in both in 2021 and 2022 when it had asked for 2.7% and 7.6% increases respectively, and it ordered that benchmark rates remain unchanged.  

Despite that, average charged rates slipped 3.3% in the first half of this year from the end of 2021, according to a report by the Workers’ Comp Executive trade publication, citing a new analysis by the Rating Bureau. 

In fact, the average rates insurance companies are charging employers in California are the lowest they’ve been in more than two decades, according to the rate-making agency.  

A caveat: Rates will vary from employer to employer and those who have claims may see their rates increase instead of fall.  

Competition has been fierce in the workers’ compensation insurance market and rates charged to employers have been falling since 2005, although there was a slight uptick in 2013 and 2014, followed by further declines. Since 2005, there has been a series of legislative reforms that cut costs and increased benefits for injured workers, and resulted in more predictable and declining claims costs.   

As of June 30, 2022, the average charged rate for workers’ comp in California was $1.74 per $100 of payroll, down from $1.80 at the end of 2021. In 2014, the rate was $3.24 and in 2003 it was $6.54.  


There are concerns, however, that the tide may turn in the coming years, as insurance companies’ workers’ compensation combined ratios continue creeping higher. Combined ratios measure claims costs, claims adjustment costs and other overhead compared to the premium that insurers charge.  

For 2021, the average combined ratio for workers’ comp carriers in California climbed to 112, meaning that for every dollar they take in in premium, they spend $1.12. That’s compared with a combined ratio of 104 in 2021 and 79 in 2016. 

“Combined ratios have been growing in California (since 2016) due to insurer rate decreases and modest growth in average claim severities,” the Rating Bureau wrote in its report.  

Typically, rate increases follow rising combined ratios and the Workers’ Comp Executive predicts that rates will start climbing.  

Insurers are seeing claims costs climb, driven by:  

  • Higher medical costs for injured workers, 
  • Increasing frequency of workers’ comp claims, and  
  • Increasing share of costly cumulative trauma claims. 

Reduce Your Workers Comp Costs at Your Next Renewal 

For VMA members, rest assured that before your policy comes up for renewal, we will reach out to numerous carriers for quotes to ensure you are getting the best rate possible with the best carrier possible.  

If you’re a small business owner in the print, packaging, label or creative agency field and not yet a member, check with us to reduce your workers’ comp costs at your next renewal.  

Workers’ comp rates can vary between carriers.  Each carrier has an “appetite” for certain types of business.  VMA has strong relationships with insurance carriers that provide the most competitive rates for our industry’s classes of business.  As a result, we are successful in reducing workers’ compensation costs 75% of the time! 

Contact Shannon Wolford, VMA Director of Membership and Sales at shannon@visualmediaalliance.org or 415-710-0568 today and keep your costs down. 

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