Insurance providers that offer workers’ compensation are taking a wide variety of actions in order to move towards profitability in this highly-regulated market. Financial results improved last year for workers’ compensation providers, but they continue to lose money in the market. According to the state agency that evaluates the results for workers’ compensation insurance, the “combined ratio” (expenses and claims to premium received) for workers’ compensation insurance in California for 2013 was 122 -- for every dollar of premium the insurance industry took in in, it paid out $1.22. This is better than 2012 when the combined ratio was 141.
In order to improve results, insurance companies have tightened their underwriting standards, becoming more selective about the risks they will insure. This has made it challenging for many business entities to get quotes for coverage. Almost all insurers have increased their base rates, so standard premiums have increased. Even business operations with good loss experience have received increases. Some insurance companies are slashing rates in order to bring in more profitable clients – even reducing it to levels sometimes lower than they should be priced. This is making the market very difficult to predict.
Business owners should work closely with insurance providers to receive all the credits for which they are eligible. Applications must be complete and agents need to submit applications to the appropriate markets. Agents and prospects also need to be on their toes to make sure they get quotes from the right carriers.
Western Grower Insurance Services represents many of the largest and most reliable workers’ compensation providers in California and Arizona and can provide members with multiple options for workers’ compensation coverage. For more information contact your local WGIS sales person or Greg Nelson, AVP of Commercial Lines.
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