WCIRB 2025 Annual Conference – Why 11.2% Rate Increase?
The WCIRB 2025 Annual Conference was presented online last week. I miss the days of traveling to CA for in-person WCIRB meetings. It is/was such a welcoming group.
As a side note, the CA Insurance Commissioner approved the 11.2% pure premium rate increase on 07/11/2025. I had written an article that required a correction, as Commissioner Lara had not yet approved the rate increase.
The CWCI (California Workers Comp Institute) pointed out my premature assessment. Thanks for reading the article and correcting me.
The WCIRB 2025 Annual Conference was not published publicly at the time I wrote this article. When it publishes the video, I will link to it. I do have a copy of the slides that were presented during the first session.
One concept to remember involves the CA insurance carrier rates. All workers’ comp carriers can (and most do) publish rate deviations to the pure premium rate, often called loss costs multipliers or LCMs.
Two of the charts from the presentation point towards why the increase occurred, effective September 1, 2025.
Two Charts – More Than Clues To the Increases
Please note that I am not saying – “Eureka, I’ve found it.” The charts stood out to me. The two charts have to do with frequency and severity. The WCIRB explanations are below each chart.
Chart 11 Info
From 2015 to 2023, countrywide indemnity claim frequency has declined by an average of 3.6% annually. In contrast, California’s overall frequency has been relatively flat, with only a 0.2% average annual decrease.
The frequency of CT claims in California has generally increased since 2015, with a significant increase in 2023 alone.
Comparatively, California non-CT claim frequency has declined by an average of 0.9% per year. This is a bit more in line with the national average of a 3.6% decrease, though still higher.
From the WCIRB 2025 Annual Conference –
California has by far the highest permanent partial disability (PPD) claim frequency in the country, almost three times the countrywide median. States that use the same version of the American Medical Association (AMA) Guides as California to determine permanent disability do not have similar volumes of PPD claims.
In addition, California has a higher frequency of PPD claims despite a similarly hazardous mix of employment by industry and a similar rate of very severe injuries to lower frequency states. The interpretation of the AMA Guides within the California system could be driving the difference from other states. PPD claim frequency is significantly higher in the LA Basin area than in the rest of the state.
WCIRB 2025 Annual Conference Conclusions
One can never exactly point to one cause of the recent rate increases in CA. Usually, as in this case, multiple factors combined to cause the necessary rate increase.
I will update this article when the conference is posted to the WCIRB website. The WCIRB 2025 annual conference was very informative. Good job.
