PentaRisk Insurance Services Newsletterer ‐ Volume 1 Issue 1
On November 14, 2014, California Insurance Commissioner, Dave Jones, approved new pure premium rates for workers’ compensation insurance policies that renew on January 1, 2015 or later. Overall, the average rate increase for California classifications is 2.2%, however for the 62 construction classifications we track, the average increase is 6.86%. This increase is less than last year’s average construction industry increase of 8.27%.
The WCIRB collects loss and payroll data from insurance companies and develops pure premium rates that reflect the cost of benefits due to workplace injuries, as well as the costs for adjusting and selling workers’ compensation claims. Pure premium rates do not include administrative, overhead and acquisition costs, and consequently, the final market rates are typically 10 to 20% higher than pure premium rates reflected on Page 3.
The largest rate increases in 2015 are for 5606 (executive supervisors), and 5552 (roofing). The biggest decreases are for 5187 (plumbing), and 5447 (wallboard). Contact your PentaRisk account executive for more details on how these rate changes will impact your renewal in 2015.
Since January 1, 2010, construction pure premium rates have increased 85%. We expect market rates in 2015 will be based more on individual client claims performance, rather than on base rate increases and changes in experience ratings.