CWCI Report Shows Jump in Costs for 2006 Policy Year
Incurred benefit costs in California increased for the first time in four years for policies written in 2006, despite a 4.5% drop in the number of work-injury claims, the California Workers' Compensation Institute reported in a bulletin issued Friday.
CWCI said the increase was driven by an $87 million increase in medical costs – half of which reflected rising costs on minor permanent disability claims.
The CWCI compiled first-day reports 18 months after policy inception to provide a snapshot of insured losses by policy year. The data shows that in policy year 2006 there were 20,326 fewer claims than the previous year, but claims costs rose by $112 million, or 3.3%.
Most of the increase came from incurred medical costs, which rose 4.3% to $2.13 billion. Indemnity costs increased 1.9% to just under $1.34 billion, CWCI said.
Costs had decreased in policy years 2003, 2004 and 2005 from the previous years.
The distribution by claim type showed a 14.5% drop in the number of major permanent disability cases (with ratings greater than 25%) in the PY 2006 first reports, yet total incurred costs of major PD claims was up +1.5%, to about $563 million, CWCI said. The average incurred cost on these claims climbed 17% to $129,367.
The full report is available here:
https://wcirbonline.org/wcirb/resources/data_reports/pdf/Bulletin_200907_Policy_Year_Statistics.pdf
Source: CWCI
Republished with permission from
www.WorkCompCentral.com.
