Workers’ Compensation – Rates & What SB863 May Mean For You

On October 1st, the Workers Compensation Insurance Bureau (WCIRB) proposed new pure premium rates for 2013.  While these proposed rates have not yet been approved by The California Department of Insurance (DOI) they do serve as an indicator of things to come.

At this time, the consensus is 2013 rates are expected to increase on average between 6% and 15% over 2012 rates.  Some higher hazard classifications such as Tree Trimming, Roofers etc., will most likely see increases over 20%. There are nearly 500 different employee classifications used in California and the impact of 2013 rates will vary significantly from one classification to another.   

The good news is there are still many carriers providing workers’ compensation coverage in California.  In certain industry segments, such as construction, we are seeing a mixed bag as some carriers are retreating while others are staying in the marketplace.

Other changes this year include SB863 which was signed into law by Governor Brown on 9/17/2012.  While it is much too early to tell the impact of this legislation on rates, the bill is supposed to decrease costs for employers, but is supposed to increase benefits to injured employees.   California insurers are closely watching these developments and adopting their strategies for implementing the changes this bill will bring.

Risk Concepts accesses the filed data of all California insurers and utilizes a software program to determine which insurers might be the most competitive for a given industry type, employee classification, experience modification range and premium size range.  In addition, we are even able to develop “what if” scenarios by adjusting the discretionary premium credits that an insurer can apply to a given risk.

This powerful tool ensures Risk Concepts can identify the best markets for our clients and it allows us to negotiate with our underwriters by using “inside knowledge” of their base rates and premium rating structure.   This approach takes much of the delay and “gamesmanship” out of the proposal negotiation process and ensures the best result for the client.

In conclusion, we should have further clarification once The (DOI) approves the rate filings, but it seems wise to expect a 10% + or – rate increase from last years rates.  

Should you have any questions, please give me a call me today at (925) 283-8200 or send an e-mail to