CA: Workers' comp premium rates show big drop

Sac Bee ^ | 1/18/05 | Gilbert Chan

[NormsRevenge]

California business owners saw the average annual premium for workers' compensation insurance drop between 13.9 percent and 16.6 percent in the last six months, according to records from the state Department of Insurance.

These would be the first double-digit percentage rate cuts since deregulation in 1995, savings that arose out of legislative overhauls the last two sessions.

"Rates are coming down. Right now, it appears medical cost inflation has been impacted by the reforms. Medical costs were one of the primary drivers pushing rates up," said Jack Hannan, a spokesman for the Workers' Compensation Insurance Rating Bureau of California, an industry research group.

Still saddled with the highest costs in the nation, however, employers are hungry for more. Small-business owners, in particular, say they remain under tremendous financial strain because their workers' compensation premiums doubled or tripled in recent years.

Sylvia Compton, owner of Dust-Tex Services Inc. in Sacramento, will be shopping for new coverage this March after her rates fell by just 2 percent in 2004. The company's $80,000 workers' compensation insurance bill is still four times larger than a few years ago, she said.

"Two percent is nothing," said Compton, who employs 30 people. "We're still in a very dangerous situation as far as (staying in) business."

[Amerigomag]

California business owners saw the average annual premium for workers' compensation insurance drop between 13.9 percent and 16.6 percent in the last six months, according to records from the state Department of Insurance.

But from the same article, is a quote that is probably closer to the reality that small businesses experienced last year:

A rating bureau report released last week shows that employers' costs have fallen by an average of $1.01 to $5.34 per $100 of payroll in the first nine months of 2004

That's a premium drop of from 1% to 5%.