California employers generally are aware that workers’ compensation rates this year are about 30% lower than they were in 2005, but did you also know that

1. Rates are going down again July1 for policies renewing on or after that date- with California and regional insurers cutting rates from 5% to 10% mostly (State Fund cut rates 10%, Zenith 5%, and national insurers mostly cutting rates 16.4%: Employers Direct, Zurich, St. Paul/Travelers)
2. Based on the first quarter of 2006, insurers profits are higher than ever even with these lower premiums (just issued report of WCIRB) with a first quarter “calendar year” loss ratio reported of only 51% for 2006
3. When your workers’ compensation policy comes up for renewal, be aware that there is an increasing diversity between insurers on the rates they offer.

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Another round of rate cuts has occurred for new polices going into effect July 1, ‘06.

The 173 California workers’ compensation insurance rate filings in May and June for July1, 2006 have led to additional rate decreases ranging from a 5% cut by Zenith the 10% drop by the State Compensation and the 16.4% rate drop by many national insurers., continuing a competitive market for employers.

Key May Rate Filings include:

• Berkshire Hathaway’s
• Redwood Fire -6.5%
• National Liability & Fire -7.5%
• Employers Compensation Ins Co. -12.7%
• Comp West -9.9%
• Employers Direct Insurance -16.4%
• Zenith -5%

Key June Rate Filings include:

• State Fund -10%
• Zurich -16.4%
• Liberty Mutual -11%
• St.Paul/Travelers -16.4%

Average Premium Rages: The average insurer premium rate per $100 of payroll has continued to fall since 2003, when it peaked at $ 6.47 per $100- average across all payroll classifications. For the first six months of 2005, the rate had gone down to $5.34 per $100, and declined to $4.49 for the last six month of 2005. For the first quarter of 2006, the average rate has been $3.75.

Insurance Co. Loss Ratios: But have the insurers been making a profit with these falling premiums? ABSOLUTELY YES! Losses are reported in two ways. First by “accident year”- meaning claims allocated to the year the accident occurred. Using this method of reporting, the latest loss ratios for both 2004 and 2005 are approximately 34%- historically low losses.

The second way of reporting losses uses a calendar method, which matches the financial reporting of insurance companies in their quarterly and annual financial reports to regulators and stock holders. On this basis, the WCIRB reports the 2006 Calendar 1st Quarter Loss Ratio of 51%, if not the lowest loss ratio ever, at least close to it.

Decline in Claim Frequency: A good part of the financial success is the result of actions by employers in providing safer workplaces. The frequency of workes’ compensation claims has declined continuously since 2000, with 13% fewer claims filed in the past year alone.

For more information and educational tools on health and safety issues, contact Dressler at info@dondressler.com, or at (949) 533-3742.

Issue 14, July 2006

Quick Resources
Employers' Bill of Rights
The starting point for an effective human resources strategy.
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HR Kits for Safety and Convenience
We’ve made it simple for you to comply with the law and avoid penalties. Money back guarantee.
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Case Studies
Read some real life situations our clients have faced, and the solutions we designed to reduce their costs and keep them out of future trouble.
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Avoid Sexual Harassment Law Suits.
This free white paper focuses on key strategies to avoid sexual harassment trouble at your business.
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Bi-lingual Heat Stress Cards
Occupational trainers agree that the best way to avoid heat stress illnesses is to educate management and employees on how to prevent it and what to look for in others.

A useful tool to meet your Cal/OSHA training requirements is a bi-lingual heat stress card. The cards cover the best ways for people to beat the heat, symptoms of heat exhaustion and heat stroke and what you need to do.

The cards are offered by Don Dressler for 20 cents each (covers printing) and available at:
info@dondressler.com.

Please call 949.533.3742 or email us to find out more about our unique approach to reducing your costs and avoiding legal trouble.