California Workers’ Comp Claim Frequency Remains High
California leads the nation…in filing more workers compensation indemnity claims than any other state.
The Workers Compensation Industry Research Board (WCIRB) issued its latest review of this problem in early January. Among the key findings is that California workers are more likely to go to the worker’s comp claim system than those of the rest of the nation and that all the claims growth comes from the Los Angeles region.
This report is the latest update to the Analysis of Changes in Indemnity Claim Frequency, an annual product from WCIRB researchers who found find that indemnity claim frequency increased in California by three percent from 2010 to 2014 while frequency for National Council on Compensation Insurance (NCCI) states declined by 11 percent over the same period.
The WCIRB paper reflects insurer unit statistical and aggregate financial call data submitted to the WCIRB through the third quarter of 2015, as well as other external data, in order to identify the key factors driving these recent frequency increases.
The key findings
- Approximately 10 percent of indemnity claims are estimated to be reported after 18 months from the beginning of the accident year for 2014 as compared to less than two percent for 2007. A significant proportion of these late-reported claims are for cumulative injury claims, which are approximately four times as likely to be reported late as non-cumulative injury claims.
- Approximately 18 percent of indemnity claims are estimated to involve a cumulative injury in 2014, as compared to approximately 8 percent in the 2005 to 2007 period. The growth in cumulative injury claims beginning in 2009 has been concentrated in claims involving more serious injuries and multiple injured body parts.
- The long-term shift in California’s industrial mix toward less hazardous employments, which has typically dampened indemnity claim frequency, has moderated in recent years as economic recovery is occurring in high hazard industries such as construction and manufacturing.
- The increase in indemnity claim frequency in 2010 was generally experienced across the state. Since then, the increases have been concentrated in the Los Angeles area. Indemnity claim frequency increased by an estimated 13 percent in the Los Angeles/L.A. Basin region from 2010 to 2014 while frequency in the remainder of California declined by 6 percent during this same period. The Los Angeles area also has experienced significantly higher numbers of cumulative injury claims and claims involving multiple body parts than other regions of California.
- The proportion of injured workers with less than 2 years of experience at their current job has grown by almost 10 percentage points from 2010 to 2015, suggesting the economic recovery is likely one of the drivers of recent claim frequency increases.
The full Analysis of Changes in Indemnity Claim Frequency—January 2016 Update Report is available in the Research and Analysis section of the WCIRB website www.wcirb.org.