While California's insurance industry awaits the results of recently enacted reforms to workers compensation, employer premiums will likely still face upward pressure for most of 2013 as implementation takes shape, insurance experts said.
Senate Bill 863, which was signed into law last September by Gov. Jerry Brown, attempts to curb escalating costs on premiums with a number of treatments, among them changing how benefits are calculated for injured employees, among other measures.
Unfortunately for employers, who for the past two years have contended with double-digit rate hikes, relief probably won't come until the second half of the year, if not later, because of a hardening insurance market that has kept pressure on carriers.
[caption id="attachment_68424" align="alignleft" width="125"] Hale Johnston[/caption]
"2013 in California workers compensation will be a dynamic year for everyone," said Hale Johnston, senior vice president and regional manager of the western region for Employers Insurance Company. "The market has been incredibly under-priced and it's been hardening. That trend will likely continue."
Even for companies with little or no claim action, premiums are increasing by approximately 8 percent, according to Brian Murphy, vice president of Heffernan Insurance Brokers North Bay Branch in Petaluma.
That could be compounded, however, because most insurance carriers filed for rate increases in July, meaning employers with policies renewing in the beginning of the year will likely be subject to both January and July increases, Mr. Murphy said.
[caption id="attachment_68425" align="alignleft" width="125"] Brian Murphy[/caption]