California workers’ compensation insurers suffered a record underwriting loss of $2.8 billion in 1999 and are in "a deep hole," a top industry official warned.
There are "alarming trends in claim cost development and claim severity" that "are continuing and appear to be escalating," according to Dave Bellusci, chief actuary for the Workers’ Compensation Insurance Rating Bureau of California in San Francisco, in comments after the WCIRB released its report on 1999 workers’ comp losses and expenses.
One analyst said that despite some price increases, it is not clear that the industry can pull itself out of its current slump.
"There is no question the past has been pretty tough in California. There are some signs it's improving, but it’s not clear what’s going to happen," said Bill Miller, a senior consultant with Tillinghast-Towers Perrin in Irvine, Calif.
