Rancho Mesa's Lauren Stumpf and Vice President of the Construction Group Sam Clayton discuss the Workers’ Compensation Insurance Rating Bureau's (WCIRB) recommended increase in the advisory pure premium rates.

Show Notes: ⁠⁠Subscribe to Rancho Mesa's Newsletter⁠⁠

Director/Host: ⁠⁠⁠Lauren Stumpf⁠

Guest: ⁠⁠Sam Clayton⁠⁠

Producer/Editor: ⁠⁠Megan Lockhart⁠⁠

Music: "Home" by JHS Pedals, “News Room News” by Spence

© Copyright 2024. Rancho Mesa Insurance Services, Inc. All rights reserved.

Transcript

Alyssa Burley: Hi, this is Alyssa Burley with Rancho Mesa's Media Communications and Client Services Department. Thank you for listening to today's Top Rancho Mesa News, brought to you by our Safety and Risk Management Network, StudioOne.

Lauren Stumpf: Welcome back, everyone. I'm Lauren Stumpf and today my guest is Vice President of the Construction Group with Rancho Mesa, Sam Clayton.

Sam Clayton: Good morning, Lauren.

LS: Good morning. So Sam, earlier this month, the Worker's Conference Insurance Rating Bureau or WCIRB recommended a slight increase in advisory peer premium rates. Can you tell us more about this?

SC: Absolutely, Lauren. The WCIRB proposed a nominal 0.9 % increase in the advisory per premium rates, which is due to increased loss development for medical costs and higher claims adjustment expenses. This recommendation has now been passed to the California Insurance Commissioner, Ricardo Lara, for approval. If approved, the new rates will take effect September 1, 2024.

 LS: Interesting, so in the article you mentioned that while the increase is significant, it does signal a potential shift. Can you elaborate on that?

SC: Of course, despite the modest increase, we feel it's a clear indication that workers' compensation rates may have reached their lowest point. It's worth noting that in 2023 a similar increase was proposed, but ultimately denied by Commissioner Lara. However, the current recommendations suggest a different trajectory.

LS: How might this proposed increase impact to different businesses?

SC: Well, it's important to understand that not every business will see a direct increase. In fact, some may still experience reductions in pure premium rates, particularly if they demonstrate improvements in their experience modification rate, or EMR, an overall claims experience. On the other hand, distressed accounts, those with rising EMRs and poor claims histories, may face rate hikes.

LS: Okay, that makes sense. So, you mentioned key performance indicators, or KPIs, as a tool for businesses to stay ahead of these changes. Can you explain how KPIs play into this?

SC: Absolutely. These key performance indicators allow businesses to track and compare their claims frequency and severity against their industry peers within the same governing class code. By analyzing these different metrics, companies can identify trends, pinpoint training needs, and anticipate future claims costs that could impact EMR.

LS: All right, that's very valuable insight. So in what proactive steps do you recommend for businesses to mitigate potential rate increases?

SC: Well, we would recommend businesses work closely with their claims advocates to monitor open workers' compensation claims and identify opportunities for early resolution. Additionally, reviewing KPIs regularly and implementing targeted training programs can help improve their overall claims management and mitigate future rate hikes.

LS: All right, that's great advice. So for listeners who want to learn more or discuss their specific situation, how can they reach you?

SC: They can reach me at sclayton@RanchoMesa.com or give me a call at 619-937-0167. I'm always happy to provide guidance and support.

LS: Sam, thank you so much for joining me in StudioOne.

SC: Thanks, Lauren.

AB: This is Alyssa Burley with Rancho Mesa. Thanks for tuning into our latest episode produced by StudioOne. For more information, visit us at RanchoMesa.com and subscribe to our weekly newsletter.