Ep. 498 Workers Comp Rate Increases Are Here - Are You Prepared?
Rancho Mesa's Alyssa Burley sits down with Sam Clayton, Vice President of the Construction Group to discuss about the workers’ compensation rate increases in California.
Show Notes: Subscribe to Rancho Mesa's Newsletter
Host: Alyssa Burley
Guest: Sam Clayton
Editor: Megan Lockhart
Music: "Home" by JHS Pedals, “Breaking News Intro” by nem0production
© Copyright 2025. Rancho Mesa Insurance Services, Inc. All rights reserved.
Transcript
Alyssa Burley: You’re listening to Rancho Mesa’s StudioOne™ podcast, where each week we break down complex insurance and safety topics to help your business thrive.
I’m your host, Alyssa Burley, and today I’m joined by Sam Clayton, Vice President of the Construction Group with Rancho Mesa. And, we’re going to talk about the workers’ compensation rate increases in California.
Sam, welcome to the show.
Sam Clayton: Thanks Alyssa, great to be back in StudioOne.
AB: Now, the California workers’ compensation market is hardening after many years of decreases, according to a very recent article you co-wrote with Matt Gorham, one of our Account Executives with Rancho Mesa.
So, tell our listeners, what’s happening in California right now that will impact business owners and their workers comp premiums?
SB: Yes, Matt and I just published an article where we explain that the Governing Committee of the Workers’ Compensation Insurance Rating Bureau, also known at the WCIRB, voted in favor of recommending an 11.2% rate increase. If the California Department of Insurance approves the WCIRB’s request, it would make the first rate increase in more than a decade.
AB: And that’s significant, right? We’re used to seeing auto insurance premiums rise over the years, but we haven’t really seen this with workers’ comp. So why do you think it’s happening now?
SB: Well in recent years, wage inflation has helped to offset rising medical care and claims handling costs within the workers’ comp system, while carriers’ reserve redundancy releases have also contributed to the soft market we’ve been in. With reserve redundancies declining and wage inflation stalling, the effect of rising costs in the workers’ comp system are becoming more noticeable. Add to that the diminishing investment returns that carriers have seen, the need for rate increases and stronger underwriting performance becomes even more pronounced.
AB: Ok, so what are you doing to help your clients prepare for the coming change? Or even better yet, what should all brokers be doing to help their clients prepare?
SB: So, there are four things that you should be doing. First, understand your client’s workers’ comp claims - meeting with your insurance broker throughout the year can help you identify trends and underlying root causes for your claims. This can help you to implement practices and procedures that reduce the likelihood of the same type of claim from recurring.
As an example, we identified that lower back strains were among the most common work injuries in one of the industries that Rancho Mesa specializes in, which led our team to develop the Mobility & Stretch program and A.B.L.E. Lift protocol to help prevent these types of injuries.
Then, along those same lines, look to see what type of safety resources your broker can provide. A strong safety culture depends on individuals consistently making safe choices and having access to the tools they need. Among other resources, Rancho Mesa provides clients with SafetyOne™; a safety platform that offers a suite of tools to implement safe practices, such as a library of toolbox talks, online training, and safety observations, all from a mobile device.
Next, we utilize a workers’ comp claims advocate. The workers’ compensation process can be very complex and costly. We offer an in-house Workers’ Comp Claims Advocate to help navigate the claims process, manage claims, and provide accountability to adjustors. Leveraging your broker’s Claims Advocate can help manage the overall impact of claims on your insurance costs.
Lastly, we can explore loss sensitive plans. We can help you evaluate a variety of loss sensitive options, such as Captives, Self-Insured Groups, large, intermediate and small deductible options, or Retro plans to see how they compare against guaranteed cost marketplace. Having access to more product options allows for more relevant, effective advice on which program best meets your companies risk tolerance.
AB: Thank you for sharing those. And our listeners can now talk to their brokers about how to prepare for the increase.
Now, when will we know the final decision?
SB: The final decision from the Department of Insurance should happen in the next couple weeks, and will take effect September 1st of this year. While these increases will not directly impact you until your next renewal, taking action now will help your company prepare for the coming critical changes. Rancho Mesa is staying informed, has the resources available and most importantly the proactive commitment to help you navigate the approaching storm.
AB: Sam, if listeners have questions about their workers’ comp or what these rate increases mean to them, what’s the best way to get in touch with you?
SC: You can reach me at sclayton@ranchomesa.com, and my direct line is (619) 937-0167.
AB: All right. Well Sam, thank you for joining me in StudioOne.
SC: Thanks Alyssa.
AB: Thanks for tuning in to our latest episode produced by StudioOne™. If you enjoyed what you heard, please share this episode and subscribe. For more insights like this, visit us at RanchoMesa.com and subscribe to our weekly newsletter.