Written premiums for workers’ compensation insurance in California dipped by 4% in the first three months of 2025 compared to the same period last year, continuing a trend of stability seen since 2022. This comes after several years of dramatic swings during the pandemic, a recent report from the Workers’ Compensation Insurance Rating Bureau of California (WCIRB) reveals.
For more than a decade, average rates charged for workers’ compensation steadily dropped, hitting record lows in 2023 and 2024. But the early data from 2025 suggests that decline has stopped, with rates inching up by about 1% compared to last year.
Rising expenses in the system have led the WCIRB to recommend an 11.2% increase in advisory pure premium rates starting September 1, 2025. California’s Insurance Commissioner, Ricardo Lara, has approved a slightly smaller hike of 8.7%.
One major reason for the higher costs is a jump in claims and medical expenses. The report shows that the combined ratio—a measure of losses and expenses against premiums—rose by 13 percentage points in 2024, reaching its highest level in over 20 years. This increase is mainly due to more claims and rising costs for medical care and claim handling.
In particular, claims related to cumulative trauma injuries have become more common, pushing indemnity claim frequency upward from 2021 through 2024. This trend follows the more stable period after pandemic volatility.
Overall, the workers’ compensation system in California is facing rising costs after years of low rates and steady premiums. While the upcoming rate increases aim to help insurers cover these higher expenses, the situation highlights ongoing challenges in managing workers’ compensation claims and costs in the state.