California signed off on the most significant workers' compensation rate reductions approved across the U.S. in the third quarter.
All 10 of the most notable rate cuts in the period were approved in the Golden State, according to an S&P Global Market Intelligence analysis. These reductions follow the trimming, effective Sept. 1 of the pure premium benchmark of 1.41% issued by the California Department of Insurance.
A rate reduction approved for a The Travelers Cos. Inc. subsidiary in California looks to have been the most significant single rate action taken during the third quarter. The 5.6% rate decrease for Travelers Property Casualty Co. of America stands to reduce the company's calculated premium written by $24.0 million. The rate cut will impact nearly 30,000 policyholders in California.
Several noteworthy rate decreases in California were also approved for subsidiaries of Great American Holding Inc. Four rate reductions for the group stand to lower its estimated workers' comp premiums by $9.3 million. A pair of those rate cuts were featured in the list of the most notable rate decreases during the quarter.
Overall, California and Illinois tied as the busiest states in terms of the total number of rate reductions approved during the third quarter. Both states signed off on 48 rate decreases in the period, though California's actions look to have led to much more significant premium reductions. In total, the rate cuts in California stand to lower industry premiums by $86.5 million, while the reductions in Illinois look to have a negative impact of $23 million.
Rate increases approved in the third quarter stand to affect workers' comp premiums far less than the reductions. The industry received 110 rate hike approvals across 32 states and the District of Columbia that, in total, could lead to premium increases of $8.6 million.