California workers' comp brokers: Brace for double-digit rate increases
Restaurant group forecasts forthcoming market shift for workers' compensation insurance in the Golden State.
In late November, the California Department of Industrial Relations (DIR) notified all insurers that administer workers’ compensation in the Golden State that the fiscal year 2023/2024 will include billions of dollars in new assessments.
“These assessments provide a stable funding source to the support operations of the courts, to ensure safe and healthy working conditions on the job, to ensure the enforcement of labor standards and requirements for workers’ compensation coverage,” Department Director Katrina Hagen wrote in a memo dated Nov. 29, 2023. (The memo was shared with media outlets by the California Restaurant Mutual Benefit Corp., or CRMBC, which is a self-insured group run by and for restaurant owners.)
The CRMBC says workers’ comp insurance brokers should prepare clients for rate increases of about 11% in 2024 as a result of the higher assessments.
“The DIR’s decision to raise assessments to $1.7 billion represents a significant shift in our state’s insurance market,” CRMBC CEO Kaya Stanley said in a recent press release. “This development calls for a strategic and well-informed response, particularly from brokers and restaurant owners as we navigate from a soft to a hard market.”
CRMBC further advises workers’ comp insurance brokers to stay informed about market and regulatory trends, and to present clients with “comprehensive risk management consultations.”
The group forecasts the following insurance-related impacts on the vast California restaurant industry, which is projected to generate upwards of $52 billion in revenue in 2024:
- Reassessment of insurance options;
- Increased emphasis on safety and training; and
- Exploration of potential cost savings.
Changing workers’ comp market conditions, Stanley concluded, may push California employers to shop around for insurance options.
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