Sunday Scoop: Tracy's Treasure Trove/CA Workers' Comp Review - A Tale Of Two Cities

Research evidence excerpt

Sunday Scoop: Tracy's Treasure Trove/CA Workers' Comp Review - A Tale Of Two Cities

Nonlife Insurance

Sunday Scoop: Tracy's Treasure Trove/CA Workers' July 11, 2026

Comp Review - A Tale Of Two Cities

A Tale Of Two Cities: National workers' compensation has been a highly profitable

line for a decade (driving persistent reserve releases); California (the nations largest

premium volume state for WC) specifically has been the opposite story, running

accident-year combined ratios of 100%+ for six straight years. We dive into data from

the Workers' Compensation Insurance Rating Bureau of California (WCIRB) to unpack Tracy Benguigui

the drivers behind CA's deterioration, and trends we'd watch for signs of spreading tbenguigui@wolferesearch.com

(646) 419-2560

into the still-profitable national book. In our coverage, HIG is the most exposed to CA View Tracy’s Research

workers' compensation reserves, followed by AIG and TRV. View Comp Table

Dean Criscitiello

Exhibit 1 - CA WC Reserves to Total WC Reserves + Total Reserves dcriscitiello@wolferesearch.com 646-419-2562

CA WC Reserves to CA WC Reserves to

Company

Total WC Reserves Total Reserves

MKL 26.5% 1.4%

WRB 24.4% 2.9%

AIG 18.9% 4.4%

CB 18.3% 2.4%

HIG 17.0% 6.7%

TRV 14.0% 4.2%

Industry 23.3% 3.4%

Source: Wolfe Research, S&P Capital IQ

Proxy using CA WC Direct Loss Unpaid + CA WC Direct Defense Cost Containment Exp Unpaid

What WCIRB Is Telling Us

WCIRB approved on Friday a 6.6% CA workers compensation rate increase to take

into effect in September 2026, which is well behind the indicated advisory pure

premium rate change need of +10.4%. This disappointing approval is on top of last

year's +8.7% approval which again was well below the 11.2% indicated rate need.

(Last year's approval was the first rate increase in a decade).