A surge in cumulative trauma claims is pushing up California workers compensation claim frequency and administrative costs while putting pressure on insurers, according to the Workers Compensation Insurance Rating Bureau of California.
Examining a barrage of data, cumulative trauma claims have become the primary driver of cost increases, Tony Milano, WCIRB executive vice president and chief actuary, said Thursday at the bureau’s annual conference.
California indemnity claim frequency rose to 17.8 claims per 1,000 employees in 2025 from 15.1 in 2022, an increase of nearly 18%, WCIRB data shows. Excluding cumulative trauma claims, frequency rose 4.7%, to 13.4 claims per 1,000 employees from 12.8.
Cumulative trauma claims accounted for a preliminary 26.6% of indemnity claims in 2024 and 31.6% in 2025, more than double their share 15 years earlier. For accident years 2022 through 2024, such claims represented 22% of California claims, compared with less than 6% in states tracked by the National Council on Compensation Insurance.
One factor driving increased frequency is the rate of permanent partial disability claims. California has 541 PPD claims per 100,000 employees, which is about three times the national median of 178.
The claims also generate frictional costs. About 60% of recent cumulative trauma claims were filed after employment ended, more than 90% were litigated, 25% had no medical payments at 18 months and 30% had a medical-legal or interpreter service as the first paid service, according to the WCIRB.
Average allocated loss adjustment expenses per indemnity claim rose to $13,860 in 2025, increasing an average of 9% annually since 2021. Medical-legal services per claim were 28% higher in 2025 than in 2014, with utilization from 2020 to 2024 rising 38% for cumulative trauma claims and 2% for non-cumulative trauma claims.
Cumulative trauma claims also tend to remain open longer. About 22% were open after five years, compared with 12% of non-cumulative trauma claims. Overall, 15% of California indemnity claims remained open after five years, more than three times the nationwide median of 4%.
The influx of lower-cost claims at early evaluation points, however, appears to be suppressing average severity figures. Average indemnity cost per claim fell to $29,670 in 2025 from $30,564 in 2024, while average medical cost declined to $33,511 from $35,196.
The trends are emerging as insurer results deteriorate. The projected accident-year combined loss and expense ratio rose to 127% in 2025 from 124% in 2024, the second consecutive year above 120%. Written premium remained stable at about $15.6 billion, and the average charged rate fell to $1.56 per $100 of payroll, its lowest level in more than 50 years.
The California Department of Insurance approved a 6.6% average advisory pure premium rate increase effective Sept. 1, 2026, following an 8.7% average increase effective Sept. 1, 2025. Even after both increases, advisory pure premium rates remain 46% below their 2014-2015 high.
Panelists said the system’s short claim-decision deadlines, delayed medical-legal evaluations and frequent litigation make cumulative trauma claims difficult to resolve. Employer and applicant representatives disagreed over whether claims are denied too quickly, but agreed that better early information and reforms could reduce delays and costs.
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Based in New York, Stephen Freeman is a Senior Editor at Trending Insurance News. Previously he has worked for Forbes and The Huffington Post. Steven is a graduate of Risk Management at the University of New York.