Employers Direct Leads Rate Hikes with 33.9% Filing: WEST [06/04/09]

Employers Direct Insurance Co. filed for a whopping 33.9% rate increase earlier this month, easily leading the pack of insurers filing for mid-year increases, according to the Department of Insurance website.

The Agoura Hills-based company, which entered the California market with $50 million in start-up capital at the height of the state's workers'
compensation insurance crisis in 2002, was recently purchased by Alleghany Corp. for $192.5 million. The company is unique in that it sells policies to employers directly via the Internet rather than using a network of independent agents.

No other insurer that has filed rates so far has come anywhere close to Employer Direct's filing. State Compensation Insurance Fund announced this week that it filed for a 15% rate hike.

Other rate filings:

  • CompWest Insurance Co., 7.5% increase through a change in loss-cost multipliers.
  • Seven insurers in the Travelers Group, 13% increase through revised loss-cost multipliers.
  • Six insurers in the Zurich North America group, 4.5% to 5.1% increases through revised rule.
  • Zenith Insurance Co., 4% increase in pure premium rates.
  • Liberty Mutual Group, 10% increase through revised pure premium rates.
  • Fidelity and Guaranty Insurance Underwriters, 15.5% increase through revised loss-cost multipliers.
  • U.S. Fidelity and Guaranty, 5% increase through revised loss-costs multipliers.
  • Employers Compensation Insurance Co., 10.5% increase through revised pure premium rates.
  • Nipponkoa Insurance Co., 13% increase through revised loss-cost multipliers.

The Workers' Compensation Insurance Rating Bureau recommended a 23.7% increase in the pure premium rate, but Insurance Commissioner Steve Poizner has not yet acted. A second public hearing on the proposal is scheduled for June 8 in Sacramento.

Source: WorkCompCentral

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