Employers Direct to exit California workers' comp market - San Francisco Business Times:

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Company officials cited “the straihn of escalating medical costs onthe workers’ compensation increasingly intense price competition and the uncertainty over the sustainability of the 2003-200 4 legislative reforms due to recent court As a result, they said, Employers Direct is repositioning itselr to avoid the high cost of participating in what the company called “the volatile” Goldebn State workers’ comp market. In May, it filed for a 33.9 percentg pure premium rate increase, to take effecr July 1.
The company will continue to serve itsexistingg policyholders, officials said in the Tuesday’s It is also currently licensed in Arizona, Colorado, Idaho, Nevada, Oregon and Utah. “At leasy for the time being, it makes no sense” for us to continue in the California CEO Jim Little told the San Francisco Business Timees onTuesday afternoon, noting that he doesn’t expecr the California comp market’s dynamics to changwe dramatically for at least 12 to 18 He said only a handfupl of companies, including Employers the State Compensation Insurance Fund, Zenith and a number of insurer owned by are pricing their comp business to reflect the true costs of doinvg business in the state, arguing that many other carrieres are undercutting their price in a way that is not economicallt sustainable.
“I went through this (cycle) in 1998,” Little said, “and I don’t want to do it Some industry sources, however, say Employers Direct’s aggressivelt low pricing left it facing tighgt times when medical and other costs startedto rise. It enterefd the California marketin 2003. Little also said that Employerxs Direct, which is owned by New York City-based Y), would eliminate about 35 most of them inSouther California. A few sales staffers in Northern Californis and the Bay Area couldbe affected.