The California Workers’ Compensation Institute published its FY 2024/25 summary of public self-insured employers on January 14, 2026, drawing on annual report data filed with the California DIR Office of Self-Insurance Plans (OSIP). The numbers cover 2.26 million workers and $189.2 billion in payroll, making this the largest public self-insured dataset in the country. With NCCI’s Annual Insights Symposium opening May 11 in Orlando, the California data previews the severity story Chief Actuary Donna Glenn is expected to address in the State of the Line report.
Who It Affects
Self-insured cities, counties, school districts, transit authorities, hospital districts, and other public entities in California. Any public employer retaining workers’ comp risk through a self-insured program, joint powers authority (JPA), or public entity pool that benchmarks against statewide experience. Public self-insured employers in other states should watch the pattern: California’s scale makes it a leading indicator for medical severity trends nationally.
The Numbers
Claim frequency fell 0.8% to 5.2 per 100 employees, tying the 10-year low and extending a third consecutive year of declining claim counts. Total initial claims reported came in at 117,190.
But costs moved the other direction. Total paid losses at first report rose 7.6% to $594.9 million, a new record. Average medical payment per claim jumped 13.1% to $2,154, the third straight double-digit increase and a 10-year high. Average indemnity payment per claim rose 5.3% to $2,922, reflecting continued wage inflation in indemnity reserves. Total incurred losses climbed 5.8% to over $1.78 billion despite the declining claim counts.
The paid-to-incurred gap is equally telling. Average paid per claim was $5,076 while average incurred per claim stood at $15,225, a ratio of roughly 33%. That gap signals substantial unpaid medical and indemnity exposure remaining on open claims.
Reserve Mechanism: Severity Outrunning Frequency
The core risk for self-insured employers is that frequency-weighted projection methods mask the severity acceleration. If an actuary is projecting total loss costs as a single blended trend, the math looks manageable: frequency down slightly, total losses up mid-single digits. But separating the components reveals a different picture. Medical severity is running at 13% annually. Indemnity severity is running above 5%. Frequency relief of less than 1% does not come close to offsetting either.
This matters most in the development triangle. If loss development factors were calibrated during a period of moderate severity growth (say 3% to 5%), they will understate the tail on recent accident years where severity is running at double or triple that rate. The 33% paid-to-incurred ratio reinforces the point: two-thirds of estimated ultimate cost on these claims remains unpaid, and the severity trend on that unpaid portion is accelerating.
What This Means for Your Next Review
Ask your actuary whether they are separating frequency and severity trends in the WC reserve analysis or projecting total loss costs as a single metric. If medical severity is running at 13% while frequency is flat, those two components should be modeled independently, especially for recent accident years where most of the loss is still unpaid. Request your program’s paid-to-incurred ratio on open medical claims and compare it to the California benchmark of 33%. A ratio that is wider suggests even more unpaid exposure sitting in the tail.
What to Watch
NCCI’s State of the Line report at AIS 2026 on May 12 will show whether the national data confirms double-digit medical severity growth alongside flat frequency. If it does, self-insured employers in all states should revisit severity trend assumptions before year-end reserve reviews. We previewed the three reserve signals from NCCI’s preliminary data earlier this month.