Analysis of gross ultimate loss and allocated loss adjustment expense from California-based cumulative trauma claims

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By Kenneth Carlton III, Guy A. Avagliano | 17 August 2012

In recent years, the National Basketball Association (the NBA), The National Hockey League (the NHL), The National Football League (the NFL), and Major League Baseball (MLB) have experienced an unprecedented increase in the frequency of cumulative trauma (CT) workers’ compensation claims filed in California. In 2012, Milliman provided the NBA, the NHL, the NFL, and MLB (collectively referred to as The Leagues) with an independent actuarial analysis of the economic impact of their California CT claims, based on data and information provided by The Leagues from 12/31/11 through 7/26/12.

This report evaluates The Leagues' overall exposure to California CT claims and provides consolidated results for all The Leagues. Milliman finds that estimated ultimate losses from California CT claims filed and expected to be filed by players who participated in their sport during the past thirty years is $1.573 billion (range between $1.035 billion and $2.595 billion). This report quantifies the losses associated with currently filed claims, claims not yet filed, claims filed by players outside of California, as well as the potential losses arising from future retirements of current players, the impact on statewide workers compensation premiums, and a discussion of the expected trend for such claims.