California Scenario: Good News, Bad News

Many factors give evidence that California can expect a good year economically. Increasing employment rates and decreasing inflation rates will cause income levels to rise. California, which has experienced a dramatic budget turnaround, is expected to lead the economy in 1984. The insurance industry in California on the other hand still faces major concerns of heavy underwriting losses, company insolvency and overhead. Competition could shift to personal lines easing some of the pressure off of commercial lines. Problems with the worker's compensation are attributed to mandated rates, and heavy losses. The growth in the economy will help property casualty lines which will see stricter underwriting practices implemented.