Recent Social Security Reforms in France

Like covered payrolls and total benefit payments, the costs of workmen’s compensation were about 10 percent higher in 1969 than in 1968. As a result, employers continued to spend for the third consecutive year the same proportion of their payrolls to insure or self-insure their risks under workmen‘s compensation program-about $1.07 per $100 of payroll in covered employment. In earlier years, the rate had been lower-$1.02 in 1966 and $1 in 1964 and 1965. The estimated cost of workmen’s compensation in 1969 was $4,441 million, an increase of more than $400 million over the 1968 estimate of $4,030 million. The 1969 total consisted of (1) $3,255 million in premiums paid to private carriers; (2) $792 million in premiums paid in State funds (for the Federal programs financed through congressional appropriations, these “premiums” are the sum of the benefit payments and the costs of the administrative agency) ; and (3) about $395 million as the cost of self-insurance (benefits paid by self-insurers with the total increased by 5-10 percent to allow for administrative costs). With total benefit payments and costs rising at the same rate in 1969, the B-year decline in the proportion of the premium dollar going for benefits was halted. This proportion reached 58.8 percent in 1968 and 1969, after a steady decline from a high of 64.1 percent in 1962. The same trend shown for all business is seen when the experience of private carriers alone is examined. The ratio of direct losses paid ‘to direct premiums written (commonly termed the “loss ratio”) held steady at 50.4 percent in 1969 after dropping gradually from a high of 56.0 percent in 1962. h ratio based on losses incurred (which includes amounts set aside to cover liabilities from future claims payments) would be higher. According to Spctator data, losses incurred by private carriers represented 62 percent of net premiums earned in 1969-as in 1968. With the Federal program excluded, State funds also show a steady decline in the loss ratio since 1962 when benefits paid equaled 78 percent of premiums written. The leveling off, however, began before 1969 and for the past 3 years the loss ratio has remained at 67 percent. The loss ratios for private carriers and, to some extent, for State funds do not take into account the premium income returned to employers in the form of dividends. Available data indicate that dividends when related to total premium payments (for both dividendand non dividend-paying companies) generally average about 4-6 percent.