State Fund's 2009 Financial Results

SAN FRANCISCO, March 12 /PRNewswire/ -- In a report to more than 4,000 California brokerages that do business with State Fund, Doug Stewart, Interim President and CEO of State Compensation Insurance Fund, today announced that California's largest provider of workers' compensation insurance ended 2009 with $1.25 billion in net premium earned, and $143 million in net income.

The net income figure for 2009 is significantly higher than the $75 million in net income that State Fund earned in 2008.

Stewart said: "I'm particularly pleased with our financial and operational performance this past year given the challenges we face."

He added that State Fund's conservative and steady-handed approach "has allowed us to maintain a strong capital base while making needed investments in our organization."

Stewart said 99.8 percent of State Fund's investment portfolio was rated NAIC 1, the highest rating that the National Association of Insurance Commissioners gives to investments.  

While State Fund gained in net premium and income, Stewart noted the company’s loss adjustment expense (LAE) ratio presented a more difficult challenge. The agency’s LAE ratio increased to 46 percent in 2009, up from 36.7 percent in 2008, contributing significantly to a 161.5% combined ratio in 2009.  Stewart attributed this increase to a “substantial legacy of open claims dating from 2001 to 2006, when many carriers either became insolvent or left the California market.  State Fund assumed an unusually high market share to ensure California’s businesses and injured workers would be covered. Although the LAE and resultant combined ratio are above industry benchmarks, State Fund is successfully managing through this challenge.  We expect these ratios to return to more traditional levels over the next few  years as these claims are resolved.”

In his announcement Stewart asserted that State Fund is well positioned to continue to provide California's businesses a strong and stable choice for their workers' compensation insurance.

EDITOR'S NOTE: Established in 1914 by the state legislature, State Fund is California's largest provider of workers' compensation insurance and a vital asset to California businesses. Completely self supporting, State Fund plays a stabilizing role in California's economy by maintaining an open door policy that ensures that all employers have a strong and stable option for their workers' compensation needs.

 

SOURCE State Compensation Insurance Fund