California Workers’ Compensation Insurer in the Midst of Change

California State Compensation Insurance Fund has been facing many changes recently, but it has no intent to be the dominant player in the state workers’ compensation insurance market, according to Janet Frank, SCIF’s CEO. Looking back at the Fund’s 94-year history, SCIF has an “average sweet spot of 18 to 24 percent market share,” she said.

Frank, who was appointed CEO of State Fund six months ago in October 2007, was a featured speaker at yesterday’s ninth annual Educational Forum “Forecasting the Future.” At the event, which was hosted by the Insurance Industry Charitable Foundation, Insurance Educational Association and Mt. Diablo Chapter of the Chartered Property Casualty Underwriting Society, Frank discussed changes at State Fund, since she came on board.

In her discussion, “A Fresh Look at the State Fund,” Frank likened change at her company — and throughout the insurance industry — to being in a snow globe. With the “lightning speed” of technology, the ups and downs of the financial markets, and pressures on businesses today, there’s nearly a “blizzard” of changes, she said. To cope, she advised industry professionals to:

1) Be a life long learner, constantly developing new skill sets;
2) Have consistent communications within an organization and to the public so that employees and customers are on the same page;
3) Make goals known and develop a strategy to reach those goals so that everyone in the organization can be on the same clearly defined path; and
4) Build a network to enhance your work, and to stay connected with the community in which you serve.

Without a doubt, State Fund has and is going through changes, Frank indicated. Most recently, she has been working with the state Legislature to increase the size of SCIF’s board to improve the organization’s operations. However, while the company wants to increase its board size, it has no intent to increase its market share to as high as it was prior to workers’ comp reform.

At its peak, State Fund had a market share of 53 percent, which Frank called an “aberration.”

State Fund has the dual role of being a provider of last resort, as well as a competitive player in the workers’ comp insurance market, Frank said. But the company intends to stick to its average sweet spot, “rely on the ebb and flow of all insurance companies” in the marketplace, and will adjust its business accordingly, she said.

More details on how State Fund and other companies can deal with change will be featured in an upcoming article in Insurance Journal’s West Region magazine.

Topics California Carriers Workers' Compensation Talent Market