Frank-ly Speaking

New president aims to turnaround workers’ comp insurer

As the new president of California’s State Compensation Insurance Fund, Janet Frank is expected to integrate and improve operations at the state workers’ compensation insurer. SCIF faced setbacks over unethical practices in late March and early April, which led to the firing of former president James Tudor.

An experienced executive who has held top positions at CNA, St. Paul Companies, USF&G and Fireman’s Fund, Frank’s experience is what the organization needs to implement improvements, SCIF says. She has only spent a few weeks on the job, but employees say Frank is already energizing the company.

On day 14 on the job, she declined to discuss the ongoing investigations and audits being conducted by the state Highway Patrol and Department of Insurance. But Frank did share her vision for the company.

Insurance Journal: SCIF has faced difficulties recently. What’s top on your list of goals?

Janet Frank: The first thing that I’ve wanted to do is focus internal and external communications, understand the stakeholders and priorities. I want to get my arms around my organization … meet all the people to find out what’s working well and what’s not. We’ve begun a series of reviews of the various functions, what the challenges and opportunities are in managing the business today, and what we need to do differently moving forward. We’ll be looking at the expense structure.

IJ: What are your top challenges?

JF: There’s a business challenge and expense ratio challenge. Business is getting more competitive. There’s a challenge in retention, plus getting a certain amount of new customers, and serving all customers.

We have a two-fold strategy to serve both in the competitive market and to serve all employees in the residual market. With that charge, it’s important to have balanced book of business, looking at retention and managing expenses, and making sure we have the right amount of staff to serve the organization. We’re doing a deep dive into the organization in all processes and procedures.

IJ: In your opinion is SCIF overstaffed?

JF: You could suggest that the organization needs to be looked at because revenue has been dropping and staffing levels have not been consistent with that. We’re starting to look first at outside services and at expenses that have nothing to do with the people side.

This organization started in 1914. Throughout the years, the percentage of market share has been 14 percent at the low-water mark up to the low-50s at the high. We were sitting with 23 to 24 percent market share at the beginning of year.

Business is cyclical, so we want to make sure we have the right amount of people for all functions. We do that in context of how big the organization is and the size of State Fund looking at historical numbers, looking at the boundaries of what the appropriate manpower and expense should be in an organization of our size. We’re taking into account the ebb and flow of the cyclical market.

IJ: You mentioned market share. What do you see as the primary function of State Fund — a competitor of the private sector or a market of last resort?

JF: Our charter is both. I can’t say SCIF should be absolutely in this number. (We’re) responsive to the market. This is a cyclical business, so as rates get away from us and losses increase, carriers respond. The reality is SCIF is here regardless. One of our initiatives is to stabilize the platform and be prepared for market cycles. We need to know how far we can expand and contract, and be staffed accordingly for that.

IJ: What enticed you to pursue this job?

JF: Working in the private industry prepared me for this opportunity. (At) the St. Paul companies, I was over underwriting, distribution, marketing, actuary and finance. At CNA, with the $6.5 billion portfolio I controlled, I also oversaw risk control and distribution. This led me to wanting to run my own company. I also have had very strong interest in public service work. When I read about the challenges going on at State Fund, I thought my skills would lend themselves to the organization.

The board thought the skill sets I have could bring around organizational change, strategic planning and process improvement, and were a good fit. The timing worked out well.