by Gary A. Duckworth, CPCU, ARM, Cook, Disharoon & Greathouse, Inc.
Sure looks like it. Let’s review this more closely.
The Past
In 2010 State Fund had a leading position in CA Workers’ Comp market share of 16.02%.*. Acceptable.
In 2011 that market share dropped to 12.91%.* Not good – a reduction of 20% of their piece of the pie.
In 2012 that market share dropped further to only 10.03 %.* Time for drastic action!
What was wrong with State Fund from the broker’s perspective? Mostly, State Fund was just priced too high. By mid-2012, State Fund was being used too significantly for the toughest classes, or for risks that could not be placed with any other Carrier. For our construction accounts, with a distressed economy, moving away from State Fund was rampant.
The Present
So, where are we now? In late 2012, State Fund’s Board approved a $100 million dividend to qualifying policyholders for the 2012 policy year. That’s an impressive 10% of total premiums – and a pretty good indication of a turnaround. Distributions of 2012 dividends start in July 2013 (dividends are not guaranteed-check with your broker for ALL qualifying criteria). State Fund notes that the dividends are the result of 1) sound investment returns, 2) “disciplined” pricing, and 3) improved efficiencies. We acknowledge these points, but we especially like that their pricing is competitive again, & we get to move clients back to them for the savings.
The Future
In 2013, & ahead, we are again submitting ALL of our Workers’ Comp accounts to be quoted by State Fund. State Fund will be using a new 3- tiered pricing rate structure – new criteria will apply to all risk factors. So far, they are competitive on many accounts that, frankly, surprise us. Later, in 2013 we hope, State Fund will also enable appointed brokers to use their proprietary “Price Now” system. This will allow us to obtain up front tier AND price indications. Good for the Employer, and good for us, too.
If you are not currently insured with State Fund, I enthusiastically encourage you to take a look at the many benefits of group coverage with the Bay Area Builders Exchange, GROUP 825.
***
Gary A. Duckworth, CPCU, ARM
gduckworth@cdginsurance.com
Cook, Disharoon & Greathouse, Inc.
www.Cdginsurance.com
1900 Embarcadero, Ste. 206
Oakland, CA 94606
Ph. 510-437-1900, ext. 106
*California Dep’t of Insurance; NAIC Database/Rate Specialist Bureau 4/25/2011, 4/18/2012, 4/30/2013