State Compensation Insurance Fund’s 2013 Annual Report, released on its Web site today, shows an increase in net premiums to more than one billion dollars and a decrease in its combined ratio of more than 10 percent. The strong growth in 2013 premiums was a result of a hardening market combined with its introduction of Tiered pricing in March. Other key financial highlights for 2013 include:

1) A $100 million dividend;
2) Policyholders’ surplus increased by six percent compared to last year;
3) More than 98.4 percent of its bond portfolio received the National Association of Insurance Commissioners’ highest quality credit rating.

State Fund maintained a balanced investment portfolio that was focused on both credit quality and investment yield. In 2013, State Fund started investing in stocks as a result of the passage of SB 1513 which expanded State Fund’s investment authority. At year end, State Fund had $917 million in common stocks.

“State Fund has seen tremendous successes in one hundred years of doing business and supported those that have shaped California to succeed and grow,” said Carol Newman, Acting President and CEO in the report. “As we enter our next century, we’ve implemented an ambitious plan to redesign our operations and reduce costs to California’s employers, making us a financially stronger and more efficient organization.”

In 2010, State Fund began a transformation that has reduced annual fixed expenses by $300 million dollars. These savings will help State Fund maintain fair pricing and bring greater value to more California employers.