State Fund exists to serve all California employers as a fairly priced and open market for their workers’ compensation insurance needs. While we have much to be proud of in this regard, there is more to be done.
State Fund launched plans in 2011 to improve our operational efficiency. A geographic restructuring plan is now underway consolidating State Fund operations into fewer office locations, significantly reducing our footprint. This part of our strategic plan is progressing smoothly and we anticipate $200mm in annual savings once this plan is fully implemented by the end of 2012.
We are now taking additional steps to further improve efficiency by reducing staff at State Fund by 25% in the 2nd quarter of 2012. The positions affected by this plan are in areas where work has been greatly reduced or has disappeared over time as business processes have evolved. These changes will not affect service levels or our ability to respond to increased demand for our services.
This is a difficult step, but it is one we must take. Once complete, we expect this restructure will save $150mm in annual operating costs. The combined $350mm in annual savings will help manage the cost of workers’ compensation insurance for all California employers. Over time, State Fund will benefit from greater market stability due to an improved ability to provide fair prices, enhanced productivity, and excellent service.
