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English español

President’s Letter

As I look back at 2023, I am very proud of our performance, and I will discuss a few of our many accomplishments a bit later. But I’d like to focus first on how our performance last year—and over the past several years—has set us up so well for the future.

First, we are in the strongest financial position we have ever been in during my tenure. There are several reasons for this, but the most important is our claims performance over time. Our claims team has significantly reduced our open claim counts and allowed us to release loss and loss adjustment expense (LAE) reserves amounting to $1.9 billion over the past five years. Those releases, in addition to our underwriting effectiveness and investment management performance, have allowed us to declare dividends for five consecutive years.

Second, we introduced a new pricing structure in early 2024 and are now prepared to be more competitive in the market for business that has generally been difficult for us to write. We are also able to more fairly and accurately price all of our business, including the risks that likely do not have other options in the market. This means we are able to be more competitive while at the same time maintaining our financial strength.

Those two key components—our financial strength and our more competitive and accurate pricing—set us up very well for whatever the markets and the economy throw at us over the next several years.

Key Actions and Results in 2023

Over the course of the year, we demonstrated significant progress across a number of initiatives and demonstrated positive results in key operational areas. Here are just a few examples:

  • With our fifth consecutive dividend, we will return approximately $108 million to policyholders with a policy inception date in 2023. Over the last five years, we've declared approximately $500 million in dividends.
  • We exceeded all of our claims and legal quality and timeliness measures. As I mentioned briefly in my introduction, our excellent financial performance over the past few years is due largely to the incredible performance of our claims team.
  • We continued to increase our use of automation and artificial intelligence. A good example of this includes the launch of our UR Connected - EMR system that allows our medical providers to electronically submit Requests for Authorization (RFAs), including supporting medical reports. Our UR Connected system instantly determines whether we can approve a treatment request or whether that request needs further review.
  • We exceeded the Finance and Insurance Industry benchmark for overall employee engagement score for the fifth year in a row. Our employees continue to tell us that they appreciate the flexibility that our remote work model provides. And most importantly, our performance across our goals tells us neither productivity nor engagement have suffered since we allowed our employees to choose where they work.
  • We successfully launched a Safety Equipment Grants program on November 1. To date, we’ve provided 223 policyholders with grants totaling $1.42 million to purchase safety equipment for more than 1,928 employees working at height. Those policyholders have purchased 803 fall protection harnesses, 481 self-retracting lifelines, 420 roof anchors, 802 ladders and stabilizers, and many other items.
  • We exceeded the Insurance Industry benchmark for our policyholder customer satisfaction and customer effort scores. 
  • We implemented Five9, a new omni-channel call center platform with expanded capabilities.
  • We redesigned and relaunched StateFundCA.com—our customer-facing website—on a new content management system that makes it much easier to make changes and adapt to our customer and business needs.
  • Nearly 1,750 employers signed up for our Online Safety University by the end of 2023. That included more than 7,000 California workers and—since most employees sign up for multiple classes—more than 18,800 courses completed overall.
  • More than 7,500 employers in California used our online Injury and Illness Prevention Program (IIPP) Builder. Cal/OSHA continues to link to our tool from their website, and last year we began inviting employers to complete an IIPP as part of the application for the Safety Equipment Grant Program.

Financial Highlights

Here are our 2023 financial highlights, which are described in more detail in this report:

  • Net premium earned were $1,140 million in 2023, which was 2.9% lower than the prior year.
  • Our combined ratio of 83.7% was 50.7 points lower than the prior year.
  • Our net investment income was $556 million, which was $50 million higher than the prior year.
  • Our net income before dividends was $623 million, which was $442 million higher than the prior year.

As I consider 2024 and beyond, I am excited and optimistic about our future. We have so much work ahead of us to get where we need to go, but I believe we have the people and the resources we require to get there.

Sincerely,

Vern Steiner

President & CEO