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State Fund reports $451 million quarterly net loss; contingency reserve falls $115 million
Summary
In the quarter ending March, L&I reported a $451 million net loss driven by higher benefits and medical-aid development; contingency reserves decreased by $115 million to about $4.8 billion and key ratios (loss ratio 142.1; combined ratio ~158%) were presented.
Kim Hurley delivered the State Fund financial overview, reporting a net loss of $451 million for the quarter ending March. She said premiums earned were about $1.7 billion while benefits incurred totaled about $2.5 billion, producing the core operating deficit. Investment income partially offset losses, contributing about $584 million in the quarter.
Hurley said the contingency reserve declined by about $115 million (from roughly $4.9 billion to $4.8 billion) over the July'to'March period. Key ratios included a loss ratio of 142.1 and a combined benefit and claim expense ratio of roughly 153.5; after underwriting and investment income, the operating ratio was about 124.8.
She broke down unfavorable developments by account: the medical-aid account showed unfavorable development of about $237 million, and accident/tpd accounts contributed additional unfavorable movements. Hurley said some favorable elements (including realized and unrealized investment gains and favorable permanent-disability development) reduced otherwise larger unfavorable totals.
Committee members asked questions; Hurley said the agency will continue to provide quarterly updates and more detail on components of the contingency reserve and budget pressures.
Ending: The agency will continue financial monitoring and present further analysis in future briefings.
