SCIF to lay off up to 1800 employees

By CMTA Staff

Capitol Update, Oct. 14, 2011

The quasi-public State Compensation Insurance Fund (SCIF) is planning to lay off between 1,500 and 1,800 employees in jobs by the end of the 2nd Quarter of 2012 – jobs officials say have been crowded out by evolving technology and business practices as the insurer battles for market share and tries to hold down its expenses.  SCIF estimates it will save $150 million per year in employee costs.

SCIF spends 90 cents for every dollar of premium it writes, while the industry average is 40 cents. Meanwhile, the compensation insurance landscape has changed significantly with SCIF being slow to respond.  In 2005, the Fund controlled 53 percent of California's workers' compensation insurance market and employed 9,300 people.  Since 2004, however, its premium volume has fallen 87 percent and its market share has decreased by 70 percent.

The layoff announcement comes as the fund is consolidating offices, shedding real estate and moving some employees from expensive-to-operate areas such as San Francisco and Oxnard to cheaper areas such as Bakersfield and Vacaville.  SCIF expects to save $200 million over three years from these moves.

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