Spending quality time with his family, followed closely by hiking, is what Tom Rowe enjoys most, but he also loves the insurance business and says he plans to bring that passion to State Compensation Insurance Fund. Rowe just stepped in as State Fund’s new president and chief operating officer, and as such still has much to learn about the inner workings, but he’s ready for the task. Considering the ups and downs, the shifting fortunes, and at least one sizeable scandal, Rowe’s willingness to take on State Fund begs the question: What was he thinking? We asked precisely that, and after some shared laughter, we found that his answer shows his dedication. Rowe gave Workers’ Comp Executive this exclusive interview:

“Workers’ compensation was always a major part of what I’ve done.”

“I fell in love with the business. I loved the basic message and the basic product that the industry at its finest delivered, and that is protection from the uncertainties of life, whether it’s the life of a family or an individual or the life of a business,” says Rowe, who began as a commercial casualty underwriter. “Workers’ compensation was always a major part of what I’ve done.” And after being in California for 18 years, he knows what he’s jumping into.

“If you have a position of responsibility at Fireman’s Fund, it’s kind of hard not to be deeply involved and fully invested in the work comp market of California, so even before arriving in the state 18 years ago, I was well aware of the marketplace and the role State Fund had as the leading competitor in this space,” Rowe says. “So I was pretty much a student and a competitor, an observer of the State Fund probably for the last 20 years.”

Experience with State Funds

Rowe is no slouch. He started as a trainee at Hartford and spent almost 25 years with Fireman’s Fund, serving as the president of the Commercial Insurance Division. He joins State Fund after running his own firm, T. Rowe Strategies, a consulting firm serving the commercial property and casualty industry. He’s also no stranger to the function of state funds, having worked with the American Association of State Compensation Insurance Funds (AASCIF) on a variety of initiatives and products, including those that keep state funds profitable.

“Most of my work involved consulting on products that focus on account retention: how to improve state funds’ ability to retain important profitable accounts, how to help state funds write new business that they believe was possible that they wanted to write.”

“The charters of all those state funds are very, very similar. And it puts my industry in its best light, and that is focusing on initiatives, products and services that incent and promote workplace safety, and reduce the frequency and severity of injuries,” Rowe says.

As for best state fund practices, he holds off on recommending one state fund’s structure over another. “I would make one or two really good friends, and find many others if I answer it,” he says.

Asked about market share, he says, “State funds across the nation, they run from 100% of the market, down into the teens, and [there are]  examples of highly efficient state funds operating at 70%, and there are highly efficient state funds operating at 15%. I think it all really depends on the mission and the strategy and the capabilities of the individual fund.”

You can get a sense of Rowe’s experience and possibly his future focus based on his role in the AASCIF community.

“Most of my work involved consulting on products that focus on account retention: how to improve state funds’ ability to retain important profitable accounts, how to help state funds write new business that they believe was possible that they wanted to write,” Rowe says.

As the newly minted president of State Fund, he still needs to familiarize himself more with the inner workings of the carrier before he can expound on improving loss ratios, appropriate market share, and a changing corporate culture, although he complimented our legitimate questions. He sees State Fund as a unique player in the marketplace and not just as a carrier of last resort for employers.

“When a workplace injury takes place, let’s get the right care as quickly as possible so we can return that injured worker to his or her life pursuits, including [his or her job], as quickly as possible,” he says.

 Future Culture

Rowe hesitates to discuss any changes he will bring to State Fund until, as he puts it, he gets his feet wet. But he supports changes that have taken place to this point, including the 2008 legislation that subjected SCIF to the California Public Records Act and the Bagley-Keene Open Meeting Act. Transparency is something he plans to enforce.

“I hope to conduct myself in a straightforward, honest manner, full disclosure…I operate in a transparent way. I want to be clear. I want people to be clear with me,” Rowe says, adding that some items should be confidential.

“I believe in fair dealing, in straight dealing, and certainly have no problem with those operating rules,” Rowe says.

In keeping with that, Rowe says he wants it straight. If State Fund fails in its mission, ignoring openness and transparency, or makes bad business decisions, he wants to know.

“I think bad news is the way you learn the most. So as long as it’s honest, I want to know the good and the bad of it,” Rowe says.