$1.5 Million Dividend Declared

Since 1996 the performance of MCIT’s investments and the risk management efforts of members have provided the MCIT Board of Directors the ability consistently to announce a return of fund balance to members. Once again, the board determined during its June 13 meeting that a dividend was financially sound and fiscally prudent.

During each dividend discussion, board members reaffirm that the program must remain fully funded and capable of responding to unexpected events that could affect the fiscal health of MCIT. They are also committed to returning funds not deemed necessary to the operation of the program.

This year, the overview of MCIT’s fiscal health presented by Scott Anderson, president of Actuarial Advisors, showed that investment income, commonly referred to as the fuel for generating dividends, realized marginal performance consistent with the past several years. However, favorable claims development and handling in both the property/casualty and the workers’ compensation divisions contributed to achieving the financial stability to which MCIT is accustomed.

Anderson’s report is the product of a comprehensive actuarial review of MCIT’s reserving and rate levels, net investment income and rate of return, and claims and operational performance. MCIT is consistent in its message that dividends are never guaranteed, but according to Anderson, the current financial health of the organization remains favorable.

Dividend for Workers’ Compensation Division Only

The board’s decision to declare a $1.5 million dividend in the workers’ compensation division is influenced primarily by better-than-expected claim results. Anderson’s analysis concluded that even with continued activity arising from PTSD claims and the increasing costs of medical care, the division produced positive claim results.

Anderson commented that in response to an aggregate increase in workers’ compensation rates of just 1 percent for 2024, he sees the membership’s commitment in risk management contributing to the results.

The board elected not to declare a dividend for the property/casualty division again this year. Factors including a relatively low aggregate rate increase of 1.7 percent for 2024; continuation of significant increases in the cost of both property and liability reinsurance; and increasing claim costs arising from law enforcement, property costs and auto losses in the division did not support a dividend for the period.

Anderson mentioned that steps taken by the board for 2025, including an increase in rates and modifications to the structure of its reinsurance programs, coupled with a relatively good year for losses helped build stability in the division. The property/casualty division’s financial condition is strong and remains sufficient to cover operational costs and exposure to risk.

Members participating in the workers’ compensation division will receive notice of their specific 2025 dividend later this month, with dividend checks distributed in November. Members participating only in the property/casualty division will not receive a dividend in 2025.