2025 MCIT Annual Meeting: Financial Review, Board Election

Members gathered for the 2025 MCIT annual meeting Dec. 8 in Bloomington, where they heard the MCIT financial report and details about the current state of the trust, and delegates elected one board member.

Financial Resilience Continues

Executive Director Steve Nelson provided a brief review of MCIT’s financial status, indicating that it remains strong and ended 2024 with a total fund balance of $67.5 million.

The financial report showed a stable two-year period. The amount of claims paid and reserved from 2023 to 2024 improved with a 22 percent decline. However, reinsurance premium increased 27 percent over the same period, a reflection of the hard property and liability reinsurance markets for public entity risk exposures coupled with increases in the total insured value of property. Nelson noted that since 2018, the cost of liability reinsurance has tripled for MCIT’s program.

Some of the total coverage contribution increase for 2024 was tempered by moving the property reinsurance program to a $1.5 million per claim retention from a $1 million retention.

The financial standing of MCIT through Sept. 30, 2025, supports that the program is performing as expected and is in a strong position, although the amount budgeted for claims had already been exceeded. MCIT’s policy for setting the designated fund balance to pay claims includes both anticipated claim costs (budgeted amount) and an actuarially derived margin above that to account for any deviation.

The investment portfolio continues to benefit from positive market conditions. MCIT was able to return a $1.5 million dividend in 2025 exclusively from the Workers’ Compensation division. Funds for the property/casualty division remained sufficient to pay claims.

Changes Continue for Dynamic Organization

Nelson focused his remarks to members on how MCIT has evolved to meet members’ needs over the years and how that tradition continues. This is a direct reflection of the trust’s mission: Providing Minnesota counties and associated members cost-effective coverage with comprehensive and quality risk management services.

He noted that Minnesota counties established MCIT as a risk sharing pool with a focus of paying its members’ claims at a time when commercial carriers stopped covering public entities or increased premiums to prohibitive levels. Soon thereafter, MCIT added a risk management focus to assist all members with mitigating risks and controlling losses. This work continues today and is a vital part of the pool’s financial resilience.

Risk management programs and services include the Employee Assistance Program first established by MCIT in 1996 as a way to address rising employment claims against members. Over the decades, this program has continued to prove effective.

On the coverage side, Nelson reviewed how MCIT’s program has evolved to meet members’ exposures and illustrates how risk pooling is different from commercial insurance. He noted that the land use defense endorsement arose from lawsuits against members’ that did not seek monetary damages. Before the endorsement was established, MCIT coverage, like traditional commercial insurance, would only cover claims seeking monetary damages. A benefit of participating in a risk sharing pool is that MCIT can and did change its coverage to meet the specific needs of its members.

Other coverages added over the years to address members’ risks include equipment breakdown, law enforcement canine accidental death, employee dishonesty and faithful performance of duty bond, property and liability for drones, class III dams, and cyber and data breach.

Nelson called out two significant current challenges for members and MCIT: law enforcement liability and cyber risk.

MCIT recognizes that law enforcement is a high-risk operation and requires consistent management of those risks. Nelson highlighted several initiatives MCIT has in this area to assist members:

• Benchmark Analytics works with sheriffs’ offices to share best practices developed from actual MCIT loss data to help decrease future incidents and manage them when they do occur. Additionally, Benchmark hosted six Jail Excellence workshops in 2025 that gathered jail staff together to focus on strategies they could implement to mitigate procedural risks.
• MCIT subsidizes the subscription cost of PATROL online training for deputies to make this valuable, Minnesota-specific training affordable for members.
• MCIT awarded four grants for and encourages members to increase the use of cameras in county jails.

In regard to cyber risk, Nelson shared that MCIT’s reinsurance partner for the past few years is exiting the market and that the trust is actively seeking a new partner. MCIT’s goal is to have a new reinsurance program in place by midyear and information about coverage changes will be provided at that time.

Nelson said that MCIT is optimistic the change will lead to enhanced coverage for members. However, he cautioned that members may need to meet minimum underwriting standards, which is a departure from how coverage has been offered in the past.

He acknowledged that members have been voluntarily improving their cybersecurity, both from a technical and employee training stance. He encouraged members to continue to improve their operational controls to meet this ever-changing risk landscape.

Nelson concluded by reminding members that MCIT is their program and thanking them for their continued commitment and support of it. He also thanked the board for the opportunity to help lead MCIT as its executive director. He said, “I am truly looking forward to what lies ahead.”