PERMA-administered JIFs have substantially lower non-claim costs. Based on audited financial reports, PERMA-managed JIFs average 85% of final cost for claims. According to the MEL’s actuary, the commercial property & casualty insurance companies nationwide average only 69% for claims, including defense costs and the cost of adjusting claims.
PERMA-administered JIFs have the lowest administrative costs in the state. Specifically, PERMA’s management fees average only 2.7% of total cost as compared to 5.1% for all other local unit New Jersey JIFs. According to the Association of Government Risk Pools (“AGRIP”), 35% of JIFs in the country use contract management. AGRIP also concluded that JIFs with contract managers have lower administrative costs, on average, than pools with their own staffs. PERMA’s administration costs are the lowest in the country of any pools surveyed.
Another advantage of retaining a management company is that the commissioners are not required to spend countless hours on the administrative issues associated with employees. Rather, they can focus on risk management.