PERMA-administered JIFs have substantially lower administration costs. Based on audited financial reports, PERMA-managed JIFs average 15% for administration (including sales costs) leaving 85% for claims. According to the MEL’s actuary, the commercial property & casualty insurance companies nationwide average 31% for non-claim costs, leaving only 69% for 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 New Jersey JIFs. According to the Association of Government Risk Pools (“AGRIP”), JIFs with contract managers have lower administrative costs, on average, than pools with their own staff. 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.