MTM — It’s Members, It’s Board

I am frequently asked “how is MTM different than commercial insurance carriers?” After my 50 years in insurance, many years at a commercial insurance company, it is a question I enjoy answering. The difference between a specialty mutual company owned by its members and a large investor-owned insurance company is huge. Priorities/goals at the top of the small mutual are vastly different from a multi-state, multi-coverage commercial insurance company. So let me start with the MTM Board of Directors and what happened in October.

During the first half of October, the MTM Board held two Committee meetings. The first was the Board Marketing/ Underwriting Committee which is made up of six MTM members who received and reviewed management reports on the status of marketing efforts and our association work. They also wanted to know current underwriting results and if any changes had been made in underwriting status or rules that they should sign off on. The second meeting was the Board Finance/Investment Committee which also consists of six MTM members and receives the quarterly updated financials and of course has questions looking for clarification and providing input. We spent time reviewing the approximate $60 million that is invested by MTM. Our investment manager reviews current market status and anticipated changes. The Committee members talked about our investment mix and changes that might be necessary because of the rapidly changing investment world.

After these two meetings, a week later there is the full MTM Board meeting. The Board is made up of 12 members, some of which are on Committees but many others that are not. In total we have 16 members involved in the Board Committee and Board activities. The goal of these members is to give management direction and input on items that are important to MTM members. We have no outside investors at MTM therefore there is no outside control. This work is directed towards maintaining the financial condition and profitability of MTM. The most important aspect is to make sure MTM is financially strong and continues its Arating from the insurance rating organization A.M. Best. We also maintain our excellent rating from a second rating agency called Demotech. Right after confirming that the company reserve accounts are strong, the Committee’s next responsibility is to direct the company to profitability and a members’ dividend. From the October meetings and with 10 months of the year in the books, based on what we know today, MTM will have a profitable year in 2024. The Board and the staff at MTM are working hard to close this year with a members’ dividend. The members’ dividend is reviewed at the end of January and paid the first of March. The Board, it’s Committees and the staff have successfully paid a significant dividend for the last 10 years. Each of those teams is driven to have the 11th consecutive member dividend.

Commercial carriers do not have members that are advising and directing the management team. They have investment bankers, CEOs from other industries and attorneys. That is a significant difference for MTM. The Board and Board Committees give the MTM long tenured staff guidelines and guardrails to successfully develop programs and maintain profitability for the benefit of 964 MTM members. MTM does not have any outside investors/stockholders that direct the activity or focus of MTM management. MTM’s sole purpose is to benefit our members.

I hope that gives a picture and it’s an area that, when I meet members, often comes up and asks why we are different. In the meantime, the MTM Board Committees, Board and staff will be focused on completing the year successfully and producing our 11th consecutive member dividend. An important component of the dividend is the loss prevention activities of our members. This is a perfect time to remind you, our member, how important your loss control activities are to generate an owner dividend at the end of the year.

With summer vacations over, our fall member meetings are increasing, I hope I get to visit your shop.