Late Friday afternoon, December 31st, we closed the 2021 financial year for MTM. As we get close to the end of the year, management’s concern always increases. We have a good year and hopefully nothing happens in the last week, two weeks or month that would harm the good year that was already on the books. I’m pleased to report that no large claims occurred in the last week and month. December loss ratio looks good and that is attached to a good loss ratio year for 2021. While we have our raw loss numbers, we send our loss data for an independent actuarial review which is completed in January. This process is detailed.

Here are the steps: our calendar year loss detail (43,000 lines of information) was reviewed by the MTM CFO, Chris Doebler for completeness. Late on December 31st, he sends this report to our independent actuary. She reviews this information the first week of January and almost always has some data questions. She completes her preliminary report about January 15th. Her report is then sent to another independent actuary for a peer review. That second peer review is completed about January 25th. On January 30th and 31st, Chris Doebler, and I travel to the actuary’s office to compare all of our results and determine a final claims/profit number for 2021.

Just three days later February 3rd, management takes the actuary report and management’s recommendation to the MTM Board Marketing/ Underwriting Committee meeting. The results of this meeting is a dividend recommendation from the committee to the full MTM Board. One week later, a similar meeting is held with the MTM Board Finance Committee. There’s always a discussion and questions, and this committee then makes their recommendation to the MTM Board. Then on Thursday, February 17th, the MTM Board meets to review the two recommendations and management’s input regarding the members’ dividend. This always involves lots of questions and a lively discussion and debate ensues. The end of the full Board meeting results in a directive to MTM management on how the MTM profit will be distributed to MTM members. The directive will also include a check print date (usually 3/1) and finally a member distribution plan.

That is the process. While there are many steps to it, it is an enjoyable endeavor to see so much involvement from MTM members on what the dividends should be and how it should be constructed. The MTM board and committees are made up of shop owners, CFOs and other shop managers. There are no attorneys, no independent investment companies, no bankers. It is shop owners making the decisions that are in the best interest of MTM members.

These are all the steps that take place prior to when Megan Brown, other MTM staff and I start the annual process of delivering member dividend checks for the 7th consecutive year. I look forward to seeing you soon. – John