The MTMIC Board of Directors is pleased to inform you that at the last Board Meeting the Board Members unanimously passed a resolution setting the stage for a Policyholder’s Dividend in the first quarter of 2015. Final determination of the dividend will be made in February 2015 once the 12/31/14 financial results are finalized. It is anticipated that the Policyholder Dividend will be based on policyholder premiums paid with eligibility determined by account loss history. While we do not yet have year-end results and final determination of the dividend, the Board Resolution is the first step in the process of a Dividend Declaration for early 2015.

2014 MTMIC Annual Members meeting:

Location: St. John’s, Plymouth

Surveys were given to each attendee. The comment on the meeting location – all checked “Excellent”. Hand written comments added “St. John’s is Awesome”, “Very Nice, and “Keep the same location”. Food also had unanimous “Excellent” grading.

Our guest speakers were: Keith Castora, Workers Compensation Claims Magistrate and John Harris, President of Shadow Investigations. Both were informative. John had interesting investigations stories that were enjoyed by all. For full disclosure, a couple surveys commented that the audio system needed to be turned up for the Magistrate as he was soft spoken and hard to hear. We will have a more rapid response to the speaker system next year.

General comments about the meeting:

“The meeting location was beautiful. I enjoyed my first time at the annual members meeting.”

“I was happy I attended and wish I had come in the years past. It (the meeting) moved quickly and was time well spent. Also I enjoyed the networking opportunities with other members, including Board Members.”

“This was my first time attending the Annual Meeting and it was a very positive experience! The site, food spectacular and the hospitality was excellent. Looking forward to 2015.” The plans have already begun for next year as we have already reserved our meeting rooms at St. John’s. When it gets closer to the meeting date, we will give you specific information and hope you will put this on your list of things to do.

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It’s hard to believe summer is over and with that the MTMIC staff started the annual task of preparing for January 1 policy renewals. Nearly half of all MTMIC policy holders renew on January 1. I should mention that before we start the individual account review, some significant big issues are taken care of. The first is regarding an overall company rate change: great news is that since February 1, 2013 we have not had a rate increase. Secondly all employer experience modifications have been ordered from the state rating agency. When our policyholders talk about workflow peaks and valleys, we fully understand the challenges. For each renewal, we contact you or your broker for the 2015 estimated payrolls, we review current Loss Control reports, study loss history and contact you with any questions we might have. The end goal of this whole process is to make sure we properly renew your account and use all the available discounts you are entitled too. Thanks for your help in this process.

On another item, the MTMIC annual members meeting is going to occur on Thursday, October 16th. This year the meeting is being held at the Inn at St. John’s in Plymouth. The meeting begins at 11:30, wraps up by 1:30 and includes lunch. We promise to use your valuable time efficiently. Our guest speakers for this year are Workers’ Compensation Magistrate Keith Castora who will present an “Update on the Workers’ Compensation Mediation Process”. John Harris from Shadow Investigations, Inc is our second speaker and will discuss “Social Media Impact on Workers’ Compensation Investigations”. We think you will find their presentations interesting and helpful. We hope you will join us as all MTMIC staff will be in attendance.

Please mark your calendars for our upcoming Annual Meeting on October 16, 2014. This year the meeting will be at:

The Inn at St. John’s ~ Nazareth Room
44045 Five Mile Road
Plymouth, MI

Invitations will be going out in the next couple of weeks. Please contact us in the meantime if you have any questions.

It is no surprise that MTMIC Board Members have a depth of experience in product production, especially due to our company name. All ten of our Board members own, have built, manage or are senior officers of Michigan manufacturing facilities. The 38 year history of the company is based on small, medium and large Michigan manufacturers. With this type of Board member, our sole goal is to support Michigan manufacturers with the lowest cost workers’ compensation coverage consistent with financial stability to pay future claims.

In the last few months I have asked Board Members for a profile. As successful as these 10 men and women are, they don’t care much about talking about themselves. But after enduring a little push back, the management team “won” recently when we profiled our newest Board Member, Karen Schluckebier from The Rogers Group in Clare.

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Some good news – MTMIC’s last general rate increase was January 1, 2011 and with current loss trends we don’t see a need for one in the future (sorry my crystal ball has a forward looking limit of only one year).

Let me tell you more about our/your loss trends. Of course you would expect that we keep data by type of loss, classification of loss, by month, and year since we converted to MTMIC January 1, 2007 from the MTA Self- Insured Fund. That gives us over 7 ½ years of experience to rely upon. This data is used to direct Loss Control efforts, build claims research files, study underwriting issues as well as in financial/rate making tasks.

Here’s some loss frequency numbers from 1/1 – 7/31:

Medical Only:
2014 – 805
2013 – 969
2012 – 847

Time Loss:
2014 – 114
2013 – 120
2012 – 116

What makes these numbers more impressive than just the raw data, is that we grew (exposure base) in 2013 and 2014. Growth in 2013 was 13.12% larger than 2012 and our estimate of growth in 2014 vs 2013 is 5.88%. The offset to this great news of reducing claims frequency is that the claims that do happen are costing more. There continues to be an upward trend on medical care costs and time loss.

We hope you find the monthly articles from the Loss Control and Claims Departments useful and hope the safety video library on our company website is beneficial to your organization. By the way, our 750 policyholders viewed our library of safety videos 3,235 times in the last year. I would like to thank our Loss Control Consultants in this effort and want you to know that our Claims people vigorously review every claim for compensability and then if compensable, every claim dollar is watched like it was their own.

Thank you for your Loss Control efforts, which are noticed and do effect rates. Now back to work, with safety goggles on, hearing protection, safety shoes, machine guards, proper lifting techniques …

As a MTMIC policyholder and mutual company member, it is important I give you management updates on the company similar to my reports to the MTMIC Board of Directors. Our mid-year review is a perfect time for a MTMIC 2014 update business plan goals such as sales, loss control visits, claims activity, underwriting service and company investment status. All of these are important service standards for MTMIC policyholders.

When reviewing with the Board I use a “Green Light”, “Yellow Light” and “Red Light” approach. “Green Lights” signifying that we are on target with our goals and barring some significant change, we will meet these business goals. “Yellow Lights” informing the Board that the goal is in jeopardy and that management is refocusing and moving resources to achieve these goals. “Red Light” meaning the goal for some business reason is no longer valid or costs of the goal have exceeded the budget and the goal needs reassessment.

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While I normally provide our newsletter with current issues in Michigan Workers’ Compensation, this month is different. I am asked regularly about MTMIC ownership and governance. These are great questions for a small, specialty driven workers’ compensation carrier like MTMIC. For our first 30 years of operation, we operated as a Self-Insured Fund. Since January 1, 2007, we have been licensed as a member owned mutual insurance company. Everything we do is based on what is in the best interest for our member owners and we have no outside investors that direct our pricing decisions or we pay fees to. I report to the 10 member Board of Directors, many of them have a long history with the company. The ten Board members include:

6 – Business Owners
2 – Chief Financial Officers
1 – Human Resource Vice President
1 – Retired Business Owner

Their firms cover the range of 10 to 400 employees. Some have business in other states and a couple have business in other countries. Needless to say, my “bosses” have a wide and vast range of skills and experiences. My focus and the company course is set by the Board. In the next few newsletters you will see profiles of these important people as they are an integral part of the MTMIC success story.

In fact this is a time to give you an early invitation of the Members’ Annual Meeting which is Thursday, October 16th. This year the meeting is at The Inn at St. Johns in Plymouth and lunch begins at 11:30. MTM Board members and the entire staff attend the meeting. Feedback from members who have attended previous meetings is that it was time well spent. In the next couple months, I will have more meeting details.

It is June; and impossible to believe that nearly half of 2014 is gone. You might remember me, I am Gary Wood; I was the COO of the MTMIC and the Administrator of the MTA Workers’ Compensation Fund from 1998 to 2013. Last year I made the decision to step back when I recognized two things; 66 is more than a number and after 15 years there needed to be a new stimulus for growth.

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Early in 2014, MTMIC obtained its first independent rating organization evaluation. The rating agency is Demotech, Inc. of Dublin, Ohio and has nearly 30 years of insurance industry rating experience with a proven track record. Their review included analysis of MTMIC financials, investments, claims history, actuarial reports, reinsurance and staff experience. On April 22nd, Demotech, Inc. distributed an industry press release summarizing their review with an announcement that MTMIC was assigned an “A” (Exceptional) 2014 Financial Stability Rating

We, the MTMIC staff, are proud of our Demotech, Inc. rating in that it confirms what we know about the strength of MTMIC.

…that you can now receive an email from us notifying you when a claim is received in our office and when that claim is closed? In order to receive the email alerts from us, please log in to the Client Portal at www.mtmic.com/blog. Select the Contacts tab and enter the email address of the individuals that would like to get the email alerts. For additional information, contact Patty Allen at patricia. allen@mtmic.com/blog.

By Glenda Moyle, Premium Accounting Manager

MTMIC is updating our Officer Exclusion procedure. Effective immediately, renewal policyholders will NOT have to fill out a new Officer Exclusion form. We will automatically renew the officer exclusions unless we hear different from the company or the company’s agent. Polices for new companies will still require the Officer Exclusion form. We hope you find that the elimination of the Officer Exclusion form on renewals will improve efficiency and effectiveness of the renewal process.

Just as a reminder, it is very important that you double-check your documents from us and let us know of any corrections that need to be made.

This month I will deviate from my normal Workers’ Compensation issues and use my column to welcome a new MTMIC Board Member, Karen Schluckebier. Karen became a Board Member in March and attended her first MTMIC Board meeting April 17th. The Board Members and the management team are delighted that Karen joined our Board. She brings some skill sets that are valuable to the Board and helpful to the management team. The following is a short bio on Karen:

Karen has worked for the Rogers Group in Clare, Michigan since 1999. The Rogers Group is a multi-company group including StageRight, Filcon, Rogers Athletic, World Sporting Good, and Tranquil Systems International. She currently holds the senior manager position as Director of Human Resources with human resource responsibilities for all Roger Group companies. Karen has played a key role with acquisitions and other risks to the company. Karen has worked in the area of human resources including training & development since 1985. (more…)

Adverse Pricing Changes

A couple times a month our policyholders call me and ask me about adverse pricing. Their question is, “How did it happen to me, and what are the causes”? While this is not a frequent question, I have to say it is one where the customer is the most concerned and anxious for answers.

My answer to this question first starts with a review of company payroll/growth. Sometimes it is a simple review – the payroll for your company has gone up by 50%. There is no rate increase; your premium increased because your company and its payroll is growing. If there is no increase in payroll or the increase is minor, then we move to the two primary causes of adverse pricing/rate changes. Within these two causes, there can be an impact at your next policy renewal as well as an impact a year or two later.

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Our 2013 financial results have been finalized with our actuary. The good news is that through loss control efforts and claims handling by our policyholders, MTMIC made a small underwriting profit for the year. A small underwriting profit is in line with a primary company goal of keeping our customer’s rates as low as possible. Additionally with some conservative investment of company funds, we added to that bottom line. Sometimes I am asked where do our mutual profits go? There are only two places: 1) a company surplus account and 2) policyholder dividends. Given the size of the profit, we have put the money in the company surplus account. This account provides a buffer if we have a year where the results do not generate a profit – that is, losses exceed our collected premium for the year.

In the workers’ compensation insurance business good results just don’t happen. It takes a wide range of people involved. It takes mutual policyholders who worry about loss control and their individual company claims experience. It takes professional insurance staff providing loss control support services to our policyholders. By the way, at MTMIC, we have one full time field loss control consultant for every 240 policyholders. This is a commitment and focus that no other Michigan insurer can match. Beside the focus of the staff, we provide safety training videos, training documents, ergonomic tools and written safety programs in the tool box to help our policyholders.

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By Glenda Moyle, Premium Accounting Manager

Wow, can you believe another year has gone by. And what that means is its final audit time again for our January renewals. When we issued your policy, you gave us estimated payrolls by class codes on which we were to base your premium. The final audit will give us actual payrolls, by class codes, to see if you owe us more premium or we owe you a refund of premium. About half of our policyholde

rs will be going through their final audit in the next couple of weeks. If you haven’t already been contacted by our audit company, The Aprise Group, you will be shortly.

Your renewal packet consisted of all of your renewal documents as well as a sheet titled, “Guidelines for Your Premium Audit.” Please use that document as well as the information in the list of inclusions and exclusions on the back side of the newsletter when preparing for your upcoming audit.

For over 30 years I have been helping you with this process and I continue to be ready to answer your questions.

Patty Allen Sales & Marketing Assistant

As with our renewal process, many departments work together to get the Labor Law Posters prepared for delivery to our 725 policyholders. We provide these posters as a courtesy to all of our insured’s.
The Marketing department begins working on the process approximately six months in advance of the mid-January mailing. Our Loss Control team researches the labor laws to make sure that we have the most current information at the Federal and Michigan level. We then work with our printer to produce a poster in the correct size and font. Once the posters are printed and mailing tubes ordered; the posters are rolled and stuffed into the tubes with the mailing labels affixed to the outside. Additional care is taken so that you don’t receive an empty tube with no posters. We then complete the mailing by affixing the proper postage based on zip code and arrange for a special pick-up by the USPS.

By the time you are reading this article, your company should have received the updated 2014 State and Federal Labor Law posters.

We thank you for your continued business and if you need additional posters, please contact me at patricia.allen@ mtmic.com/blog.

With the holidays and the January 1 renewal rush going on, I passed over a couple important staff changes at MTMIC. The good news is that these are changes with people you know and have worked with for years.

First Megan Brown, our Director of Sales & Marketing for the last 6 ½ years was promoted to Vice President of Sales & Marketing. Megan is the field presence and face of MTMIC. Our growth is the net result of Megan’s efficient and effective work. Prior to joining MTMIC Megan spent 15 years as a marketing manager and director in the field of occupational health. Megan obtained her Bachelor’s degree from Michigan State University. She has been active in a variety of associations. Her family including her husband, daughter and son are avid runners competing regularly in half and full marathons.

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Well, at this writing in the middle of December, I’m about fifteen feet from where I used to sit, sort of in a closet/ utility room.

My acquaintances know I have on occasion taken the liberty to comment on life in general; I have enjoyed that aspect of the position over the years and regret that I’ll lose this public forum which permitted my indulgences. Having acknowledged my weaknesses, I’ll try to avoid making bad puns or any other random acts of impropriety as I leave the job I have enjoyed for fifteen years. It may be difficult because after fifteen years you do get an extensive notepad of things better left unsaid.

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Hope you had a wonderful holiday season. For the staff of MTMIC, it went by quickly. With over half of our policyholders renewing on January 1 it has been a busy office time.

File reviews, gathering data, reviewing losses, loss control reports and getting shop operation updates from our policyholders takes time. While it is still too early to give you the “numbers” for January 1, our early indication is that we have renewed about 98% of our policyholders. We will share the final numbers with you next month. A couple industry trends are apparent. Most of your shops are busier now than last year. Not everyone, the results are “lumpy”, yet in aggregate, payrolls look to be up about 8%. Another interesting finding is that many of our policyholders have added a new product line and/or new significant customer. I was surprised how much your shops have changed and adjusted to new products and/or customers. Our policyholders ARE creative and pushers. Not much of this helps you in workers compensation, but the market intelligence is interesting. Maybe one piece of MTMIC trivia. How much payroll do our policyholders anticipate in 2014? A big number – over $1,100,000,000.

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