Business Spotlight: Missouri Employers Mutual Insurance Co.

Owner: MEM policyholders

Founded: 1995

Address: 909 E. Republic Road, Bldg. C-100, Springfield, MO 65807

Phone: (417) 882-6633

Fax: (417) 442-0598

Web: www.mem-ins.com

E-mail: custsrv@mem-ins.com

Products/Services: Workers’ compensation insurance provider

2007 Revenue: $144.3 million

Employees: 20 in Springfield; 250 companywide

Missouri Employers Mutual Insurance Co. officials describe their jobs as “taking care of folks.” But that’s not just a slogan.

“It’s a principle of work, a fundamental part of who we really are,” says Heather Baer, marketing and communications editor at the Columbia headquarters. “It’s what we do every day.”

It’s also one of the reasons the statewide insurer was awarded the St. Louis Business Journal’s Laclede Award in 2000 for “putting a human face on the sometimes cold calculus of employee benefits management.”

At the same time Missouri Employers Mutual is taking care of folks, the company is taking care of business. For the last several years, A.M. Best Co., cited by The New York Times as “the oldest, most authoritative insurance rating source in the U.S.,” scored MEM as an A- (Excellent). That rating was assigned because of “excellent capitalization, good operating profitability and strong market profile.”

The single-line carrier that only writes policies in Missouri produced $144 million in 2007 revenues and $16 million in net income in 2006, resulting in policyholders’ equity of $113 million.

That’s not bad for a company that only offers one product: workers’ compensation insurance.

“Everyone in the company focuses on workers’ compensation,” Baer adds. “That’s all we do.”

MEM operates offices in Columbia, St. Louis, Kansas City and Springfield, where it relocated its 20 local employees in October to the Twin Oaks Office Park, 909 E. Republic Road.

With 14 percent of the workers’ comp market in Missouri in 2007, MEM is the largest provider of workers’ comp insurance in the state, followed by New York-based American Home Assurance Co. at 7 percent, according to a Missouri Department of Insurance market share report.

MEM reports slightly more than 15,000 policyholders – from mom-and-pop businesses to multimillion dollar corporations – down from 17,000 a couple of years ago, which Baer says indicates a soft market. She notes that more insurance companies are adding workers’ comp lines.

“It’s more competition for us, but that’s business,” Baer says. “We’re doing everything we can to stay competitive and still give our policyholders the level of service they’re used to.”

According to the Department of Insurance report, MEM’s 2007 loss ratio was 42 percent, the second-best rate of the Top 10 Missouri market share companies. The report also showed that MEM’s premiums dropped 1.66 percent last year.

Coverage kicks in

Workers’ comp insurance provides funds to pay medical expenses when an employee is injured on the job, and may even replace a paycheck that doesn’t come when an employee is unable to work due to an on-the-job injury.

Today, state law requires employers to provide their employees with workers’ comp insurance. But that wasn’t always the case.

In the early 1900s, when a mill worker broke a leg on the job, his paycheck stopped, medical bills mounted and his family was often left to depend on extended family and friends to put food on the table. Many businesses could not afford to pay such expenses for their workers, and the few who could usually were not inclined to do so. States were forced to take some action.

In 1911, Wisconsin became the first state to require companies to provide insurance to cover costs of an on-the-job injury. By 1948, every state had passed similar legislation.

With increased demand, the cost for workers’ comp insurance skyrocketed. Some businesses discovered they could join together and provide their own coverage more cost-effectively than paying premiums to a private insurer.

That’s how MEM began.

It was created in 1993 by the Missouri General Assembly through Senate Bill 251.

“The company was started with a $5 million loan from the state,” Director of Marketing and Communications Jennifer Peck explains. “That money was repaid in 1999. Today, company profits are invested back into assets, reserves and providing extra benefits to our policyholders.”

Dennis Smith, a former state senator from Springfield and 17-year veteran in the insurance industry, headed up the company when it opened in 1995. Smith remains in that position today as president and CEO, working from Columbia.

Doing all right

Although workers’ comp coverage helps give an on-the-job employee peace of mind, the best work environment is one where the coverage is rarely needed. To that end, through MEM’s WorkSAFE program, policyholders receive safety training and industry-specific seminars on ways to avoid dangerous situations.

Rich Trussel, chief financial officer of Doing Steel, a steel fabrication company on North Golden Avenue that’s been with MEM for two years, says the insurer does more than just step in when an accident happens.

“They help us out a lot with potential safety issues,” he says. “We do a lot of welding and use heavy equipment, and when we see a possible problem, we just call up Wayne Spicer, the loss prevention guy at MEM. He’s a little like a doctor on call for us. And sometimes he just stops by to see how things are going. That goes a long way for us.”

MEM reports that 80 percent of its policyholders were accident-free in 2007.

SBJ Editor Eric Olson contributed to this story.[[In-content Ad]]