Columbia, MO — Missouri Employers Mutual will pay just more than $2 million in dividends to 11,033 policyholders this spring. The Board of Directors approved the distribution of dividends at a recent board meeting.
The Board approved the distribution plan after reviewing MEM’s 2011 audited financial results and agreeing it is financially responsible for MEM to pay a dividend now.
“As a mutual insurance company, we’re so pleased to be able to give back to our policyholders in the form of a dividend at a time when every little bit helps,” said President and CEO Jim Owen.
“It took many years of successful operation before we established the financial strength needed to pay a dividend,” he added. “It was very important to policyholders and agents for MEM to earn our A‐ (Excellent) A.M. Best financial strength rating, and it has been just as important to maintain it. We’ve regularly passed along financial success with rate reductions and pricing relief. That MEM now has the financial strength to both reduce rates for 2012 and pay a dividend is exciting.”
MEM’s first dividend recognizes policyholders with effective dates in 2009 for their safety records. Policyholders at all premium levels will receive a percentage of premium they paid based on their loss ratio results. Dividends will vary by policy size because the dividend is based on a percent of premium. Payments are going to policyholders with policies effective in 2009 because workers compensation is a “long‐tailed” line of insurance. Policies from 2009 don’t expire until 2010; claims are still reported and loss ratios are still developing in 2011.
Policyholders that are both active with MEM now and those who are no longer MEM policyholders will receive dividends, if they are due. Under MEM’s dividend model, there are only three reasons why a policyholder would be excluded from this dividend:
- The policy was effective for less than six months.
- The policy had too high a loss ratio for the premium size.
- The dividend is less than $10.