Legislation that Can’t be Ignored

For the last ten years I have avoided jumping into the legislative process. Like most of our shop leaders, I view my job is to work hard and get the best results possible in the environment that surrounds us. When legislation would change matters, my job would be to adjust and figure out how to succeed and represent our members with the best results possible. I think that’s probably what most of our shop managers do. However, things change and all of a sudden it appears that we have no choice but to be more involved.

As I look at the legislative changes for our shops in just the last eight months, there have been dramatic shifts in policy that effects our businesses. As many of you are aware, we have been active partners with the Michigan Manufacturers Association. They have a strong legislative arm. MTM is also a member of the Insurance Alliance of Michigan (IAM). That is a group of insurance companies that also has a legislative presence. For the most part MTM and myself individually have attended but not been active in those legislative efforts. With the introduction of House Bill 4390, it is obvious to me that we must be more involved and encourage our members to be involved also.

First Six Months of 2023

June 30 – a good time to review our results and see if we are on target or if we need to make adjustments to reach the company goals. An important part of that review is a study of claims losses. Insurance claims are the primary driver of financial results. No other expense category comes close to the percentage impact of claims loss payouts.

Our June 30 review looked at the first six months of 2022 and compared it with the current six months of 2023. We will want to review the differences and see if there are any trends that can be identified. In looking at the aggregate loss payments for 2023, we found those were higher than both 2022 and 2021. We pulled 2021 into the review to see if any trend lines could be identified. Interestingly, we found the claims frequency has remained virtually unchanged for 2023 compared to 2022. The frequency difference was 1%.

By Chris Demeter, Senior Loss Control Consultant

MIOSHA requires companies to train on any hazards their workers may encounter. Knowing, understanding, and interpreting MIOSHA rules and regulations can sometimes be confusing. This is why our Loss Control team is here to assist you through the process. Help is only a phone call or an email away and will be answered by one of our Loss Control Consultants. This support is an integral part of MTMIC’s service because we know that safety and health questions are inevitable.

f you are not the person that handles the safety walkthroughs with your Loss Control Consultant, let me introduce you to our Loss Control Team.

On the Road Again

Every time I think about a busy time at MTM, I remember many of my recent visits to our MTM shops. Our members are undergoing massive changes all the time. There are shortages of raw materials. There are shortages of personnel. The changing product line and the markets in which they serve all create a tech environment where every minute of the day is filled with important decisions. That always helps me keep a perspective for the busy times that MTM has. February is one of those extraordinarily busy times.

In actuality it starts the last couple days of January when Chris Doebler, MTM CFO, and Megan Brown, VP of Sales and Marketing and I meet with our actuarial team to discuss year-end results and loss reserves. It is a lively discussion/debate where we take many unknowns of future medical costs, future court decisions, and try to apply that to the over 500 open claims that we are presently working on. Once an agreement is reached for that, then we start plugging those into the expense categories and revenue of 2022 for a final financial statement. All of that needs to be completed in just a few days. On February 9th we presented our findings to the MTM Board Finance Committee and MTM Board Marketing Committee. These committees are made up of MTM members.

The Decisions of February

Every time I think about a busy time at MTM, I remember many of my recent visits to our MTM shops. Our members are undergoing massive changes all the time. There are shortages of raw materials. There are shortages of personnel. The changing product line and the markets in which they serve all create a tech environment where every minute of the day is filled with important decisions. That always helps me keep a perspective for the busy times that MTM has. February is one of those extraordinarily busy times.

By Ruth Kiefer, Vice President of Loss Control

When you have a new hire, or you need to renew your employee’s industrial truck licenses have you ever wished you had a little assistance? Or a place for them to turn to have the class training? Well, I’m here to tell you, we have that assistance for you!

Year End Closing 2022

We made it through the holidays. And Michigan winter is finally upon us. So is the closing of calendar year 2022. The MTM midyear actuarial review and subsequent monthly loss reviews are encouraging for our ninth MTM annual dividend in a row. That’s the preliminary good news. This is always a stressful time for me. We have had a good year so far, we are waiting to close the year with hopefully no large shock losses, and then we work with our actuary on the final loss numbers for the year. This year the normal year end closing stress is a bit higher. Remember that we moved the annual member’s meeting from October to early March. Traditionally at the October meeting we have given a brief synopsis of how the year looked through 9 months. It was always an estimate since there were still three months to go and large surprise losses can happen. However, this year with the annual member’s meeting in March, we won’t be giving you an estimate, but we’ll actually be giving you the year end result. As I have mentioned in an earlier newsletter, if all goes to plan we will have a great speaker, a great meal, and then hand out member dividend checks. Talk about pressure—however you can help—using your loss control skills and the MTM loss control team please do all you can to close out the holiday season with minimal losses. It’s good for your workers, it’s good for you, and it’s good for your dividend calculation.

By Megan Brown, ARM, CWCP, CACW,
Vice President of Sales & Marketing

Nicole joined MTMIC as the Marketing Manager in November, 2022 bringing 10 years of insurance experience with a focus on Underwriting and working closely with agents on writing good business. She is trained in both personal and commercial lines, with an emphasis on Workers’ Compensation for the last few years. Nicole has a Master’s Degree in Business (MBA) and has obtained her Certified Authority on Workers’ Compensation (CAWC), Associate in Insurance (AINS) designations and is currently working towards her Chartered Property and Casualty Underwriter (CPCU) designation.

Nicole is very much a free spirit. She has a passion for working with people and building relationships. She grew up in a small town in Northern Michigan, right on Lake Huron so she has always had a love of being around the water. In the summer months, in her spare time, you will most likely find Nicole on a beach somewhere! She also enjoys spending time with her three kids, traveling, and working on her long bucket list with skydiving and bungee jumping as her next adventures to cross off her list!

The same dedicated staff remain in the Marketing department and I would like to share a little bit about them.

2022 Results – 9 Month Review

In the last MTM newsletter I announced that MTM management and Board decided to move the traditional annual members’ meeting from October to March. The goal was to try a different time of year in hopes of improving turnout among members. One of the draws besides great speakers and meeting other MTM shop owners would be that in March we will know final yearend results. What a nice enhancement to the members’ meeting, instead of talking about a possible members’ dividend we hand out members’ dividend checks.

By Glenda Moyle, Premium Accounting Manager

Well, we have started working on the January 2023 renewals. I have been working on these for over 35 years and it’s hard to believe that another year has sped by.

If you have an effective date in January you should have already received your payroll renewal form asking for new estimated payrolls for the 2023 policy year. The goal to accurately estimate payrolls reduces the chance of a surprise audit additional premium.

A common question I hear is what do we do if the payroll estimate form is not returned to MTMIC? Well, we use the higher of your 2021 audited payrolls or your current policy (2022 estimated) payrolls for your quote. It is never too late to send us back the form as we can always revise your payment schedule.

If you need another copy of the payroll form please contact me at Glenda.moyle@mtmic.com

Also, the 2023 renewal quote documents will be going out at the end of November so please watch your mail for them.

MTM Annual Members Meeting

For over ten years, the MTM Annual Members Meeting has been held the third Thursday of October. That’s outlined in the MTM bylaws and it’s an item that staff looks forward to putting on for our members every year. For the last five years or so we’ve held it at The Inn at St. John’s in Plymouth, Michigan. We had great reviews on the location, meeting room, and food. It’s a hard place to complain about. In May, we held the second quarter MTM Board meeting. A topic that was discussed was how can we increase the number of members that attend our annual meeting. Over the last ten years, the number of attendees bounces between 100 and 150, not taking into account the two years of cancellation or scale backs caused by COVID. We were already underway for our October 2022 meeting when this discussion took us all to a new point of how could we make the meeting better, maybe try something different.

Rating Evaluation on MTM

About eight years ago, MTM management thought that getting an outside rating agency valuation of MTM would be helpful to the Board of Directors and MTM members. At that time, management felt confident about our results and financial integrity, however, having an outside agency conduct their own independent evaluation would be a proof source of what management was telling the Board of Directors and members. We chose an outside rating agency called Demotech. Demotech had over 30 years of small and mid-size insurance company rating evaluations, and was a known standard for insurance company evaluations. We proceeded down that path and received an “A, Exceptional” rating from Demotech. About three years later, we received an upgrade from Demotech one step higher to “A Prime Unsurpassed.”

Even with our Demotech rating, occasionally questions arose because the rating agency used by large insurance companies is a company called AM Best. AM Best is actually an individual’s name, Alfred M. Best, who started insurance company ratings over 100 years ago. AM Best specializes in large companies, but because of its history it remains the world gold standard for insurance company ratings.

The Compensation Advisory Organization of Michigan (CAOM) is responsible for a number of tasks including promulgation of modification factors, collecting and analyzing policy and claims data from all insurers writing workers’ comp insurance in Michigan, and administration of the Michigan Workers Compensation Placement Facility. They are governed by a nine-member Board of Governors. The members are a combination of local, regional and national carriers writing workers’ compensation policies in Michigan, with each carrier represented by an officer of their company. In October 2019 MTMIC was appointed to fill the seat from which another carrier resigned, with our CFO Chris Doebler designated as our representative. In April 2021 MTMIC was appointed to be vice-chair of CAOM and in April 2022 MTMIC, our representative Chris Doebler took on the role of Chair of the organization. Chris will serve in that role for the next year and, at the April 2023 Board of Governors meeting, will take on the role of Past Chair, with the current vice-chair moving up to the Chair position. Congrats Chris!

My name is Faris Saleem, the new intern at MTM. I started my role this past March and, so far, it has been one of the best work experiences. The wide range of fields offered at MTM such as business, accounting, finance, and marketing will present new opportunities for learning. I’m excited to explore these fields and my role at MTM. Previously, I was employed in the technology space as a computer specialist at Best Buy. I’m more than happy to offer my technological background to assist the office in any way I can. This May, I will be graduating from Schoolcraft College with my Associate of Science degree. In the fall, I plan to pursue my bachelor’s degree in computer science at the University of Michigan in Ann Arbor. Outside of MTM and school, I enjoy traveling, washing my car, and building computers. I’m thrilled to continue working at MTM, and I look forward to meeting more of you soon.

The Gifts of March

Well, this will be an unusually short article. Why – because the montage of enclosed pictures tells the story better than I can. Hundreds of shops getting checks. I met MTM members I have called upon for 8 years. I met some long term members, some new members that I had not visited before. To speed the delivery process my thanks to agents who agreed to deliver checks, to MTM Loss Control staff who worked for 3 weeks delivering checks in-between Loss Control visits and to Megan Brown, VP of Sales who is the fastest driver of the delivery team. The goal was to get the money to MTM members in three weeks. A check gift is not nearly as attractive if delivered in 6 or 8 weeks. In a few locations, some checks were delivered by mail. Our least preferred delivery method. Most checks were delivered by a real person delivering to a real customer.

I hope you enjoy the pictures. A couple comments on pictures: Some MTM members (mostly ladies) are camera shy. Their comments: Really, I have to take a picture? Some of the pictures show the steps these ladies will go to, to avoid a picture. Notice the check covering the face one. Notice the robot holding the check vs the office manager. You get the drift.

Delivering $4,000,000 is very fun. Let’s do it again next March.

Owner Dividends Coming

Thursday morning, February 17th, the MTM Board met to review the recommendations from both the Board Marketing committee and the Board Finance committee. Those two committees do a preliminary review of financial results, and also structure the MTM member dividend program. At the end of the Marketing committee, a recommendation was made to the full Board for the parameters of this year’s dividend program. The following week, the Board Finance committee met to review the actuarial loss report, and the financial information provided by MTM management.

With the fiscal year closed, Chris Doebler our CFO has been working long hours to put the 2021 loss and financial reports for our independent actuarial team together. At the end of January, Chris and I meet with our lead actuary to review the 134-page report on the year’s loss results. Lots of detail reviewed with evaluations completed with multiple methodologies. Predicting the future value of 2021 claims that recently happened and how prior year claims are being presently handled today is as much an art as it is a science. On January 31, the actuarial team, Chris and I all agreed on the 2021 “loss numbers”. Now we quickly plug those into the financial statements for profit review.

From an overall loss review, a few findings are apparent. The 2021 year was not a get back to “normal” year that we all had hoped for back in January 2021. The COVID disruptions were different than 2020, but still a significant factor in our business and personal lives. In aggerate our members activities grew for 2020, but not back to 2018 or 2019. Maybe this slower pace contributed to a reduction in frequency of severe losses. We had no fatalities in 2021 and fewer severe losses such as amputations. That is the good news. On the bad news side, we saw an increase in losses for new employees (90 days or less). Training was an issue in nearly all these cases. We understand the pressure to produce product and get the new employees in the production process. From our accident reviews, training and supervision of the new employees is a shop challenge. While it is most challenging to take the time to train in today’s world, I can report firsthand that a serious injury is the surest way to stop all shop production. It is important to the shop’s success that we send the employee home in the same condition as they arrived in the morning.

Our Loss Control staff is focusing on that issue for our members’ benefit. My task for the next couple weeks is to work the members’ dividend through the Board Marketing, Board Finance, and then full Board meetings. Our goal is to finalize MTM members’ declaration before February 17th and then manage the print and reporting process for deliveries to begin March 1st. In the meantime, you can help our next year’s dividend by paying special attention to your newest employees.

Be safe and see you soon. – John

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.