MTM prides itself on offering some of the best service in the insurance industry. That commitment to service includes working with our policyholders to fit their premium payments to their individual needs. Recently we did an analysis of the ways policyholders make their premium payments and were rather surprised at what we found.

The most used payment method was Pay in Full, where the policyholder pays the entire year’s estimated premium up front and gets a 3% discount. Even though only 97% of the year’s premium is paid up front, 100% of the estimated premium is credited when the final audit is processed. In 2020 over 1/3rd of our policyholders took advantage of Pay in Full with savings of almost $143,000.

On Monday, March 22nd, I completed my deliveries of the 2021 dividend checks. As a refresher, the MTM Committees and Board of Directors met in February to review the profits from 2020 and then decides how to spend those profits. As has been the case for the last six years, the Committees and Board of Directors, which is made up of shop owners, shop CFO’s, and administrative managers, decide quickly to return the profits to the MTM Member Owners. That has been the consistent answer for the last six years. This year, the Board declared a dividend of $4.5 million. There was actually three parts of that dividend declaration:

1. A dividend of $1.6 million allocated to all members.
2. $2.4 million that goes to members that had a three-year loss ratio that was outstanding, i.e. they’re the ones that made the profit for the year.
3. $500,000 that is used to make sure that every member gets a minimum dividend of 10%.

For me and the MTM Management Team February is a very busy time. During the first week, we work with our outside actuary to determine profit for the year. This is done by evaluating current report losses, development of existing losses over the future, and estimating losses that we may not yet be aware of. Once the loss evaluation is completed our CFO, Chris Doebler puts together the year-end financial statements. Then on February 4th we have a meeting with the MTM Board Marketing/Underwriting Committee. This committee is made up of 8 shop owners, CFOs, and plant managers. Management presents a dividend recommendation for them to adopt or amend for 2020 results that is paid in March.

On February 11th, the MTM Board Finance Committee met to discuss the financial condition of the company based on the 2020 financial results, evaluate the MTM members dividend recommendation and determine what changes they would like to see. The Finance Committee is also made up of 8 member owners.

We often hear companies say “our people make the difference”. And that is clearly the case at MTM. The special skill sets of MTM staff are shown in Loss Control when an immediate accident analysis is conducted after a severe plant injury. It is shown when MTM claims staff is handling a plaintiff attorney on a litigated claim. It is shown every day when the MTM marketing staff is helping a member with a question and when MTM accounting staff are problem solving for members. All of these staff skills are highlighted even more when we are in a disruptive period caused by COVID. The MTM staff knows that if our members are open, MTM is open.

Not long ago, I was reporting that at my 7 year anniversary, I was still MTM’s newest hire. That says a lot about MTM staffing and stability. What the statement did not cover is that in the background we had 2 temporary staff members working on projects. They are Melanie English and Djon Ljuljdjuraj. After 5 years of temporary work, I made the leap that they have earned the badge to be an MTM employee. With some of the present MTM staff members close to possible retirement, preparing for the next generation of staff makes sense. After 5 years, we are positive that Melanie and Djon have the MTM DNA. Rather than me tell you about Melanie and Djon, please see their comments below.

At the normal October MTM member’s meeting, a couple important Board of Director items take place. First is the election of Board members. Board members serve three year terms. Those terms are staggered so that in any one year no more than four Board members are up for reelection. This year we had four members up for reelection. They were: Jerry Decker – Precision Boring Company, Teena Kowalski – Repair Clinic LLC, Bobby Cox – Acorn Stamping Company and John Moll, Gemini Group – retired. I am pleased to report that all four were reelected by ballots from members. The direction of MTM starts at the top so it was my pleasure to confirm our continued work with these highly qualified individuals. Each of them brings special skill sets to MTM. We have been successful in mixing those skills together to achieve great results for our MTM members/owners.

The second important item at the October Board meeting is election of the Board Chair. This election takes place by the current Board members every three years. Long time Board member Jack Accardo – Haller International Technologies, has been MTM’s Chairman for 2018, 2019, and 2020. During his tenure, MTM paid dividends of $12.9 million dollars. This averages 23.6% of each member’s premium. During that same time period under Jack’s leadership, the MTM surplus account increased from $28 million to $33 million. Each of these two events is significant. From my 40+ years managing insurance operations, I give an “A” grade to the MTM Chairman, Board Committee heads, Board members, and Board Committee members.

For the next three-year Board leadership term, the Board elected Joe Keppler – Shuert Industries, as the new MTM chairman effective January 1, 2021. Mark Mullen – Griggs Steel, was elected by the Board as Vice Chairman. Both of these members know MTM history and I feel confident they will continue the MTM’s success even in challenging times.

By the way – we just closed another 2020 claims month. The results through October 31st are encouraging for a seventh dividend year in a row. With that said, we still have a couple of months to get through. However, with the October results just added to the first nine months, the positive profit/member’s dividend trend looks promising. Still with two months to go, be safe.

By John J. Walsh, MMA President & CEO

Spread Hope, Not COVID

Nearly eight months have passed since our industry, our families and the world were confronted by the health and economic challenges posed by COVID-19. As state and federal officials responded to the pandemic with various actions that included an economic shut down, financial support for businesses and individuals, as well as rules and regulations affecting how we live and operate our businesses, few predicted that the various economic limitations would have lasted this long. I remember sending MMA staff home to work firmly believing that we would all be back by early summer.

Regrettably, COVID-19 remains a serious threat to our society as many states, including Michigan, are witnessing an increase in cases on a daily basis. Based on the information available to me from the Michigan Economic Recovery Council, a group of health professionals and industry leaders with which I am working closely, much of the increase can be attributed to a change in the weather forcing more individuals from outdoor activities to inside where the risk of transmission is greater, and the impact of fatigue on our fellow citizens and their willingness to comply with what seem to be everchanging rules.

The current posters that have previously been distributed to you are up to date with the current state and federal requirements. The COVID poster is required until December 31,2020 and due to the potential for that date to be extended or new poster requirements, we have decided to postpone our annual poster mailing until Spring to make sure that the posters meet all requirements. In the event that there is a new requirement, we will send the update to you.

Annual MTM Members Meeting

The Annual MTM Members’ Meeting is held each October. Normally, 150 MTM members attend this event. The last few years, we’ve enjoyed the beautiful facility/room and a great buffet of beef, seafood, and vegetarian meals at The Inn at St. John’s. If the main courses did not fill you, the variety of salads and desserts did.

We’ve always had an interesting speaker as part of the two-hour program. A couple of smaller parts of the program are Chris Doebler, the MTM CFO, and I do a five-minute update on the results of the year to date and first look at the annual member dividend. At the end of the meeting, we have a wide variety of gifts that are drawn at random and given to our members. The MTM Chairman of the Board, Jack Accardo, presides over the member gift giving.

Today, I am reading the Governor’s Executive Order #152. I have read all 152 Executive Orders and want to be as up-to-date as possible when I talk with members. I must say that the Executive Orders are overwhelming, sometimes contradictory and difficult to understand. In my 49+ years in business I have never seen the environment being so fluid and challenging. We have all matured solving business issues, and now our experience and determination is being tested.

In the last three weeks I have visited more than a dozen customers. At each of these meetings information was exchanged, data updated and even a laugh or two. I can report that I left each meeting seeing that our members are doing all they can to keep employees safe and employed, eliminate hurdles and solve problems in the face of the current business environment.

Payroll renewal forms are in the process of being prepared for the January 1, 2021 renewal. While it seems like January is far off in the future, the renewal process begins months ahead of time. Once you receive the renewal form to update your payroll and locations please complete it to the best of your ability and return it to us promptly. If you have questions on completing the form, contact Glenda Moyle at Glenda.Moyle@mtmic.com or (248) 715-0015. 

Each year, we have an election for the MTMIC Board of Directors positions. Once a Director is elected they hold a three year term to serve the policyholders of the company and with that being said, we are preparing for our upcoming election. Ballots will be sent out next month and the Directors that are up for re-election are the following:

• Bobby Cox – President of Acorn Stamping
• Gerald (Jerry) Decker – President of Precision Boring Company
• John Moll – Retired, Gemini Group
• Teena Kowalski, Director of Finance, Repair Clinic 

The last 10 weeks has been most interesting. Years ago, I was in an unusual situation of being able to have dinner with Yogi Berra and two of his sons in New Jersey. It was a couple of evenings of fascinating discussion. After the first dinner, I read up more about Yogi and many of his famous common-sense quotes. One of my favorites was, “It’s tough to make predictions, especially about the future.” It seems to apply so precisely to our last 10 weeks. Even with all the turmoil in life, the focus of MTM as always remains on what can we do to help our members. Let me cover two big items during the last 10 weeks.

We are anticipating moving forward with our 2020 Annual Members meeting on October 22, 2020 but will remain flexible as requirements change as a result of COVID-19. MTMIC is pleased to announce that John Walsh, President of the Michigan Manufacturers Association will be our featured speaker this year.

What a crazy time we live in. Everything is different. In just the last two months our personal lives, business lives, and staffing have all changed. Hard to believe that the world was normal just 60 days ago. In January, we were all dealing with “normal” business challenges. In February, the Board reviewed 2019 financials and declared a $4.5 million dividend to MTM member-owners. Dividend check deliveries began Tuesday, March 3rd and 10 days later by Governor’s Executive Order, the process was halted. Like some of you, I have been in business for over 45 years. I’ve seen many ups and downs, yet this business challenge is different.

During this shutdown, MTM is remaining fully functional and here’s what we are doing for our members:

By John Karlen, CPCU, APA, ARe, President

As MTM president, I report to the members of the MTM Board of Directors. Our Board members have a variety of skill sets. Some are MTM business owners and others are MTM member CFOs or Risk Managers. All are results-driven, which forms good benefits and returns for all 932 MTM members. The staff is reminded constantly that MTM only exists for the benefit of the MTM members. MTM has no outside investors or shareholders to worry about.

For the past 5 years, we have been delivering MTM member dividend checks most often in person to our members. This year we began hand delivering dividend checks on Tuesday, March 3rd and all seemed normal through Friday, March 13th. Nearly half of our dividends were delivered in this first 10 days.

Then due to the COVID-19 Coronavirus government orders were given to close all group venues: athletic clubs, theaters, all concerts, sporting events. On Monday, March 16th there were additional orders closing restaurants and banning gatherings where more than 50 people would be in attendance. On Friday, March 13th I had 18 deliveries. I was greeted with all smiles, many pictures, two shop tours, life was close to normal. Over the weekend rumors abounded that government orders would come Monday announcing the closure of restaurants/bars, theaters, athletic events and any event with more than 50 people in attendance. On Monday I had 11 deliveries scheduled. Still greeted by grateful members, but no handshakes, 3 office managers “can you slide the check under the door”. It was a watershed experience. New conditions were affecting everything. As I drove back from the day deliveries, I got with MTM management and office staff. We needed to change directions quickly so that money would be delivered to members as soon as possible.

A revised plan of express mailing to members was developed on Tuesday, March 17th. On Wednesday March 18th, the express envelopes were on their way. Many times, I have written that delivering member dividends is the best part of my job. This year it seems mailing is the correct answer for the present situation. We all have had to make significant adjustments to our work and life activities. This is the time where getting the MTM dividends to members quickly and efficiently is most needed. With that in mind combined with the reduction in social contact, we are mailing your MTM dividend. While most of our shops remain operating, it is more complicated and concerning. A common call we are getting from shop owners and office managers is whether or not COVID -19 is covered by Workers’ Compensation. Included in this newsletter is a very good non-legal worded article about COVID-19 and Workers’ Compensation. Our thanks to the author Chris Boggs for sharing this with our members. Stay healthy and safe. And of course, call me with any questions.

Mark your calendars now so that you are sure to join us on Thursday, October 22, 2020.

More information will be available as we get closer so watch this newsletter and your mail for complete details as they are available!!

In the past I’ve written about the Michigan State Workers’ Compensation Experience Rating Modification. This is the state’s individual promulgated employer experience for every Michigan employer. Here is a couple things I have not shared with you about the experience modification. First, the experience modification was developed by a state nonprofit group called Compensation Advisory Organization of Michigan (CAOM). This agency was set up in 1944 and is funded by a service fee on insurance companies who write workers’ compensation in the State of Michigan. Each insurance company in Michigan is required to submit to CAOM payroll and loss data for each Michigan employer so that the agency can work up the individual employer’s experience modification. CAOM issues over 80,000 experience modifications every year. While MTM shows your experience modification on your policy and then also on the end of your year-end audit, if anyone requests it, we are happy to send you a copy of your individual experience mod worksheet. That worksheet shows the last experience in payroll and claims for three years of your company history.

CAOM has a Board of Governors. This Board has representatives from the State Insurance Department and leading workers’ compensation carriers in Michigan. MTM has the good fortune to be one of those lead carriers and our own Chris Doebler, who has been responsible for the financial reporting of MTM and the former MTA Workers’ Comp Fund for over 30 years and MTM’s CFO since 2013, is the representative for MTM and its members. Having Chris on the Board gives MTM members influence and insight into the Michigan Workers’ Comp Employer Rating System. On behalf of MTM and our members, thank you, Chris, for representing us.

2020 Dividend

Consistent with the last six years, the February MTM Board Meeting was filled with good news for MTM members. Last year the Board approved $4.5 million in member dividends and the dividend this year is the same. Over the last six years the member dividends have totaled $22.5M. Also like last year, there are three major dividend components.

• A dividend was declared as a loyalty dividend in which all members participate.
• A second dividend was declared for Association members that had a three year loss ratio that beats the MTM company loss ratio.
• If a member’s dividend does not meet a minimum using 1. And 2. above, a minimum dividend applies.

These three components are used to calculate the dividend and one check is issued. Interestingly of the known 932 current members, we had 926 number of dividend checks issued. Only a handful of new members with effective dates of January 1, 2020 or after, did not get a dividend check in this cycle.

The member dividend checks are to be printed by March 1 and delivery started immediately. In fact, by the time you get this newsletter we should have already started the delivery process. As I said before, delivering member dividend checks is the best part of my job and I will be on the road beginning March 2nd. In the next newsletter we’ll have some of the member dividend pictures.

One other piece of good news. At the February Board meeting the Board also approved some increased credits and reduced rates. These will automatically apply on your next MTM policy.

Now I will get back to setting my delivery routes. And I will see you soon.