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.

As we begin 2020, there are a few things to report on as we close out 2019. First let me cover the worker injury piece. In 2019 we saw a year of positive loss trends and it ended with no member worker fatalities for the year. This is only the second time in recent memory that our members have made it through the year with zero fatalities.

On serious injuries such as amputations, 2019 had two-third fewer amputations than in 2018. When looking at new claims reports as a barometer of member safety, 2019 was more than 16% lower in new claims reports than in 2018. So congratulations to you (and the MTM loss control staff) for the significant safety improvements in 2019.

While there were business changes everywhere, one area of stability our members could count on was MTM. As MTM enters its 45th year of operation, the MTM Board, management team and staff remain focused on bringing unparalleled services and value to our members. When MTM makes company profits, those profits are returned to the people that made the profit – that would be MTM members. This will be the sixth year in a row where the MTM Board has declared dividends to our MTM members.

The third leg on the MTM success stool is the MTM staff. My congrats to them on a good year. MTM ended the year with no staff departures for the year. Let me put an emphasis on that sentence in saying that there have been no MTM staff departures since a staff retirement in 2013. Staff stability is an important part of bringing services to our members. We spend no time in training the new staff members. Staff history and historical knowledge are valuable components. We do take time for continuing education and upgrade training of existing staff on new services and techniques that should be considered for our MTM members. The MTM budget clearly shows a Board and management desire to continuously upgrade staff members skill sets.

So – in summary – thank you for the great loss results of 2019. At the next Board Committee meeting and full Board meeting the member owners will be dealing with the distribution of MTM profits from 2019. As in past years, I expect the checks will be cut on March 1st and delivered during the month of March.

Best Wishes for 2020. And I will see you soon while on my dividend delivery routes. I pray for snow free roads.

Melanie English

Manager, LPT Program
Ext. 1317

Melanie’s insurance industry experience includes loss portfolio transfers, underwriting, captive/pool implementation and management. Melanie’s experience includes over 7 years working as an insurance company underwriter and 9 years in association management as an administrator. She has also worked for a manufacturing company as the Human Resources Administrator. In these jobs, Melanie worked with their Boards on strategic planning, annual meetings and budgeting. Melanie joined MTMIC in 2015 working behind the scenes on special projects and in 2016 began managing the new LPT Program. Melanie enjoys her family, friends and restoring older homes.

Djon Ljuljdjuraj

Marketing Assistant
Ext. 1316

Djon started as an intern with MTM in 2014 and is now part of the team as a Marketing Assistant. He will be graduating in 2020 with a Bachelor’s of Business Administration as a Finance Major from the University of Michigan – Dearborn. His experience with MTM has led him to be responsible for facilitating new business, as well as coordinating out of state and association policies with the Marketing Department. He also assists Finance and Accounting with payment processing, billing, recording of minutes, data security, and in-force policy management. Djon has a passion for cars, enjoys spending time with his siblings and dog Rocky.

Recently the MTM Board and staff lost one of our founders and longtime Board members. Doug Mack passed away December 8th. Doug although retired from his shop a few years ago, he was a long time shop owner, MTM member and Board member. Our longest term staff member, Glenda Moyle – 38 years, says Doug was HERE when she arrived. So his MTM history and support go back over 4 decades.

While Doug was battling cancer for a couple years, he always seemed to be winning and never missed a meeting. In October he attended the Annual Members’ meeting and Board meeting. At the meeting, he was ready to jump in for 2020 Board pictures. I was close to Doug. He was my Board contact for all Board and Board Committee nominations. For the last 6 years Doug and I worked together to complete interviews for every potential MTM Board and Board Committee member. We had many soup lunches around the state together. Doug was friendly, grounded in history and life experiences – I will miss him.

For 6th straight year – MTM Board declares members dividend – $3,500,000

By the time you get this the holidays should be winding down. I enjoyed some skiing time with my kids and like all of us with kids, they passed the parents long ago on athletic abilities. Since the kids could easily out ski me, I took break time to be the babysitter. I had several discussions with my 7 month old grandson about insurance company challenges. He did not seem to care much about Grandpa’s business issues.

Even during this fun break, MTM goals were front and center. On December 20th the MTM Board approved the Board Finance Committee’s recommendation for a $3,500,000 member dividend to be paid March 1st. While we do not yet know the exact MTM profit for 2019, if we declare a dividend BEFORE 12/31 it reduces MTM taxes. On $3,500,000, the tax savings is almost $750,000. This savings goes back directly to our members. Last year after the 2018 profit was confirmed up in January, the Board in February added $950,000 more dividend monies to the provisional declaration in December. We are hopeful to do the same thing this year.

So while Christmas has passed, like the last 5 years, a present is coming from MTM. We will be delivering member checks in March. Our delivery as usual includes pictures of members with their MTM check. As soon as I know the final dividend amount, I will let you know.

In the meantime, know that your annual MTM dividend is already in the works.

By Chris Doebler, CPA, MTM Chief Financial Officer

On December 5th, the MTM Board Finance Committee will have their year-end meeting. The Committee is made up of 6 MTM member representatives. This meeting is to put in place a couple items for 2020, the MTM 2020 Budget and most importantly an early look for available 2019 profits to be used for 2020 member dividends. To clarify timing, the Finance Committee and Board declare an MTM dividend based on an “early look” of 2019 profits. The details of the member dividend and exact amounts are confirmed at the February Committee and Board meetings. We declare a dividend amount in December to avoid paying taxes on the dividend amount. If we did not declare the dividend in December the amount of money available for member dividends would be reduced by taxes. Our declaration in December reduces (but does not eliminate) MTM taxable income for 2019. So December is a busy time in the MTM finance department. Our goal this year is the same as our prior 43 years. Bring as much value and financial rewards to MTM members as we possibly can.

Here is the MTM dividend history for the last 5 years:

• 2014 (paid March 2015) – member dividend – $2,500,000
• 2015 (paid March 2016) – member dividend – $3,500,000
• 2016 (paid March 2017) – member dividend – $3,500,000
• 2017 (paid March 2018) – member dividend – $4,000,000
• 2018 (paid March 2019) – member dividend – $4,437,920

I will have more to report after the Board Finance Committee.

Every October the MTM Annual Members’ Meeting is held. This October was no different. On Thursday, October 17th, 120 MTM members gathered at the Inn at St. John’s in Plymouth. The annual meeting starts at 11 A.M., includes an excellent lunch put on by the St. John’s staff and then 90 minutes of presentations. The goal of the meeting is to bring timely information to the members. This year’s topics were: Maintaining a Safe and Drug Free Workplace presented by Lori Schuck Barresi from Allied Safety Consultants. The second presentation was Creating a Safety and Security Plan for your Business by Darcy Leutzinger and Lindsay Gietzen from Premier Safety Group. Lots of questions from members about drug policy and situations were received. And the Safety and Security issues of the day kept the members’ attention.

The program also included a 5 minute update on MTM financials and outlook for member dividends payable in March, 2020. So far, so good was the message on 2019 loss results. One other congratulatory honor was announced, Karen Schluckebier, Director of Human Resources for StageRight is retiring and looking forward to spending much more time in Florida. She has been a valuable MTM Board member for 5 ½ years. We are sad to see her leave. Of course no meeting is complete without door prizes. Here’s the list of prizes given to attendees:

• Airline tickets w/ suitcase
• iPad
• Gift Card Tree
• Inn at St. John’s stay with breakfast
• $100 Gift Card
• Amethyst Bracelets
• $100 Gift Card for early registration
• And 13 attendees won $25 Gift Cards

As tradition has it the meeting closes with a music video and picture montage of pictures from the past year. Many from the MTM dividend deliveries from March and April 2019.

Staff celebrates the success of the Annual Members’ Meeting for a day or two, then we critique – what could we improve and the planning starts for next year. So mark your calendars. October 15th, 11 A.M. at the Inn at St. John’s, Plymouth will be the time and location of next year’s meeting. Hope you can attend.

October 17th, 2019 | Inn at St. Johns, Plymouth, Michigan

For a change of pace, let me share an MTM project with you that I have been working on. And I will warn you that it includes some insurance geek. You buy insurance to provide financial reimbursement in case of loss. You do this to protect your building, your cars, your health, your life and in the case of MTM – your workers for workplace accidents. All of us do not want large financial surprises if one of these loss events occurs. Like us, insurance companies buy insurance too. When an insurance company buys insurance it is called reinsurance. While insurance companies retain financial reserves to pay losses, what happens if we had a plant explosion with 20 or 50 employees injured? What if an MTM member had a building fire that injured a group of employees? Or a car accident with 5 employees seriously hurt? You get the picture. While this type of loss probability is low, it can (and will) happen. It is prudent for MTM to have protection for these possible shock losses.

At MTM we buy reinsurance for catastrophic events. Your MTM pool has plenty of financial reserves to cover losses. This is proven by our financial reserve evaluations by the Michigan State Insurance Department, independent outside actuaries, the MTM Board made up of members and verified by an outside insurance rating agency, Demotech which rates MTM financial stability as A’ – Unsurpassed. Still, we would not want MTM’s financial condition (or our member dividend program) hurt by a shock event. We would never want our Member dividend program harmed because of a low probably, but significant single loss event. Conservative management of your company requires us to buy this type of insurance protection.

So with that background, now is the time of year to search, evaluate and purchase MTM reinsurance effective 1/1/2020. Over the last two weeks I have met with 9 companies to get competitive bids for MTM reinsurance. Due to the expense of this coverage and effect on MTM’s members, several MTM officers are involved. They include VP of Sales, Megan Brown, Chris Doebler, CFO, Glenda Moyle, Premium Accounting Manager, Donna Motley, VP of Claims and Ruth Kiefer, VP of Loss Control. Showing the quality of MTM management brings the price down for this reinsurance coverage.

Reinsurance cost is one of our highest expense items after claims payments. And like you with suppliers, I have to negotiate hard with present vendors and look for new vendors to reduce expenses. It’s part of our job. For me, saving money on reinsurance goes straight to the bottom line and into the MTM member dividend program.

Now you know about insurance company insurance, reinsurance.

Until next month, enjoy the beautiful fall weather.

Normally in the summer MTM has a slight slowdown from the rest of the year. Here’s the high level annual MTM plan: In January we are wrapping up details/printing documents for our members largest renewal month. February we are working hard to finalize 12/31 numbers and the required actuarial work to present to Board Committees and the full MTM Board. These meetings are where the important member dividends are discussed. Then in March and April we prepare and deliver member checks. In May once again we have Board Marketing/Underwriting Committee, Board Finance Committee and full Board meetings. It’s busy. June we are prepared for another busy member renewal month – July. In July and August staff will take vacation and we get ready for the normal year-end sprint. September is when we plan reinsurance (insurance for possible large MTM member losses) meetings, our annual member meeting in October and send out individually tracked ballots for the annual Board member vote. October is a month when all Board committees meet as well as the full Board and the Annual Members Meeting. Finally in November and December we are preparing all the studies and documents for January renewals. Each renewal push involves Claims staff, Loss Control, Accounting, Underwriting and Marketing staff.

That’s the year in summary. But this summer has been different. Several projects took over July and August. Let me cover them for you.

Beta testing of a new out-of-state coverage option for our members. Beta test #1 in January found several flaws. Much was learned. Beta test #2 went/is going well. We plan a full rollout for January 1, 2020.

Loss Control 3 Day MIOSHA 10+ Hour General Industry class for our members as well as individual Stop the Bleed trainings and kits.

Reinsurance program revamping (seeing if we can save MTM insurance cost – which goes back to our members).

Office buildout going on this summer, moving in September. We got more space and saved money too.

Loss Portfolio marketing and out-of-state option. Still deep in this project, but on target.

When you tell me how busy your shop is, I now have more empathy. It is a busy time for all of us. Hope you are getting some time to enjoy the last of our summer days.

If you are a January 1st renewal, please be on the lookout for your payroll renewal form. Payroll renewal forms have been sent out to all insureds that have an effective date of January 1st 2020. We are asking for your estimated annual payroll for 2020 which assists in reducing that chance for additional audit money due at the end of your policy. Please complete the form and return it to Glenda or an additional copy can be requested by emailing glenda.moyle@mtmic.com/blog.

As of September 30, 2019 our new address is:

39500 High Pointe Blvd. Suite 260
Novi, MI 48375

Please continue to mail all correspondence to:

P.O. Box 9150
Farmington Hills, MI 48333-9150
Phone: 800-274-5606
Fax: 248-488-1980

On Thursday, October 17, 2019

AGENDA:

• Welcome & Introductions: Megan Brown, ARM, CWCP, CAWC, Vice President of Sales & Marketing
• Company Overview: A Year in Review: John R. Karlen, CPCU, APA, ARe, President
• MTMIC Dividend History: An Early Look at 2019: Chris Doebler, CPA, Chief Financial Officer
• Maintaining a Safe and Drug Free Workplace: Lori Schuck Barresi, Allied Safety Consultants
• Creating a Safety and Security Plan for Your Business: Darcy Leutzinger and Lindsay Gietzen, Premier Safety Group

Well, after having no spring, summer has finally arrived and it’s in full force. Hot, humid, mosquitos – the summer we all know in Michigan. With July here, the first six months of 2019 of MTM loss results are now in the books. During my recent visits to MTM members, the most common question is how does it look for our next dividend. Here’s my answer on that subject with the caveats: 1) things can change good or bad. 2) we still have half of the year to complete. With that said, the first six months of 2019 were good. The results if this was the whole year would be a nice member’s dividend to distribute. 2019 losses are lower than expected both in frequency and severity. As an example on the severity side, last year, in 2018 we experienced two fatalities. So far in 2019 (knock very hard on wood) we are at zero. On this one metric, over the last six years: 3 of the years we have had one fatality per year, two years at 0, and then last year, at 2. Even with “regular” claims, frequency this year is looking good. Congratulations to our members for their Loss Control efforts and a special shout-out to the MTM Loss Control team.

My goal/hope is that the second half of 2019 is as good as the first half of 2019. This would make delivery of member dividend checks early in 2020 a lot of fun. This would be the sixth year in a row of owner dividends.

Lastly, every October we have the annual MTM members’ meeting and lunch. As in past years this lunch is held in the delightful location/facility of The Inn at St. John’s, Plymouth, Michigan. The date has been set for October 17th. A “Save the Date” notice was recently mailed out. Last year’s presenter was “active shooters”. This was a very interesting presentation and our members gave it high marks. This year the topic is “MTM is providing tools to a safe, secure, and drug-free workplace”. MTM’s own Megan Brown, Vice-President of Marketing and Sales does a great job finding outstanding speakers on hot topics. I hope you can join MTM staff and another 100 MTM members.

Until next month, enjoy the summer. — John