A bill that would privatize MEM passed the Missouri Legislature on May 9, 2023. See link to SB 101 here.
Businesses grow and we want to grow with them. As market and workforce footprints expand outside of our state, we want to have the capacity to serve them. Privatization will allow MEM to write more policies, provide better service to businesses and drive down rates, ultimately helping our communities and region grow.
MEM was created in 1995 to improve the workers’ compensation insurance market. We opened our doors with a $5 million loan from the state of Missouri. With our broad risk appetite and safety services, we brought stability to the market and repaid our $5 million startup loan with interest to the State of Missouri in 1999.
Read more about our history here.
Why privatization?
The crisis MEM was created to solve is long gone. The Missouri market is healthy, stable and competitive and no longer needs a state fund. The competition is fierce. Multi-line national carriers are meeting customer needs at scale and have the capital to continue to innovate.
Meanwhile, low investment returns further increase MEM’s dependence on underwriting profit from just one line of insurance in one state. Diversification is crucial to create new revenue streams and fulfill customers’ demand for flexible, easy insurance solutions.
We’ve seen this model work across the country. When companies like ours privatize, rates go down – empowering businesses and growing our economy. When rates are lower, the cost of doing business is lower, ultimately helping our communities thrive.
What does this mean for Missouri?
MEM will continue to be a valuable contributor to the state’s workforce and economic development efforts. As caring continues to be one of our core values, our commitment to community will not waver. In fact, we believe that privatization will allow us to be even more engaged in our corporate impact program as our business grows.
MEM will now be subject to federal taxes, but the net benefits should more than offset that tax. MEM pays all state taxes like all other Missouri companies and receives no state appropriations. As the largest writer of workers’ compensation, we pay the most worker compensation premium tax of any carrier. MEM will also continue to be a member of the Missouri Property and Casualty Insurance Guaranty Association like it is today.
What does this mean for policyholders?
If privatized, MEM will remain a mutual insurance company, owned by policyholders. Privatization will allow MEM to serve our mutual owners, our policyholders, better by allowing us to insure more businesses and drive down rates.
For agents and policyholders:
If you have questions about privatization and what it might mean for your business, please email privatization@mem-ins.com.
For media:
For all media inquiries, please contact Revee White, Director of Marketing and Communications at rwhite1@mem-ins.com or 573.499.4190.