Texas Mutual Insurance Company: Everything you need to know
- Headquarters: Austin, Texas
- GWP: $959 million (2020)
- Total assets: $7.8 billion (according to 2020 annual report)
- Employees: 975 employees and 9,000+ agents
- Underwriting expertise: Worker’s compensation insurance
- Key people: CEO Richard Gergasko
Texas Mutual Insurance Company is the leading workers’ compensation insurance provider in Texas. It currently owns 40% of the workers’ comp market share in the state, helping 72,029 employers cover their 1.5 million workers every day.
As a mutual insurance company, Texas Mutual is solely owned by its policyholders. It has good financial strength, writing almost $959 million in premium in 2020, and receiving a financial strength rating of ‘A’ from A.M. Best.
A brief history of Texas Mutual
Texas Mutual was born in response to skyrocketing workers’ comp rates and poor market capacity in the late 1980s and early 1990s. The Texas Legislature created the mutual insurer in 1991. It was originally called the Texas Workers’ Compensation Insurance Fund and it was created to ensure the availability of affordable workers’ comp insurance in the state.
The Fund began underwriting workers’ comp insurance in 1992, and, within two years, it was already the state’s largest insurer of last resort for companies that struggled or were unable to find coverage elsewhere.
The insurer’s name changed to Texas Mutual Insurance Company on June 15, 2001, when governor Rick Perry signed House Bill 3458 into law. The Bill enabled Texas Mutual to operate as a domestic mutual insurance company. It also maintained statutory mandates stating Texas Mutual had to remain competitive, guarantee the availability of workers’ comp insurance, and be an insurer of last resort for hard-to-place risks.
The board of directors
Texas Mutual has a nine-member board of directors, four of whom are elected by policyholders, with the remaining five (including the chair) appointed by the governor and confirmed by the senate. The board members represent a diverse mix of Texas industries and regions. They’re responsible for setting rates and directing the company’s business, whereas the Texas Mutual senior leadership manages internal operations.
Working with agents
The vast majority of Texas Mutual’s business is placed through insurance agents. The insurer recently shared a blog explaining the 10 ways Texas Mutual has made business easier for its agents. In 2018, it has introduced:
- Zero deposit plans - available for clients who have a favorable payment history and are in good standing
- Agent self-enrollment – new personnel can enroll online
- Fast track renewals – this applies for clients with premiums of less than $5,000
- Improved internet quoting (IQ) system – the IQ has been made more user-friendly
- Other states data download – clients with out-of-state business can view all loss reports in the same format
- Other states policy documents – agents have easy access to all policy documentation
- Workers’ comp expert minute video series – this educational tool runs through all the basics of the insurance
- Agent webinars – Texas Mutual hosts webinars about timely workers’ comp topics
- Agent events – the insurer likes to meet and network with agents
- Regulatory roundup – they post a weekly compilation of industry news and safety tips
Investing in technology
Technology is the future. That statement rings true in the world of workers’ comp insurance as much as it does for the industries that workers’ comp insurers transfer risk for. Texas Mutual has invested in technology to help agents and employers better understand workplace safety,
The insurer offers an innovative virtual reality tool called Safety in a Box, which provides safety training for employers and doubles up as a sales tool for agents. Safety in a Box is a cardboard box that users slide their smartphone into before wearing the box like glasses to experience workplace hazard scenarios, such as: falling from a height, being struck by an object, trench cave in and electrocution.
“It’s the first foray in using virtual and augmented reality to lead safety training,” said Jeremiah Bentley, vice president of marketing and customer engagement at Texas Mutual. “I think there’s a lot of potential there, for us, for brokers and for the industry as a whole to help people really understand the real hazards on the job and what it could mean to them. You can tell someone all day long not to be in an unshored trench, on the edge of a building without a safety harness… but these things keep happening.”
Texas Mutual also runs an e-learning program to provide employers with courses and tests on workplace safety standards. Eric Bourquin, senior manager of safety services at Texas Mutual, commented: “We offer a lot of valuable resources to policyholders and business owners, but e-Learning is a new solution that will help employers quickly and easily elevate their safety training. Research has shown that videos are processed by the brain 60,000 times faster than text, so it’s a natural next step to offer a platform that supports this type of learning.”
Fighting insurance fraud
Texas Mutual is known for its efforts to clamp down on insurance fraud. The insurer has three specific fraud investigation teams, looking primarily at claimant fraud, healthcare fraud and premium fraud. Claimant fraud is by far the most frequent type of fraud in terms of number of incidents, but healthcare and premium fraud tend to pack a harder financial punch. Over time, the insurer’s fraud teams have become more specialized, and with the help of technology, are identifying more and more incidents every year.
“We really believe that the more we can talk about our anti-fraud efforts, the more likely it will serve as a deterrent for people who might be thinking about committing fraud. We’re proud to be open and honest about our commitment to stopping workers’ compensation fraud,” said Bentley.
“We know that customers who buy workers’ compensation insurance from us really value our fraud prevention efforts. We believe we put more resources into it than anyone else here in Texas and we’re getting some great results for our policyholders. Our openness also helps to educate the public about workers’ compensation fraud and raise awareness about the impacts fraud can have.”
Out in the community
Texas Mutual pledges to create “a stronger, safer Texas”. It invests its time and resources into four main community programs:
- Texas Mutual for Safety
- Texas Mutual for Education
- Texas Mutual for Wellness
- Texas Mutual for Volunteering
Texas Mutual for Safety – the insurer says: “our commitment to the communities we serve starts with safety”. In 2017, Texas Mutual awarded $1 million in safety grants to employers in the state, funded six safety institutes at Texas colleges, and also donated towards safety training and equipment for first responders.
Texas Mutual for Education – the firm has invested more than $250,000 into local scholarships, vocational training, and educational organizations.
Texas Mutual for Wellness – the stronger and healthier you are, the quicker you’ll recover from an injury at work. That’s the business side of the Texas Mutual for Wellness initiative. From a community perspective, this one’s all about “the quality of life for Texans.” The insurer offers a $1 million wellness grant program for employers, and also partners with the American Heart Association.
Texas Mutual for Volunteering – Employees at Texas Mutual are encouraged to volunteer in their communities.