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These are scans of some of the 1990s MSI Annual Reports. The decade would end with MSI partway into its death spiral.
Jim van Houten's first full year at MSI, and it was a decent one. He does define the three strategic business segments:
These segments are: 1)providing insurance and risk management services for cooperatives and other agribusiness firms, 2) meeting the personal insurance needs of individuals and families in two specific areas - one on the West Coast and the other in four states in the Upper Midwest, and 3) providing low cost defined contribution retirement plans for small- and medium-sized employers.
No mention yet of the
fronting Reinsured Programs that would be part of MSI's ensuing troubles. We saved some money:
We took a hard look at overhead expenses and fixed costs and reduced the home office staff by nearly 10 percent. Some units were restructured to remove a complete layer of management.
Modern Service had been doing ok and paid a dividend out to its owners:
Because of Modern's strong financial condition, the Board of Directors authorized the payment of $4.0 million dividend to be shared by Mutual Service Casualty and Mutual Service Life to take advantage of income tax opportunities and to reduce the percentage of each company's assets invested in affiliates.
That was nice, but Modern did end up overdrawn by $56,834 at year-end. Oops! Funny thing about these financials, every report (so far) shows current and prior year results. In 1990, a lot of the 1989 amounts got reclassified, then in 1991, a lot of the 1990 figures got reclassified again. If you look at Modern's cash in 1990's balance sheet, it's $(56,834). If you look at 1990 in the 1991 report, it shows Modern's cash as zero and unless you pay a lot of attention you won't notice that the Liabilities went up by $56,834. As I've been scanning these annuals, I've been compiling an Excel sheet with all the financials as well, and a cursory look at 1990 will differ from the 1990 Annual Report because I changed it to the 1991 presentation. It strikes me (as sort of a CPA) as weird that there's this much change year to year. One thing you do notice when you enter 50 years of financials is changes in terminology and the nature of the transactions, but 1990 seems pretty recent to have such volatile results. I have to wonder what the discussions were underlying this.
In other news, the report reveals that:
- Commercial agribusiness property/casualty premium reached record highs.
- The MSI Insurance Foundation granted $196,000 to community and cooperative organizations, including $70,000 to promote and expand the cooperative form of business.
- Contributed $128,000 through United Way gifts.
- had conscientious participation in a new corporate recyling program.
Is that how old those "I Recycle" cardboard boxes were? The report has features on Commercial Loss Prevention, Pension Solutions' products and Rice Lake, WI agent Al Haus.
A good year for the companies, rebuilding capital. Not that combined ratios were great; it was still 106.9 but that was better than industry average. All three companies added to surplus. The disastrous TPA medical stuff was behind us but was still referred to obliquely:
In 1991, these three primary businesses (personal insurance, commercial ag insurance, pension for ag & other customers) produced 94 percent of our premium, a significant increase from the 70 percent of just three years ago.
There were some difficult developments during the year, including an assessment for more than $1.0 million [weirdly specific, it didn't make it to $1.1 million? Why not just say $1 million?] from the states of Minnesota, Wisconsin and Indiana to enrsure that the policyholders of some failed companies received their promised benefits. Also, MSI had it's biggest catastrophe event ever:
Mutual Service Casualty Insurance Company had its sixth straight year of excellent earnings. This performance was accomplished despite a $2.1 million catastrophe loss due to the Oakland, California fire.
Elsewhere in the report is a picture of a smoke-scarred chimney standing amid ruins and the note that it was the largest catastrophe in MSI's history.
The company's Five-Year Strategic Marketing Plan say the first year of its implementation in 1982. Part of this effort was a television commercial campaign aimed at increasing public awareness of MSI and its service-minded agents. The commercials depicted unusual, but real-life, stories in wich agents happened to be at the scene of their clients' accidents and began processing claims immediately. The commercials end with: "Having an accident in front of your insurance agent is unusual, but the service isn't."
The frontiers of data processing continue to move forward & MSI prepares for PMS:
In the Life Company, the new Claims Administration and Payments System (CAPS) brought essential information to the fingertips of claims personnel. The Policy Management System (PMS) was initiated in 1982 for 1983 installation.
And new products were introduced:
They included million-dollar individual major medical coverage and a new homeowner's endorsement that addresses the needs of those with homes valued at over $75,000.
Elsewhere in the annual are stories about individual agents and employees, a story about MSI supporting cable tv installation in Trempeleau County, Wisconsin, and an interview with Jerome Sychowski, Vice President of Data Processing. He still sees MSI's efforts as giving a competitive advantage rather than just being a necessary ante to stay in the game. Towards the back is a listing of lines of business, including Major Medical and Group Health insurance.
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