Spring 2007

Lower Your Premium
By David Wylie

Article highlights:

• Purchasing groups offer premium discounts, industry-specific safety plans and potential dividends.
• Texas Mutual Insurance Company is a leading writer of purchasing groups.
• Employers should contact their agent or click here for more information.

Workers’ compensation is just one of many expenses employers have to consider. If you want to make it a smaller piece of your budget, keep reading.

The Texas Department of Insurance (TDI) allows employers in similar industries to purchase their workers’ comp coverage as a group. These group discount programs, also called purchasing groups, are a good deal for employers who want to improve their safety record and reduce their workers’ comp costs.

Texas Mutual Insurance Company helps each group set up a safety plan designed specifically for its industry. A loss prevention consultant works with the group to identify and correct accident trends. By controlling their losses, group members minimize the costs of workplace accidents, such as repairing or replacing damaged equipment and making up for lost production.

“Texas Mutual works with you to prevent accidents, which ultimately saves you money,” said Pete Snider, owner of Mesquite-based Alco Glass. “Texas Mutual is the only place where you can find that kind of safety and accident prevention built into the product. The fact that you’re getting it at a good price is a big bonus.”

Snider is talking about the premium discount he got for joining the National Federation of Independent Business (NFIB) Construction purchasing group.

Purchasing group members get a premium discount based on the combined premium of every business in the group, regardless of their individual premium size. Most groups offer discounts between 10 and 11 percent. Eligible group members can earn an additional discount by enrolling in Texas Mutual Insurance Company’s workers’ comp health care network.

“From my experience, Texas Mutual Insurance Company has hit a home run with its purchasing groups,” said Jim Sierra of the Texas Oil & Gas Association. “We’ve had this partnership for about 12 years now, and we’ve had a good experience with everybody at Texas Mutual.”

That experience has included over $3.5 million in group dividends.* Texas Mutual Insurance Company evaluates groups for dividends annually, based largely on premium volume and loss experience. Group dividends are separate from individual dividends. In 2006, the company distributed nearly $100 million in individual dividends among approximately 34,000 policyholders.

Last year, Snider earned a share of NFIB Construction’s $302,815 group dividend. He has earned $28,000 more in individual dividends since 2002.

“That return on our premium is a huge help,” said Snider. “One year, we put it toward another truck, which was something we needed for our company.”

Texas Mutual Insurance Company offers TDI-approved purchasing groups representing a variety of industries. Employers who are interested in joining a group should ask their agent, or click here.

*Past dividends are not a guarantee of future dividends, and the Texas Department of Insurance must approve all dividends.

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