Texas Mutual dividends
Texas Mutual distributed $280 million in dividends to qualifying policyholder owners last year, marking the 20th year that Texas Mutual has paid dividends. This milestone has been made possible by our policyholders who choose Texas Mutual and make safety a priority. Watch the video below to find out more about how ownership pays at Texas Mutual.
Dividends help us share the company's financial success with qualifying policyholders who have contributed to that success by keeping workers safe and losses low. When an employer purchases a policy at Texas Mutual, they are not only buying financial security for themselves and their employees. They are also becoming owners in Texas Mutual. Our policyholders have the opportunity to receive dividends, just as stockholders of publicly traded companies do.
Each year, Texas Mutual's board of directors votes to approve dividends. Dividends are based on financial performance and therefore are not guaranteed, but Texas Mutual has distributed dividends 20 consecutive years.
The financial impact of dividends
For many policyholders, dividends are key to managing their workers' comp costs. Dividends allow us to offer lower net premium than we would be able to simply by lowering the price up front. In addition, dividends give more control over the total cost to the policyholder because they are based on the policyholder's loss experience. They also give Texas Mutual the chance to recognize our policyholders across the state who are working hard to keep employees safe and workers' comp costs low, because that's a commitment that deserves to be rewarded.
There are two components of a Texas Mutual dividend: safety, paid through the annual component, and loyalty, paid through the retention component.
- The annual component rewards current policyholders who had an acceptable loss ratio for their policy that expired in the previous calendar year. This is achieved by keeping losses low and making workplace safety a priority.
- The retention component recognizes those who choose Texas Mutual year after year by rewarding current policyholders for up to four previous, consecutive years of acceptable, combined loss ratios ending with the policy that expired in the previous calendar year. Some longtime policyholders see their dividend increase over the years because of the retention component.
Qualifying for a dividend
To be eligible for a dividend, a policyholder must have a current, in-force policy and be in good standing with Texas Mutual.
There are two ways to earn a dividend. Policyholders can earn the annual component that rewards loss history by having an acceptable loss ratio for their policy that expired in the previous year. They could also qualify for the retention component that rewards customer loyalty. Some policyholders qualify for both components, and some qualify for only one.
Early qualifier dividends
Newer policyholders who haven't been with Texas Mutual long enough to earn a regular dividend could receive an early-qualifier dividend, which rewards policyholders for safe workplaces sooner. Early qualifier dividends are paid separately in November.
Safety group dividends
Policyholders who are members of a safety group may also qualify for an additional group dividend if the group has favorable results. These dividends are based on the group's loss history rather than the company's individual history. This means that those who are in a safety group could potentially earn two separate dividends from Texas Mutual, an individual dividend and a group dividend.
Texas Mutual has distributed dividends each year for the past 20 years, bringing the total payout to $2.5 billion since 1999. In 2018, we distributed a company-record $280 million to more than 50,000 policyholder owners.
Frequently asked questions for dividend recipients
When are dividends paid?
Dividends are paid in late June. Policyholders are able to log in to texasmutual.com and see whether or not they'll be receiving a dividend by mid-June. Those who don't have a texasmutual.com account but wish to login and see their dividend information should call our Information Services Center at (800) 859-5995.
How will I get my check?
Policyholders will receive their check from Texas Mutual through the mail or directly from their agent.
What if I misplace or accidentally discard my check?
Texas Mutual can reissue dividend checks. Call our Information Services Center at (800) 859-5995 for more information.
Are dividends tax exempt?
In most cases, dividends are tax exempt, but employers should consult their tax professional.
Is the dividend program guaranteed every year?
Dividends are based on performance and therefore are not guaranteed. Texas Mutual has, however, distributed dividends for 20 consecutive years.
For agents: Marketing Texas Mutual's dividend program
Agents across Texas leverage our dividend programs to attract and retain customers. Through our individual, early qualifier and safety group dividends, policyholders from all types of industries can take advantage of the fact that when you connect them with Texas Mutual, they become a policyholder owner that has the ability to reap the rewards of our financial success.
Texas Mutual offers free materials to help you market dividends among your clients and potential clients. Take a look at The Dividend Difference. This fact sheet can help you use Texas Mutual dividends as a marketing tool and help you and your clients understand the program.
NOTE: Dividends are based on performance, are not guaranteed and must comply with Texas Department of Insurance regulations.