Workers Compensation Flexibility is our Newest Midwest Family Advantage

Posted on 7/14/2020

Workers Compensation Flexibility is our Newest Midwest Family Advantage

Midwest Family Advantage Insurance Company (MFA) is a wholly owned subsidiary of Midwest Family Mutual (MFM). MFA began writing business in early 2018, but only the workers compensation line of business in our domiciled state of Iowa. This company has been a useful tool for Policyholders and Agents to meet the unique workers compensation needs of tough to write business classes and risks with higher mods and/or tougher loss experience. While MFM is filed with a .85 deviation in the state of Iowa, MFA is filed with a 1.10 deviation. Our strategy of filing slightly higher MFA pricing is something we plan to do in all non-monopolistic states within the MFM footprint. This not only allows us to write some accounts that don't qualify for MFM, but we will now be a market for monoline workers compensation in states where MFA has been filed and approved.


So where are we actively writing MFA business and where do we plan to expand? On April 1st, MFA workers compensation was filed and approved in the states of Idaho, Nebraska, and Illinois. In Idaho, we have filed a 1.15 deviation compared to a 1.00 MFM deviation, and in Nebraska, a 1.80 loss cost multiplier (LCM) has been filed and approved compared to a MFM LCM of 1.40. In Illinois, we filed a LCM of 1.95. Illinois is unique in that we are using advisory rates with a 1.00 deviation with MFM, but loss costs and a filed 1.95 LCM with MFA. The use of loss costs with one company and base rates with the other results in an approximate 23% increased premium on our MFA final rates. Ultimately, Midwest Family Advantage is not for everyone. Our more competitive MFM rates will be a better product for the vast majority of our customers and prospects. However, we're now in a better position to accommodate tough to place work comp risks. Furthermore, in states that have MFA filed and approved, we'll be less likely to be forced to non-renew valuable customers. We now have a better means to offer some form of renewal even if it's with a different company within the Midwest Family Group. Ultimately, our flexibility is your Advantage and that's why we're actively looking to roll MFA out in all of our non-monopolistic states.


Effective July 1st, we've filed and should be ready to write July 1st business in the states of Arizona, Utah, and Nevada. We're also hopeful to get MFA filed in the state of Minnesota, but COVID-19 has had an impact on that state's Insurance Department which has slowed MFA's admittance process. As soon as we're admitted, we'll be sure to file our rates, rules, and forms right away. Expect to hear more about Minnesota later in the year. In Arizona, MFA will have the same rates as MFM, but will be used primarily for monoline workers compensation risks. In Nevada, MFA will have a LCM of 1.85 versus a MFM LCM of 1.39. In Utah, MFA will have a LCM of 1.85 versus a MFM LCM of 1.34.


Midwest Family Advantage is in its early stages and has only been writing business in the state of Iowa until just recently. As such, MFA wrote $1.4 of written premium in 2019, but we expect much larger premiums now that we are able to write multiple state business in the Midwest. Our expansion to the Southwest states of Arizona, Nevada, and Utah will also accelerate our growth rate in the latter half of the year.


The greatest benefit of our Midwest Family Advantage offering is that the company will leverage the same great claims service as MFM. We're relying on the same adjusters for the claims process and simply sharing their cost across those two companies. That means that our policyholders will benefit from experienced claims examiners who will work hard to make sure that our Policyholders' employees are treated fairly and expeditiously to provide them the medical care they need and get them back to work within a reasonable timeframe. And that great claims service in conjunction with our underwriting flexibility is why 'Advantage' is in this company's name. We encourage all of our Agents to be aware of this great workers' compensation underwriting tool for their customers.


And once again, we thank all of you for your valuable business!



Aaron Boyd, MBA, CPCU, CIC
President & COO