![\"HIstoric](\"http:\/\/forwardmutual.com\/news\/wp-content\/uploads\/2017\/05\/4_6_ComparingCapitol.jpg\")
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By HOWARD WIEDENHOEFT<\/p>\n
Mutual companies\u00a0need capital to meet the challenges of\u00a0operating a business and offering insurance.\u00a0Historically, mutual companies have managed a financial security that allows them to focus on all\u00a0of their policyholders rather than a few select stockholders. Let’s learn\u00a0how how our founding mutuals\u2014Ixonia Mutual Fire Insurance Company<\/span><\/a>\u00a0and\u00a0Watertown Mutual Fire Insurance Company<\/span><\/a>\u2014 capitalized their companies\u00a0in the\u00a0late 1800s.<\/span><\/p>\n In their early days, having capital or assets was not important for the two mutuals. Both kept their\u00a0treasury at a minimum and charged a simple policy fee, 75 cents and 50 cents respectively. It’s assumed that Ixonia Mutual\u2019s policy fee was compensation to the secretary for his work, as no record of it was recorded in the company\u2019s books.<\/span><\/p>\n Additionally, Ixonia Mutual charged a one-time one dollar\u00a0membership fee. Watertown Mutual charged a policy premium rate per thousand on insurance. There were different rates based on the distance between buildings and\/or the type of building. The policy premium and policy fee were for the life of the policy, which was five years. These fees were charged to cover the cost of running the mutuals.<\/span><\/p>\n When a loss occurred, both Ixonia Mutual and Watertown Mutual\u00a0paid claims to the property owner by way of “post assessment.” This means, after the occurrence the mutual\u00a0charged\u00a0all<\/i>\u00a0the policyholders at rate per thousand of the property owner’s insurance\u00a0to cover his\u00a0loss. Imagine paying no policy premiums! But also imagine the difficulty of coming up with money on the spot to pay for a neighbor’s loss. This post assessment means of coverage was doable\u00a0because the only perils the mutuals insured were fire and lightening.<\/span><\/p>\n In 1878, the annual reports of each mutual presented very different amounts of capital. Watertown Mutual had $2,082, while Ixonia Mutual had $76.<\/span><\/p>\n Comparing the records of these two mutuals is interesting. The early records of Watertown Mutual are written in German and included only minutes of annual meetings. There are no minutes of board meetings or a treasurer’s book. Ixonia Mutual, on the other hand, preserved minutes of annual meetings and any other meeting the board held, including approval of losses and meetings to levee an assessment. The company also preserved its treasurer\u2019s book.<\/span><\/p>\n In the 1940s, the mutual insurance industry began to change and Ixonia Mutual and Watertown Mutual followed right along. Both mutuals began offering coverage for supplemental perils, hail, theft, and vandalism (however, coverage for wind damage did not come until later). With these additional coverages came increased costs and the mutuals began charging their policyholders by way of an annual assessment; that is, they charged in advance for the claims they could expect for that upcoming year. The mutuals set the policy rates to cover losses and expenses and 1-2% profit on an average claim year. \u00a0If they had a below average claim year, the money not used was added to their assets\/capital. These assets\/capital generated interest income which was then used to pay losses on an above averaged claim year or added to their capital on average or below average claim year. This method of management stabilized the policyholder’s costs from year to year.<\/span><\/p>\n These days Forward Mutual builds\u00a0its capital by way of advance premiums. While similar to an annual assessment,\u00a0it’s a practice that provides greater\u00a0financial security to cover the variety of losses today’s property owners face. More on that to come.<\/span><\/p>\n Mutual insurance today is certainly more complex\u00a0than it was 150 years ago. Yet Forward Mutual is proud to maintain\u00a0an ever-strengthening financial security and\u00a0continues to\u00a0provide for its policyholders.<\/span><\/p>\n By the Minutes: Introduction<\/a><\/p>\n 1872 Watertown Mutual Founded<\/a><\/p>\n 1875 Ixonia Mutual Founded<\/a><\/p>\n Comparing the Capitalizing of Two Early Mutuals<\/a><\/p>\n A Mutual\u2019s First Claim<\/a><\/p>\n Supporting Dairy in the Late 1800s<\/a><\/p>\n 1879 Early Challenges for a Young Mutual<\/a><\/p>\n Ixonia Mutual\u2019s First $1000 Loss<\/a><\/p>\n 1885 A Year of Neighbor Helping Neighbor<\/a><\/p>\n Changes of Bylaws<\/a><\/p>\n Our Dairy Heritage<\/a><\/p>\n Insuring Automobiles<\/a><\/p>\n Taxes, War and the English Language<\/a><\/p>\n Supporting the Community\u2019s Fire Protection<\/a><\/p>\n Board Directors and Their Meetings<\/a><\/p>\n Standardization of Wisconsin Mutuals<\/a><\/p>\n Of Electricity, Radio and Foxes<\/a><\/p>\n Our Annual Meetings Over the Years<\/a><\/p>\n Tumultuous 1930-1940s<\/a><\/p>\n How a Major Disaster Affected Extended Coverage and Reinsurance<\/a><\/p>\n Surviving the Big Dogs in the 1960s<\/a><\/p>\n Introducing Agents to the Mutuals<\/a><\/p>\n Accounting Over the Years<\/a><\/p>\n Centennial Anniversaries<\/a><\/p>\n Mutual Offices<\/a><\/p>\n Mutual Managers and Staff<\/a><\/p>\n Establishing Confidence in Financial Strength<\/a><\/p>\n Entering the Era of Computers<\/a><\/p>\n The 1990s, Advancement and Angst<\/a><\/p>\n The Start of the 21st Century<\/a><\/p>\n Concord and Watertown Merge<\/a><\/p>\n Ixonia Mutual and Watertown Mutual Merge and a New Company is Formed<\/a><\/p>\n Setting the Stage, Moving Forward with a New 2020 Vision<\/a><\/p>\nPaying Claims<\/h4>\n
Industry Changes<\/h4>\n
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