Expansion and planning for the future have always been part of Forward Mutual’s story, from offering insurance to one township in the mid-1870s, to offering insurance to the full state of Wisconsin, which we will begin doing in 2020. Yes, as of January 1, 2020, Forward Mutual will become a statewide Wisconsin mutual company.
As forward-thinking as Forward Mutual is—thus its name—it’s also important we celebrate our history, particularly the mutual insurance history.
The concept of mutual insurance companies originated in England in 1696 with the formation of the first mutual fire insurer. In 1752, Ben Franklin helped introduce mutual insurance to the United States with the founding of Philadelphia Contributionship for the Insurance of Houses from Loss by Fire. This company is still in business today.
By the 1870s, when Wisconsin was still in its early statehood, immigrants began settling the area and building homes and farms. They heated their homes with a wood fire, cooked with a wood fire, and used oil lanterns for light. Fire was a great risk for these homesteads. As a result, the state of Wisconsin allowed the formation of town mutual insurance companies.
Forward Mutual is a mutual insurance company. It originated in the 1870s as two companies; the Town of Watertown Mutual Fire Insurance Company and Ixonia Mutual Fire Insurance Company. Today Forward is one of 64 mutual companies associated with the Wisconsin Association of Mutual Insurance Companies (WAMIC) and one of more than 1,400 companies with the National Association of Mutual Insurance Companies (NAMIC).
What does all this mean to you, the policyholder?
Actually, it means a lot. Because Forward Mutual is a mutual, it is owned entirely by its policyholders—those that pay premiums to receive insurance. Compare this to a stock-owned insurance that is owned by a limited amount of shareholders. While a mutual earns profits for all its policyholders, a stock-owned company earns profits for only those few that own its stock.
Benefits to Our Policyholders
Our national association NAMIC further explains how longstanding mutuals such as Forward Mutual benefit their policyholders:
- Mutual insurance companies are part of Main Street, not Wall Street. Mutual insurers do not sell stock and do not list on stock exchanges. Yet some of the largest insurance companies in the U.S are mutual insurers.
- Mutuals have one goal – to serve policyholders. There are no shareholders with competing interests. Mutuals do not focus on quarterly earnings reports because, unlike stock companies, there are no short-term financial performance pressures to earn a return on stockholder investment that apply to publicly traded companies.
- Mutuals’ focus on policyholders allows them to make financial decisions and commitments based on long-term goals of financial strength and stability that support policyholder satisfaction and retention.
- Mutual companies, boasting a median age of more than 100 years, have a proven track record of prudent fiscal management, enabling them to remain a stable force in the market and a reliable source of insurance for policyholders.
- Mutual policyholders—sometimes referred to as members—have the same rights and protections as non-mutual policyholders under state regulation and access to guaranty funds in the event of insolvency (as of January 1, 2020, Forward Mutual will become a member of the Wisconsin Insurance Security Fund to protect Wisconsin resident policyholders).
- Mutual members enjoy enhanced policyholder rights including the ability to vote for directors, approve major corporate transactions, receive policyholder dividends if declared, and ability to share in surplus (subject to state law).
Just as we have throughout our company’s history, Forward Mutual carefully follows the insurance industry, the economy, and the needs of its insureds. As we serve our policyholders, be assured we will consistently act in their best interests and that of our mutual—the mutual we all own together.
