Missouri’s largest workers comp insurer seeks legislative approval to become private company

Missouri Employers Mutual was created in 1993 to address a crisis in coverage for workplace injuries. The CEO says it could seek business out of state with a change in the law

By: - February 8, 2023 12:08 pm

Jim Owen, chief executive officer of Missouri Employers Mutual Insurance Co., testifies in favor of a bill allowing his company to become a private company. (Rudi Keller/Missouri Independent)

Missouri Employers Mutual, the state’s largest workers compensation insurer, is seeking to be removed from state control under legislation heard Wednesday in a Missouri House committee.

Chief Executive Officer Jim Owen testified that policyholders of the Columbia-based company would see little difference under a revised organizational structure while the company would likely be able to offer lower premiums and be more competitive providing coverage to employers with operations outside the state.

“Missouri should, really, not be in the business anymore of sponsoring insurance companies,” Owen told the House Insurance Policy Committee. “It should be in the business of regulating insurance companies.”

The bill, sponsored by Republican Rep. Alex Riley of Springfield, would repeal the 1993 statute that established Missouri Employers Mutual, called MEM, and direct that it convert to a private mutual company by 2025.

The committee did not hold a vote on the legislation.

The bill is not the first effort to take the company private. Soon after Owen took over as CEO in 2011, a bill was filed for the 2012 session by lawmakers who argued the company had an unfair advantage in the market because of its tax-exempt status as a state-sponsored entity. And in 2021, a bill to privatize the company was introduced but did not receive a hearing.

The problems addressed by the 1993 law creating the company do not exist any more, Riley said. 

At that time, the workers compensation market was in a crisis and many companies refused to write policies in the state. Missouri Employers Mutual was established and given a $5 million state loan to start writing policies.

In 2021, Missouri Employers Mutual had 22.77% of the workers compensation insurance market, more than seven times the share of its two closest competitors. It covered 14,500 businesses, had $229 million in premium income, $12 million in net income and assets of about $700 million.

Because it is a mutual insurance company, policyholders are also shareholders. The company paid $7 million in dividends in 2021 and had $273.6 million in net shareholder equity.

While it is not a state-operated entity, it is still under a great deal of state direction. The company is limited in its ability to grow further, Riley said, because of a provision in state law limiting it to covering only Missouri employers.

That locks them out of about half of the state market, Riley said.

“This puts them at a disadvantage,” he said.


No one spoke in opposition to the bill, which drew support from business organizations including Associated Industries of Missouri and the Columbia Chamber of Commerce, as well as insurance lobbyists.

Brad Jones, lobbyist for the National Federation of Independent Businesses, said he does not expect his member businesses who have policies with Missouri Employers Mutual to see any difference. 

The company has a wide range of services to help employers, he noted.

“I have full confidence that those services will be maintained for those small business members,” Jones said.

Covered employers would see no change in the company’s operations, Owen told the committee, except lower premiums.
“Competition drives down prices,” Owen said. “It always has and it always will and it will in this case.”

While the statutes controlling Missouri Employers Mutual do not allow it to write policies for employers who operate in multiple states, it has worked around that restriction through a subsidiary called Previsor Insurance. 

Previsor provides coverage in six of the eight states adjoining Missouri, excluding only Kentucky and Oklahoma. The work-around isn’t efficient, Owen said in an interview after the hearing.

“We can still use a subsidiary but what the agents have told us is that is not working,” Owen said.

Missouri Employers paid its workforce $33 million in salaries in 2021, according to the company’s financial statement. Owen said that he does not expect to personally receive a large benefit from privatization unless it succeeds in making the company more profitable.

The company is giving 3% raises this year, he said.
“I would guess my salary would be the same as everyone else,” Owen said. “If we are profitable, it would graduate up.”


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Rudi Keller
Rudi Keller

Rudi Keller covers the state budget and the legislature. A graduate of the University of Missouri School of Journalism, he spent 22 of his 32 years in journalism covering Missouri government and politics for the Columbia Daily Tribune, where he won awards for spot news and investigative reporting.