When Iowa mutual GuideOne Insurance began assessing ways to add an infusion of capital to strengthen its balance sheet, the company went to the usual places a mutual of its size might turn to for financial backing.
Executive Summary
Leaders of an Iowa-based mutual insurer and a recently launched services platform for mutual insurance carriers provide the backstory of how the innovative platform, backed by funds from Bain Capital, helped GuideOne emerge from the multiple challenges of Midwest weather, inflation, a surplus drop and rating agency scrutiny with tools to manage all of them—and how The Mutual Group is poised to help other similarly situated mutuals as well.“We were working with the banker and looked at surplus notes and all those traditional things that mutual insurance companies do, and we just weren’t finding a great solution that we thought was the best fit for our business,” said Tim Fleming, former senior vice president of core commercial lines at GuideOne.
As conversations went on, it became clear that finding the significant capital to meet GuideOne’s needs would be difficult. Like many Midwest mutuals, GuideOne experienced a drop in surplus in the early 2020s driven by rising loss costs and an increase in claims severity.
