What cratered MSI Insurance?
Matt's Annotated Résumé
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MSI Insurance 1. and primarily the main property/casualty company Mutual Service Casualty, Inc. went from being a small but financially stable regional insurer in the mid-1990s to a financial trainwreck by the end of 2001. I was there during this time (starting in late December 1996) and thought I'd go back and look at the things that killed MSI. Even though I was reporting on results, I was in the Marketing department to start with and my duties were primarily concerned with direct written premium, unit sales, agent profitability, productivity and that sort of thing. I didn't report financials at MSI (I would include much more financial data once we became part of COUNTRY) and the company was weirdly secretive or even slightly delusional 2 about financial results. As a result, even as things reached maximum tension in late 2001, most people remained oblivious of how dire the Company's situation was. I could tell things weren't going well from the anxiety and tension among the accounting and senior actuarial staff, but didn't see how bad it was until I read the 2001 Mutual Service Casualty Insurance Company Annual Statement (AS).
You'll see this again, in context and date order, but if one line captures the appalling speed and extent of MSI's demise, it's a footnote in the 2001 Annual Statement:
At December 31,
2001 the consolidated group had $107,661,171 of operating loss carry forwards originating in 1997 through 2000 which will expire, if unused, in years 2012 through 2021. (AS 2001, p. 14.2)
So, just to be clear here, from January 1, 1997, two days after I started at MSI, through December 31, 2000, Mutual Service Casualty lost $73,740 per day. That's somewhat worse than burning a $50 bill every single minute for four solid years.
Due to this obliviousness, and the speed with which senior management managed to drive this company into near-failure, I thought I'd go back and take a look at the items that brought MSI to its knees and resulted in a virtual takeover by COUNTRY Financial 3. I don't say this with bitterness; we were lucky that COUNTRY came along and rescued MSI, and COUNTRY is an honorable company I was happy to work for. But it still leaves the question hanging, What Happened to MSI?
No one person knows the whole tale. I am starting with the documentation, but would be like to flesh out the details beyond the bare numbers. Contact me with your stories, and I'll fill in the gaps. But, as a start, here we go. Enjoy!
Note: table needs fixing. Tables and CSS are new to me and I'll sort it out shortly.
Mutual Service Casualty's Unassigned funds (surplus), 1999-2001
Unassigned funds (surplus)