Captive Insurance Helps Missouri Mutuals Return to Profitability

A group of mutual insurers in Missouri has reversed steep losses by restructuring reinsurance strategies and forming a new collaborative pool, according to recent figures released by the Missouri Department of Commerce and Insurance (DCI). In 2024, 380 mutual insurance companies served Missouri's agricultural and rural sectors by administering over 205,000 policies, representing more than $61 billion in gross in-force coverage.

The industry reported a net profit of $4.8 million in 2024, a sharp turnaround from a $17.7 million loss the previous year. The recovery followed the creation of the Missouri Mutual Insurers Captive, a captive insurance company formed as a reinsurance pool, launched in late 2023 to address the growing cost and limited availability of reinsurance.

"Getting the mutuals to this point took some out-of-the-box thinking and collaboration with the industry to pull it off," said John Rehagen, director of the department's company regulation division.

Previously, many of the state's mutuals depended on a Wisconsin-based reinsurer now undergoing liquidation. Without an alternative, several insurers would have faced consolidation or closure. The captive reinsurance pool enabled participating companies to reduce reinsurance expenses and stabilize operations.

In 2024, all members of the pool reported profits. Collectively, they generated $4.8 million in net income on $51.8 million in direct premiums, yielding a 9.2 percent profit margin, compared to the broader industry's average margin of -1.4 percent. Membership in the captive reinsurance pool grew from 18 to 21 insurers in 2025, representing nearly one-third of Missouri's 65 licensed mutual insurers.

"I am pleased to see the pool's results, in light of this year's severe weather events, and believe it will play an important role in preserving this vital market segment that serves Missouri's farmers and rural communities in the future," said DCI Director Angela Nelson.