(Image credit: Adobe Stock.)
When Tom Troy considered becoming CEO of The Mutual Group (West Des Moines, Iowa), the opportunity represented both a return to familiar territory and a new kind of challenge.
During a career spanning more than three decades, Troy has worked within nearly every major insurance ownership structure. His experience includes mutual insurers, stock companies and reciprocals, with executive roles at companies including Kemper, Safeco, Allstate, Liberty Mutual, USAA and, most recently, CSAA Insurance Group.
At The Mutual Group, or TMG, Troy is applying that experience to a model designed specifically for mutual insurers—companies whose local knowledge, enduring distribution relationships and commitment to policyholders remain valuable, but whose size can make it difficult to keep pace with the industry’s escalating demands for technology, data, talent and capital.
Tom Troy, CEO, The Mutual Group.
“When this opportunity came to go back to the beginning, if you will, and work with mutuals as they embrace the next wave of evolution in the insurance industry, I couldn’t help but think that this would be a great opportunity for me to lean in and use some of the experiences that I’ve had,” Troy says.
TMG launched in late 2023 with GuideOne Insurance (West Des Moines, Iowa) as its founding member. It provides operational capabilities across functions including underwriting, actuarial, claims, finance, product management, technology, human resources and legal, together with access to capital.
GuideOne remains TMG’s inaugural—and, for now, sole—member. Troy therefore describes his mandate as a sequence: demonstrate the model’s value through GuideOne, use that performance to earn credibility with other mutual insurers and then expand the platform without compromising the independence of its members.
“First and foremost, for us to earn the right to serve more mutuals, we’ve got to make sure that we’ve done everything possible to make our first and most important member feel satisfied with the work that we’re doing,” he says.
Establishing the Proof Point
Troy says GuideOne has increased its surplus, returned to top-line growth, improved profitability and begun investing more substantially in its infrastructure since the relationship began.
The work is not a project with a fixed completion date, he stresses. TMG’s role is to support continuous improvement in GuideOne’s operations while helping the carrier serve its agents and policyholders more effectively.
That continuing performance is also central to TMG’s growth strategy. Mutual insurers are unlikely to entrust major operating functions to an unfamiliar organization simply because its proposition looks attractive on paper. TMG must show that the arrangement works while demonstrating that joining the platform does not require a carrier to surrender its identity or its control over strategy.
“When we do that, I think that we can stand in front of a prospective mutual who might also benefit from the type of help that we provide,” Troy says.
Continued progress at GuideOne, he argues, will give TMG a proof point it can present to other mutuals that could benefit from its capabilities.
TMG is currently engaged in discussions with additional mutual insurers, according to Troy. He expects those conversations to proceed deliberately.
Mutuals’ commitment to independence is one of their defining strengths, but it can also make them cautious about operating models that require a deeper relationship than the purchase of a conventional product or service. Troy says TMG must respect that caution rather than attempting to accelerate decisions before prospective members are comfortable.
“These conversations will take a long time in some cases” as prospective members become comfortable with the relationship, he says. “We’re going to be very patient.”
TMG intends to be ready to serve them when they are prepared to move forward.
Preserving Independence Through Scale
TMG’s proposition addresses a structural problem facing many smaller and midsized mutual insurers. Their geographic and market specialization often gives them exceptional knowledge of their customers and communities. However, limited scale can leave them with higher expense ratios and fewer resources to invest in modern systems, sophisticated pricing, product development and specialized talent.
The answer, Troy argues, is not necessarily for mutuals to abandon their independence through acquisition or demutualization; it is to identify areas where they can combine resources without giving up the qualities that distinguish them.
TMG provides the operational services needed to run an insurer while its member companies retain their mutual structure, brands and strategic identities. Troy compares the arrangement loosely to a third-party administrator whose remit extends beyond claims across virtually the entire enterprise.
For a hypothetical $250 million, two-state mutual, continuously modernizing technology, products and pricing models can represent a daunting investment. Through TMG, multiple carriers could ultimately share the benefits of an operating platform whose capabilities would be difficult for each to fund independently.
Troy found an analogy for the model while driving across Iowa shortly before taking the role. Throughout the state, he encountered grain facilities bearing the names of county farmers’ cooperatives.
Individual farmers might lack the capital to build a major grain-storage complex, he observed, but they can invest collectively and gain access to the facility without surrendering ownership of their farms.
“The mutuals have known how to cooperate since the beginning,” Troy says. “If we just go back to the roots, that spirit of cooperation that was probably embodied in the original members of these mutuals long ago is something that might still be beneficial today.”
An Opportunity to Leapfrog
The need for cooperation is becoming more urgent as technological change accelerates, Troy insists.
Many mutual insurers operate within narrow geographic territories or specialized customer segments. That concentration can increase their exposure to catastrophe losses and restrict their ability to spread risk. At the same time, they must compete against national insurers able to distribute technology investments across much larger premium bases.
Troy nevertheless sees a potential advantage in the smaller size of many mutuals. Large insurers possess formidable resources, but they also contend with organizational inertia and complex legacy environments. Replacing systems accumulated over decades can be expensive, disruptive and slow.
A smaller mutual with sufficient commitment and resources may be able to move more decisively—potentially leapfrogging from aging systems to modern, AI-enabled approaches to policy administration, claims and billing.
“The motivation is there on the part of the mutuals,” Troy says. “The inspiration is there, the wisdom is there. If they chose to apply themselves in this space, they might very well be some of the companies that emerge as having moved the quickest with some of this new technology.”
Technology adoption, however, must remain tied to business and customer outcomes. Troy cautions against deploying AI or automation merely because the technology is available or because it promises abstract efficiency gains.
He points instead to practical measures: Can technology return a quote to an agent 50 percent faster? Can it help settle a claim three times faster? Can it provide policyholders with digital services they now expect while preserving access to personal service?
“The expense savings will follow,” Troy says. “But I think we have to focus on those things first because we can’t get so committed to growth or expense efficiency that we lose sight of what’s important for the customer.”
Earning the Right to Grow
TMG’s immediate future thus depends on balancing two objectives. It must continue strengthening GuideOne while building a case that its model can work for a broader community of mutual insurers.
The proposition may be timely. Mutual carriers face pressure to modernize, improve expense performance and develop capabilities that increasingly depend on scale. Yet many remain understandably protective of the independence, local relationships and institutional cultures that constitute much of their value.
Troy’s task is not to persuade them to choose between those qualities and modernization. It is to demonstrate that cooperation behind the scenes can help preserve what makes them distinctive in the market.
“I believe that the mutuals as a group will play an important role going forward,” Troy says. He hopes TMG can help them identify appropriate areas in which to modernize and serve customers and agents collectively.
For now, GuideOne is the test of that proposition. If TMG can turn its founding member into a convincing and durable proof point, Troy will have a stronger basis for arguing that mutual independence and operational scale need not be opposing choices.
CEO Bob Otis on Mutual of Enumclaw’s Return to Profitability