Two headquarters are better than one

There are times when the whole is greater than the sum of its parts. The merger of two Indiana mutuals into one — Oakwood Mutual — is just such a case.

Incorporated in 2019, Oakwood Mutual in its current incarnation is relatively new. However, the two companies that joined forces to create it — German Mutual Insurance Company of Indiana, founded in 1868, and the Mutual Insurance Association of Southern Indiana, founded in 1899 — have over 250 years of combined experience protecting policyholders.

PATIENCE PAYS OFF

The merger was years in the making, according to Brian Dettmer, Oakwood Mutual’s current president.

“In 2015 the landscape was changing for small mutuals,” he said. “There were mutuals going out of business because they didn’t have succession plans or plans for putting new technology in place.”

That wasn’t an error Dettmer was going to make. Then the company manager of German Mutual in Decatur, Ind., he was confident his company was strong enough to weather turbulent times. Meanwhile, four hours to the south, Rick Blankenship, who headed Mutual Insurance Association of Southern Indiana, in Evansville, Ind., felt similarly confident.

“Rick and I knew each other well from association involvement,” Dettmer says. “At the time, both of our mutuals were already on a stable footing, and we intended to keep it that way.”

A BRIGHT FUTURE MADE BRIGHTER

Both companies had solid portfolios of products and rosters of agents and policyholders. But while the future might look bright for each company individually, the two men saw it could be even brighter if they joined forces. A merger would take the new company statewide.

“Rick and I saw that a merger could potentially create a surplus nearing $20 million, increasing our financial stability even more, and create a predictable investment income stream we could use to keep our rates stable, and to position the new company for growth.” Dettmer said.

This made the decision to merge look easy, but it wouldn’t be quick. There were roadblocks to overcome. For one, some members of the two companies’ boards were skeptical about the move.

“Some [board members] weren’t really thinking about a merger,” said Jason Mueller, who replaced Blankenship when the latter retired from the Southern Indiana Mutual. Mueller had been with the company since 2012, serving as its secretary/treasurer and company manager. He was also a booster for the merger plan. “So, for the next four years we stayed in touch and continued to talk about it [with Brian].”

THE STARS LINE UP

The stars seemed to further align when the boards’ memberships changed, creating a different collective mindset. And one other factor made the merger easier to envision: Grinnell Mutual.

“When we started our discussions, we noted that both companies were with Grinnell Mutual, and both had the same policy processing system,” says Dettmer.

But why merge if the two companies were doing fine on their own? Oakwood Mutual’s performance since the two companies became one has vindicated Dettmer’s, Blankenship’s, and Mueller’s vision. The company’s total policy count has reached nearly 5,000, while its total customer count is over 4,600. The company has retained its staff and board memberships and established two headquarters — one in Decatur (overseen by Dettmer) and the other in Evansville (overseen by Mueller).

Brian Dettmer thinks with pride about those early discussions when “we talked about what the future was going to look like and we thought maybe there was a chance for us to come together and build something different, better, and stronger.”