Omaha Forums

The state of Washington has fined Mutual of Omaha 63K for violating state insurance laws.

An excerpt from the Puget Sound Business Journal:

"Insurance Commissioner Mike Kreidler said Mutual of Omaha's violations allowed the company to avoid making payments into the state's high-risk health insurance pool. He said the company incorrectly reported its loss ratio from 1999-2005 by combining its loss ratio with the business of two other insurance companies that it administered."

Doesn't sound like much of a fine to me.  I know some businessmen who would call that a slap on the wrist and just the "cost of doing business". ie, why bother because you might get away with it and if you don't, not much of a punishment.

It's all my fault. I'm sorry. ;)

Mutual has lots of problems. Look for them to drop out of the Fortune 500 count next year.

They're my insurance provider... I guess I'll be looking for another rate increase next year!

It's going to happen. They told us it won't but I don't doubt it.

How are you supposed to know?

We had a company wide meeting that told us how 'great' things are going.

DTO Luv wrote:We had a company wide meeting that told us how 'great' things are going.

I remember bringing up some vital signs on MofO that are well known by people in the industry. The vital signs and some actions management has taken that are viewed by the industry as risky actions being taken by a company that is desparate to turn things around caused me to call into question MofO's long term survival. I got some dandruff up pretty good from others on the forum that I was blaspheming. Like a lot of other industries, there is a lot of merger and consolidation going on with insurance. It takes a lot bigger company to survive today than it did just a few short years ago. It will take a bigger company to survive in the insurance marketplace five to ten years from now. Hopefully MofO will survive but the hill it has to climb just keeps getting steeper and steeper.

Case in point, my company is about 70 times larger than MofO and it is feeling pressure to merge and get bigger to survive. We are definitely looking for other companies to purchase.

I think MofO will eventually be bought by another mutual company. Such a purchase will help both mutual companies survive for another day. MofO has a very strong brand image and thus I don't think the acquiring company will cancel out the name. MofO and the logo will survive but may be owned by someone else with a stable full of brands.

Of course, MofO may just surprise the rest of the industry and be one of the survivors. But the trend of the last fifteen years or more suggests otherwise. Another way to survive would be to find a niche of specialization in a product or two. Or perhaps the company can find a way to get under the radar and go forward as an independent regional player only.

Who knows? The future is going to be a lot different for MofO and the rest of the industry. That much is a sure thing.

MoO has plenty of issues and I'd agree they will drop out of the Fortune 500 soon. They will be losing almost 1,000 jobs as of next year as well when the Medicare contract is turned over. They cut a deal with WPS that as soon as a contract is awarded to their joint effort, the employees will then no longer be with Mutual and will have the "opportunity" to join WPS. MoO has been the largest Part A fiscal intermediary in the country and with contractor reform, they decided Medicare business was not a "core product" for them and thus as the contracts are expired and reissued, they will fall out. WPS is "committed" to keep the employees from Omaha here, but there's no telling where that will be.
MoO will probably not merge with another company. Being a mutual company, the policy owners would have to approve (as would the state insurance commission) of any merger - assuming the company wanted to merge with another. If a desire to merge came in to being, it would be because the company knows it's done (it's a possibility).
Sad to see a large, community oriented company take a fall like this.

I know all about that WPS stuff. I hear about it everyday. I've asked about where the jobs will be and they said they still plan on staying in Mutual's South Site building where we are now. I'm in Medicare so this all does affect me. I don't know if WPS (a bigger F500 than Mutual) is planning on keeping everyone.

This is from a post I submitted back in September of '05..As told to me by a good friend, who is also a VP at MofO:

'Mutual of Omaha is a 'mutual' company that is owned by its policyholders.The company is not a public company. Which means it has no stock for sale. De-mutualization is a very costly option..One that would cost over $50 million..In order to have a larger insurance company 'take-over' MofO, a proxy mailing to over 100 policy holders would have to be sent and be subject to a vote of approval. Then after that, be subject to a vote of 'approval' from the Board of Directors.'..

..Ciao..LiO....Peace

A couple of comments: First MofO is not dead yet so let's not write them off. But the landscape is simply tough so they have their work cut out for themselves. They're hardly the only company in this boat.

About Mutual companies: painting with a broad brush and overgeneralizing, mutual companies with only a few exceptions are smaller than the stock companies out there today. With the merger/acquisition/get bigger phenomena going on, mutual (smaller) companies are under more pressure to merge or grow or somehow get a larger economy of scale to compete.

The number of mutual companies left standing today is very small compared to how many there once were. Many mutual companies have already merged or have already demutualized. Bottom line is pretty clear that MofO has to grow, find a niche where it can be profitable and competitive at its present size, merge with another mutual, demutualize or fold. The last one, IMO, will not happen. Demutualization will not likely happen either. Thus they will find a way to grow, find a niche or merge. Most likely to me seems to be the merge with another mutual that is also seeking to grow to keep afloat. Again MofO is not alone in this. There are a lot of mutuals talking about the possibilities right now.

It will be interesting to watch. Hopefully it won't be sad at the same time.

It looks like demutualization is an option for us but not at this time.

WPS has announced they will keep the Mutual employees in the South Tower after the transition for the Medicare business. This is odd to me as they have celebrated how much they own their own buildings. I would still be suspicious of them bailing out of Omaha upon the completion of whatever short-term lease they end up with at Mutual. If they're not buying property, it makes me think they're not as "committed" to staying in Omaha as they may have alluded to. I wish all of those people the best.

I'm really going to try to get the |expletive| out of here. I found out today that my job is going to be iffy.

DTO Luv wrote:I'm really going to try to get the |expletive| out of here. I found out today that my job is going to be iffy.

Best wishes to you DTO!

Do you work here, Stomsu?

Former Mutual employee of 17 years (last 7 were in Medicare) - I left last year in November. We most likely shared a division off-site or two.

http://www.omaha.com/index.php?u_page=1 ... id=2373062

Omaha World Herald wrote:Mutual of Omaha said today it is selling its health insurance business, a mainstay of the company since it was formed 98 years ago.

The sale affects about 350,000 people in Nebraska and Iowa, whose insurance will transition to Coventry Health Care of Bethesda, Md., and another 115,000 people in other cities who will be dropped after their policies expire.

Omaha World Herald wrote:About 400 employees who work in Mutual's health insurance operations will join Coventry...

Wow! That really came out of nowhere.

Details seem sparse at the moment, so the big question:

How does this affect jobs in Omaha?

Edit:  OK, duh.  I swear that wasn't there the first time I read the article.

-Big E

What percentage of Omaha's operations is Mutual's health insurance operation?

Lonnie

Not really, this is something they have talked about for sometime. There is no money in health insurance anymore. Mutual has the potential to make much more off of life, disability, and long term care than they do off of health.

Lonnie, they have been scaling back health operations for sometime. Trust me this is not a big surprise. Don't read much into it. The scale back has been going on for probably close to 15 years.

CapitalGuy wrote: Mutual has the potential to make much more off of life, disability, and long term care than they do off of health.

And the banking industry which they will roll into later this year..

At least it looks like none of the jobs are being transferred out of Omaha.

They still might leave Midtown which would suck though.

100th Anniversary of Iconic Insurer: Omaha proud of company, and feeling is Mutual

http://www.omaha.com/index.php?u_page=1 ... d=10575908

STEVE JORDON WORLD-HERALD STAFF WRITER wrote:Mutual of Omaha, coming off a banner year despite the recession, marks its 100th anniversary with a celebration starting this week to thank its employees and its namesake city.

Thursday is the official anniversary and the 100th birthday party, but the festivities continue all week for the 3,854 workers at Mutual's headquarters at 33rd and Dodge Streets.

The party moves into the community later this year, as Mutual employees volunteer at Omaha-area charities in a program called "100 Days of Caring," and the company hosts special events aimed at recognizing Omaha's role in its success.

Mutual will report a profit for 2008 despite the recession, which has led to losses and layoffs at many financial companies, said Dan Neary, chairman and chief executive. In fact, the company is trying to fill about 200 job openings, and employees have been working overtime to process record sales of life insurance in recent months.

Looks like MoO is doing pretty good.  :D

Life insurance is actually quite resilient, especially in economic downturns.

I didn't see it anywhere in this thread but the health insurance jobs that were in midtown with Mutual will be near Village Pointe in the Coventry building out there that is being built.

Greg

Mutual sidesteps most of market mayhem, adds jobs in 2009

http://omaha.com/index.php?u_page=1208&u_sid=10582676

STEVE JORDON WORLD-HERALD STAFF WRITER wrote:Mutual of Omaha wasn't immune from last year's decline in stocks and bonds, which was the main reason its profits dropped by 78 percent in 2008.

But the insurance and banking company avoided a loss, retained a strong financial position and boasts one sure sign of growth: It expects to add employees this year.

To fill 200 or so current job openings, some of them new positions, Mutual may choose from, as of Monday, about 3,400 applicants.

About 100 of the openings are in Omaha, where Mutual employs about 3,850 people out of its total 4,970-person work force.

Mutual said Monday its net income for 2008 was $47 million, down from $217 million in 2007. The 2008 results included $133.7 million in investment losses and $34.1 million in expenses from acquiring two failed banks last summer.

Mutual of Omaha CEO Dan Neary to retire; Blackledge named president, next CEO

http://www.omaha.com/money/mutual-of-om ... d98ef.html" onclick="window.open(this.href);return false;

Steve Jordon / World-Herald staff writer wrote:Dan Neary announced Friday he would retire as chief executive of Mutual of Omaha next year, retaining his role as chairman. The Omaha insurance company’s directors named James T. Blackledge as president and future CEO.

http://www.bizjournals.com/dallas/news/ ... tgage.html

Dallas mortgage company PrimeLending and Mutual of Omaha Bank are partnering in a joint venture to create Mutual of Omaha Mortgage.

The new company will marry PrimeLending’s residential mortgage services with Mutual of Omaha’s customer base. PrimeLending will provide loan fulfillment and other parts of the mortgage process for Mutual of Omaha Mortgage.

Mutual of Omaha Mortgage will be located in Omaha. It will begin hiring for a variety of positions in the next 45 to 60 days and is expected to begin operations in the third quarter.

http://www.omaha.com/money/mutual-of-om ... 29844.html

Mutual of Omaha said Thursday it plans to acquire Synergy One Lending, a mortgage company based in San Diego, by June for an undisclosed price.

Synergy One is licensed to sell mortgages in 45 states, with a network of loan officers and mortgage brokers and direct sales channels. Pending regulatory approval, it will operate as a subsidiary of Mutual of Omaha Bank, said Jeff Schmid, chairman and chief executive of the bank, and Synergy One President and CEO Torrey Larsen.

Synergy One will keep its name and its headquarters will remain in San Diego.