Purchasing Groups

Group purchase plans allow employers to enjoy premium discounts and customized safety services.

Click here for a printer-friendly flyer about the benefits of group coverage.

Open Purchasing Groups

About Purchasing Groups

Benefits for the Agent

Benefits for the Client

Getting Started

Open Groups vs. Exclusive Groups

Questions About Group Purchase Plans

Open Purchasing Groups

• Texas Mutual Insurance Company is the leading writer of group purchase programs in Texas.
• Purchasing groups offer an excellent way to increase your market share and develop a sound book of business.
• By partnering with the group, you can play a prominent role in developing or enhancing its loss prevention program. Texas Mutual Insurance Company will assign a loss prevention consultant, who is an expert in the group's common operations.
• Your Texas Mutual^® regional marketing representative can give you a purchasing group application and help you set up a purchasing group.
• For more information about the Texas Mutual^® group purchase programs, contact a marketing representative at (800) 859-5995.

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About Purchasing Groups

The Texas Department of Insurance allows employers in similar businesses to form purchasing groups in order to reduce their workers' compensation insurance premiums. Group participation is limited to Texas employees as defined in the Texas Labor Code. Insurance agents play a key role in the formation of these groups. Agents who become involved in forming a purchasing group can also benefit from commissions generated from higher premium volumes and from vastly improved efficiency in their marketing efforts.

We sponsor workers' compensation insurance purchasing groups that offer policyholders a premium discount and access to our exceptional customer services.

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Benefits for the Agent

Purchasing groups offer an excellent way to increase an agent's market share and develop a sound book of business. Similar to target marketing, purchasing groups give agents greater responsibility and control of their business by defining a market to be pursued.

Agents who work with purchasing groups often see their marketing efforts become more efficient as they build rapport with underwriters and loss prevention staff and make valuable contacts in the industries that make up their primary markets.

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Benefits for the Client

A purchasing group member is entitled to a premium discount which is based on an estimate of the group's entire written premium. For example, if a group is projected to generate $500,000 in annual premium, all policyholders in the group will receive the premium discount applied to the $500,000 premium level (10 percent) regardless of their individual premium size.

Group members also benefit from expert claim and loss prevention services. Texas Mutual Insurance Company will assign a loss prevention consultant who is or becomes an expert in the group's common operations. A safety plan is developed for the group and adopted by all members. The loss prevention consultant may speak at the group's association meetings or in other group settings.

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Getting Started

Some agents begin by becoming involved with a professional association. Others start by developing their contacts in an area of their own professional expertise. As a list of potential clients develops, agents should watch for changes in regulatory requirements that affect the industries they are targeting. Insurance coverage is sometimes a sound way to address the uncertainties created by regulatory changes.

Most industries would benefit more from a structured loss prevention program. Make some calculations and work with a group representative as you research the group. Together, you can review the numbers and determine the benefits that group coverage offers. We require a minimum of $500,000 in annual premium to justify writing a group program. We take into consideration the estimated average premium of group members and the growth potential of the group in subsequent years if the initial premium is below this amount.

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Open Groups vs. Exclusive Groups

In an open group, any agent can work with a client and submit the account to Texas Mutual Insurance Company, identifying it as a purchasing group account on the application. When agents submit an account for coverage with an open group, the writing agent receives the standard commission, and the client gets the group discount and potentially a group dividend.*

In exclusive groups, only the agent who creates the exclusive group may write business for that group.

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Questions About Group Purchase Plans

Your regional marketing representative or purchasing group coordinator can answer your questions, provide a group purchase application and help you set up your group. For more information, call the Information Services Center at (800) 859-5995.

*NOTE: State law prohibits insurance companies from guaranteeing dividends in their promotional materials. Past dividends are not a guarantee of future dividends, and the Texas Department of Insurance must approve all dividend plans.

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Texas Mutual^® is a registered service mark of Texas Mutual Insurance Company.