In the 1800's fire was one of the greatest threats to human financial and
emotional welfare. Insurance to protect against the peril was
unavailable or often beyond the financial means of average people. Fire
meant economic and human disaster!! It was during this period that groups
of citizens banded together in the first basic mutual fire protection groups.
On April 15th , 1895 property owners from the towns of Albany,
Avon, Krain and Oak met in the Albany village hall for the purpose
of organizing a mutual fire insurance company. The meeting was successful
and a company was formed. The first board of directors was elected
with Jacob Krebs as president, John Loehlein as treasurer and John
Schwinghammer as secretary. An additional board member was elected
from each town to act as agent to policyholders.
That year the fledgling company wrote over 150 policies at a premium rate
of 10¢ per $100 of insurance. At last citizens homes and barns were protected
from complete financial loss due to fire. But of course it was not just homes,
but hay and grain, livestock, machines, horse harnesses and all manner of possessions
were covered. The stark possibility of bankruptcy caused by fire loss was staved
The mode of business was simple. Once the initial premium was collected the insurance was paid for as long as the company had enough funds to cover losses. But the problem with this became immediately apparent. The company was short of the $150 to pay for a house that burned in the first year, so an assessment was made on policyholders. The difficulty with this procedure was that policyholders might have difficulty paying the unexpected expense. Nevertheless, the procedure stayed in effect until 1977 when an annual premium was adopted. The annual premium allowed the company to build a surplus to help pay large claims and reduced the probability of assessments.
In 1969 the mutual purchased reinsurance from the Reinsurance Association of Minnesota (now known as Ram Mutual Insurance Company) that paid claims beyond a set maximum. This service allowed the company to protect itself from extremely large losses, a procedure followed today.
As the mutual insurance industry matured, additional
perils were covered, such as: collapse, theft, collision, vandalism,
water damage and others. And in 1985 Albany Mutual began packaging
policies with statewide windstorm and liability insurers. This eliminated
the need for policyholders to purchase two policies from two sources.
From a small beginning, Albany Mutual has grown to a company that serves over 1402 policyholders. Fourteen affiliated agencies that provide a broad range of insurance services bring our product to nine counties in Central Minnesota. We are strong in terms of service and financial stability and we anticipate continued growth in policy numbers, service area and agent services.