Richmond Farmers Mutual merges with Lisbon company

RICHMOND – What was the Richmond Farmers’ Mutual Insurance Co. founded more than 100 years ago no longer exists, but its redefined presence will continue to provide the established clientele base with the same service while welcoming new accounts.

Incorporated on Feb. 21, 1894, the Richmond Farmers’ Mutual Insurance Co. merged with the Lisbon-based Sandy and Beaver Valley Farmers’ Mutual Insurance Co. effective Jan. 1, according to Phil Flenniken, who was the agent with Richmond Farmers’ Mutual Insurance Co. and continues now as the agent for the new Richmond Farmers Insurance Agency.

The merger creates the Richmond Farmers Insurance Agency, Flenniken said.

“Sandy and Beaver is a mutual insurance company, too, with multiple agencies underneath it,” Flenniken explained. “Sandy and Beaver has multiple agencies, so Richmond Farmers Insurance Agency will be one of those agencies as part of the agreement of the merger,” he said.

“Richmond Farmers Insurance Agency was able to retain the clientele and will service that clientele out of the same location, but it is an agency now underneath Sandy and Beaver,” he said.

The Richmond office will maintain a presence at 110 S. Walnut St. with office hours from 9 a.m. to 5 p.m. weekdays. The phone number is (740) 765-4351.

The Richmond agency which deals strictly in real estate insurance and contents has a clientele of about 150 policyholders.

A banquet held Jan. 10 at St. Florian Hall in Wintersville and hosted by Sandy and Beaver was occasion for reminiscing and honoring the service of past and present officers and board of directors members.

“The company was originally formed to service the farmers around here,” Flenniken began the overview of its history.

It was 1894 when a call was issued in Jefferson County to the farmers of Island Creek, Salem, Ross and Springfield townships to consider their interests in insurance and the wisdom of organizing a group for

mutual insurance, a group where the farmers would take care of their own.

Records for the year ending 1895 showed the company to have assets of $10.35 with the amount of insurance in force listed as $288.33. The year 1896 brought the first claim filed with the company, a fire loss at the Ross Township home of Aaron Wiles. Itemized, the $10 claim covered $1.50 in lumber and shingles; $3 for carpenter labor for a day and a half; $2 to haul lumber and shingles; $1 for paint and painting; and $2.50 for “lifting and washing carpet in three rooms.”

Despite that first claim, 1896 was still considered a “very prosperous” year for the company that underwent changes through the years, including the dropping of “Fire” from its name between 1912 and 1913. It also would broaden its base from what started as a wind and fire insurance company and a heavily farm-oriented group in the days when agriculture was “the” big business in Jefferson County.

The original charter for the association enabled it to insure buildings, crops, the contents of buildings and cattle. The total amount of insurance that could be written on a farm was $35,000, regardless of its size.

In 1979, the company reorganized, joined the Reinsurance Bureau and was able to insure everything that any other company could insure except cars, given it was a mutual.

The board that oversaw the company met four times annually, its last gathering being the annual meeting of policyholders.

On the occasion of its centennial in 1994, Robert C. Scott, who has 30 years of continuous service as a board member, had explained, “The unique thing about a mutual is that you use the insurance and then six months later you pay for it because the cost is calculated on what it costs to operate the company.”

“Nobody paid anything until there was a loss,” Flenniken said, “and then when there was a loss, they all formed together and divvied it up, and that’s how it was paid, and that’s what a mutual company always did. Their premiums were always collected in arrears, so our premiums continued to be billed that way until just the last three or four years to where then we could advance bill on things,” he said.

“Now it hasn’t been divvied up for years,” Flenniken continued. “There’s always been “it looks like this is what it’s going to take to operate,” and we charge so much, and when it got to where there were large losses, where there would be a large loss and you didn’t have enough money in reserve, you’d go to the bank and borrow it, pay the loss and then you adjust your premiums or wait until you caught back up to yourself,” he said.

“In 1979 Richmond purchased reinsurance, and that’s about when reinsurance became available, so now Richmond Farmers can buy insurance themselves so that if a loss exceeds what we’re financially capable of paying, then the reinsurance company pays it, so the way our reinsurance works at the present time is whatever we have insured, if we have a fire there, let’s say we have a $100,000 or $200,000 house, and it’s a complete loss, we take $25,000 out of our funds and the balance of that comes from the reinsurance company, and if those losses exceed $50,000 over the course of a year, then it comes out of the reinsurance so we have reserved built up then to where we can pay those losses and then if it exceeds that, we turn again to our insurance and they pay it then,” Flenniken said.

“So that is how small companies like ours have existed so long,” Flenniken continued, noting the state of Ohio “hasn’t been very nice to small companies.” During the late 1980s there were as many as 58 mutual insurance companies.

Today there are 16 or 17, according to Flenniken.

The reinsurance costs the company $3,000 a month, “so that’s $36,000 a year that we pay for insurance to cover our possible losses there. As those expenses continue to mount, it becomes tougher,” he said.

The January banquet acknowledged the merger, honored its leaders, gave members an opportunity to talk about their experiences and gave the estimated 30 in attendance a chance to check out memorabilia.

That included a display of minutes from the first meeting of the board of directors commencing Feb. 17, 1894, to Jan. 12, 2012, and a copy of the first policy issued to William Welday in March 1895.

Banquet honorees included:

Corporate secretaries: Carolyn Brown, Dec. 6, 1968, to Dec. 31, 1985; Odessa Pethtel, Dec. 5, 1985, to Dec. 5, 1991; Shirley Newburn, Oct. 6, 1994, to Jan. 1, 2009; Valerie Stine, from Oct. 14, 2008, to Jan. 12, 2009; and Linda C. Vince, Jan. 12, 2009, to Dec. 31, 2013.

Treasurer and agent: Phil Flenniken, May 21, 2004, to Dec. 31, 2013.

Vice president and director: Richard Baker, Oct. 2, 1986, to Dec. 31, 2013.

President and director: Raymond Piergallini, April 4, 1986, to Dec. 31, 2013.

Remaining directors: James W. Newburn Sr., who also served as an agent and adjustor, Dec. 1, 1966, to Dec. 31, 2013; Brad Cain, April 6, 1995, to Dec. 31, 2013; Dr. David Robinson, Oct. 12, 2010, to Dec. 31, 2013; and Robert C. Scott, who also served as an adjustor and treasurer, Dec. 12, 1984, to Dec. 31, 2013.

Legal counsel: Larry Piergallini, Jan. 7, 1984, to Dec. 31, 2013.

James W. Newburn Jr. served as an agent from Jan. 8, 1998, to Jan. 15, 2008, and Ron Wiley served as an adjustor from April 13, 2010, to Dec. 31, 2013.

Flenniken reiterated that while the company no longer exists, the service continues.

“That’s kind of what we’ve told people – they’re not going to notice much of a difference in their policy unless they want to change it, that Sandy and Beaver has accepted our policies for what they are,” Flenniken said.

“The biggest thing it means is that a company over a hundred years old is no longer there, but those clients (of it) will continue to receive the same service, continued service,” Flenniken said.