John Leonard plans to retire after nearly a quarter century of leading The MEMIC Group, the public-private partnership that is credited with helping reduce Maine worker injuries by the thousands while saving the state’s employers millions of dollars.
When Leonard was recruited to help start the company in 1993, Maine had some of the highest workers’ compensation insurance rates in the country, a reflection of rampant injuries, especially in the logging and fishing industries. Insurers refused to provide workers’ comp coverage, a situation that threatened to cripple the state’s economy.
Those dire circumstances gave rise to the Maine Employers’ Mutual Insurance Co., now called MEMIC, a public-private partnership that sought to reduce worker injuries and provide guaranteed coverage to Maine employers. Under Leonard’s direction, MEMIC has evolved into a company with assets of more than $1.2 billion and offices from Maine to Florida. It also became the model for many other states, with its focus on requiring employers to meet strict safety standards to reduce costs and keep worker injuries at a minimum.
Sen. Angus King, who was Maine’s governor in MEMIC’s early days, said that although MEMIC was created by state statute in response to the workers’ comp crisis, it was Leonard’s execution of that idea that has made it such a success.
“It’s been one of the great success stories in Maine’s history,” King said in a phone interview Wednesday. “John has as much to do with the growth of the Maine economy as any other single person in the past 25 years.”
Sen. Susan Collins also credited Leonard for his help in the struggle to save Maine’s workers’ comp insurance market from an impending collapse.
“Employers faced sky-high premiums they could not afford, while workers faced injury rates far above the national average,” Collins said in an email. “Right away, John and his team at MEMIC set out to improve workplace safety and reduce premiums. Under John’s leadership, MEMIC has far exceeded its goals, helping to make a safer, fairer and more affordable workplace a reality for employers and employees across Maine.”
MEMIC, led by its original parent company, the Maine Employers’ Mutual Insurance Co., now provides workers’ comp insurance to more than 21,000 employers on the East Coast, maintains a surplus of more than $400 million, and has returned more than $220 million to policyholders since 1998, according to a news release about Leonard’s retirement plans.
‘John has as much to do with the growth of the Maine economy as any other single person in the past 25 years.’
— U.S. Sen. Angus King
Leonard, who has been MEMIC’s only president and CEO, said in the release that he intends to retire in September 2017. The company’s board has formed a search committee to look for his replacement.
“The establishment and success of MEMIC has been a labor of love,” Leonard said in the release. “I am so proud of this company, of its people, and of its mission to reduce injuries. The early days were really difficult, but we all believed in the mission. We worked together with policyholders and workers to truly change Maine’s culture of workplace injuries to a culture of workplace safety.”
The company has been instrumental in significantly reducing workplace injuries and their associated costs in Maine, state officials said.
After an exodus of insurers during the unsettled time before workers’ comp reform was passed in Maine, MEMIC was established in 1992 by state statute as the guaranteed market for workers’ compensation. It is a private mutual insurance company, with its initial funding coming entirely through loans and insurance premiums.
By 1998, the company had managed to reduce lost-time injuries of Maine workers by 30 percent and lowered workers’ comp insurance costs by 40 percent.
Maine Superintendent of Insurance Eric Cioppa said Leonard, along with MEMIC’s board of directors, succeeded in continuing to lower the cost of workers’ comp insurance by as much as 50 percent while dramatically reducing workplace injuries.
“MEMIC can terminate an employer for failure to comply with safety regulations, and they take it very seriously,” he said.
Cioppa said Leonard led MEMIC at a time when Maine had what was one of the most dysfunctional workers’ comp markets in the country. Together with the board, Leonard created the prototype for how to handle workers’ comp insurance correctly, he said.
“It’s one thing to create a company by statute, but it’s an entirely different thing to run it the way MEMIC has been run,” he said. “It literally became a model that many other states have adopted.”
Leonard said in a phone interview that after retiring he plans to remain involved as an expert on workers’ comp through participation in various boards of directors. Even while at MEMIC, he has assisted other states, such as Hawaii, Kentucky and Missouri, in creating their own versions of the company.
He also plans to spend more time cheering on his six grandchildren, all of whom are accomplished athletes, Leonard said.
One of Leonard’s remaining goals is to make workers’ comp insurance essentially free in Maine. Member companies who belong to MEMIC and are successful in lowering injury rates are awarded dividends. Leonard envisions a time when the dividends paid out to employers could ultimately fully offset their costs, a goal he believes his successor can achieve.
Above all, Leonard said his proudest accomplishment is that thousands of workers have avoided injury because of his company’s efforts.
“Every day there are people who go home each night, safe, because of the efforts spearheaded by MEMIC,” he said. “I am immensely proud of that.”
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