Federated Rural Electric Insurance Exchange

Make safety a core value

About Federated

​On July 20, 1957, the Insurance Commissioner for the State of Wisconsin issued an insurance license to Federated Rural Electric Insurance Corporation. It had taken more than four years of meetings, planning and research by members of the Wisconsin Electric Cooperative (WEC) Job Training and Safety Committee. But at last they had set up an entity that allowed them to insure only electric cooperatives and start reaping the benefits of their excellent safety records. Since then, Federated has become what our founders envisioned: a steady presence in the market, offering insurance for rural electric and telephone cooperatives, with participation by our member-owners in company margins.


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How We Do Business

We’re different from other insurance carriers. Federated is an insurance exchange, with a structure that’s very similar to a cooperative. The Seven Cooperative Principles guide our operations. Co-ops insured with us are members who participate directly in our operations by electing our Board of Directors.

We don’t work through agents or brokers. Our account executives are Federated employees. Their responsibility is to explain your coverage, help you minimize your exposure to risk and be sure you have the right coverage. They’re familiar with your challenges because many of them were employed by cooperatives before working at Federated. All claims and administration are handled at our office, by Federated personnel – people who know you and understand cooperatives.

We focus on providing services at an affordable cost to our members. Our goal is to operate with a combined loss and expense ratio of 100 percent. In other words, we aim to collect enough in premiums to pay claims and our administrative expenses, which historically are about 13-14 percent. Operating on a break-even basis from our underwriting operations allows our investment income to take care of unexpected events or unforeseen circumstances. If nothing out of the ordinary happens, then the investment income is returned to our members in the form of patronage capital.

Our investment strategy focuses on the long term. We use our surplus growth as a cushion against the unforeseeable – a high number of claims due to natural disasters, for example – so we don’t have to overreact and increase pricing dramatically.

For more information, contact memberinfo@federatedrural.com​​​​​​.

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