As conversations went on, it became clear that finding the significant capital to meet GuideOne’s needs would be difficult. Like many Midwest mutuals, GuideOne experienced a drop in surplus in the early 2020s driven by rising loss costs and an increase in claims severity.

By 2022, the company’s options were either taking on additional debt or securing more reinsurance, said Ken Cadematori, CEO of GuideOne.

That is until a GuideOne board member brought up a new idea. Bain Capital Insurance was closing in on an inaugural insurance fund of more than $1 billion. Chuck Chamness, a senior advisor for Bain’s insurance portfolio, was a former president of the National Association of Mutual Insurance Companies (NAMIC) who understood the struggles that companies like GuideOne go through to secure funding.

Why not see if Bain would be interested in investing some of its insurance capital into this 78-year-old Des Moines-based mutual?

Initial conversations between Bain and GuideOne left the mutual company’s leaders intrigued but also wary of what the undertaking would mean for their policyholders, according to Cadematori.

“It was probably bigger than we were anticipating and very much a transformational change that we didn’t think we necessarily needed to undergo at that point in time,” said Cadematori “But it did get us thinking.”

As GuideOne leaders pondered their next steps, time was running short for the company to secure funding.