Policyholders of Jewelers Mutual Insurance will get $5.1 million in dividends by Aug. 31, subject to regulatory approval. It’s the largest dividend dollar amount in the company’s 91-year history. JMI, headquartered in Neenah, Wis., is the only U.S. insurer specializing in jewelry and jewelers, and also the nation’s largest jewelry insurer.

Policyholders insured since June 30, 2003, or earlier will get a dividend equal to 8% of their current premium. Those insured since July 1, 2003, will receive 4%. Those with a commercial policy effective June 30, 2004, also will get a dividend.

The dividend is due to JMI’s exceeding its business growth expectations in 2003, reducing expenses, and a reduction in policyholders’ frequency of losses, says Ron Harder, president and chief executive officer of Jewelers Mutual.

JMI dividends aren’t automatic. Each year, its board of directors—most of whom own jewelry businesses and are policyholders—determine whether they can return dividends to policyholders, based on specific financial criteria. “As a mutual company, we’re owned by our policyholders,” explains Harder. “So, board members have a responsibility to the financial success of the company and to serve the best interests of policyholders.” During the last 15 years, JMI has returned about $20 million in dividends to policyholders. The last distribution—in 2000—totaled $3.8 million. The newest dividend was approved earlier this year at the board of directors meeting.

Jewelers Mutual insures close to 40% of the U.S. jewelry industry—about 10,000 businesses (retailers, wholesalers, manufacturers, appraisers, other jewelry-related businesses)—and more than 120,000 individuals’ jewelry, worth more than $1 billion. It remains a mutual company (owned by its policyholders) as it was when founded in 1913, with jewelry trade leaders making up most of its board of directors—the only insurer with such a ratio. The company is licensed in all 50 states, represented by 350 insurance agencies and more than 500 independent agents.