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Ready to meet
the challenges before us
What a difference a year can make. Or maybe
I should say, “What a difference nine months
can make”.
As bad as 2008 was for the insurance
industry, 2009 didn’t start out
much better. However, after the first
quarter we made significant strides in
underwriting results and investment returns.
Direct written premium increased 3.3%, going
from $146.5 million to $151.4 million, an
all-time high for the company.
Incurred losses decreased slightly, going
from $88.3 million to $86.9 million.
One of the company’s biggest concerns is the
net underwriting loss of $4.5 million, which
was led by our two largest lines of business, personal
automobile and homeowners.
The personal automobile line, which is our
largest line, continues to be our biggest
challenge, producing a $7.7 million dollar
underwriting loss. We continue to see an
increase in loss frequency and severity. It
is our opinion that reasonable and prudent
insurance
reform is needed to help reduce these losses
and make personal automobile insurance more
affordable to our policyholders.
The homeowners line, which is our second
largest line, produced a $1.9 million dollar
underwriting loss. The company continues to
experience an increase in losses attributed
to the deterioration of the economy, such as
vacant and foreclosed properties and fraud.
Our loss prevention department is diligent
in looking for ways to prevent and/or
control these types of losses.
Our assets increased over $22 million to
$324 million.
Our reserve for policyholder protection
increased 8.8% or $15.5 million, ending at
$191.9 million.
2009 will be remembered as a difficult year
regarding underwriting results and a better
than average year from our invested assets.
The positive results from a conservative and
consistent philosophy will enable the
company to continue moving forward with its
business objectives without interruption.
In addition, we received notification from
the A.M. Best Company that our A+ rating has
again been affirmed with a stable outlook
for 2010.
2010 will be another year of a challenging
environment both on an underwriting and
investment income basis. External influences
may be just as challenging. We continue to
see significant increases in risk from
legislative, regulatory, judicial and
economic areas.
The management team and all our associates
remain focused and poised to take on the
challenges and opportunities the future
presents.
We are blessed to be affiliated with such a
loyal group of policyholders, strong network
of independent agents and dedicated team of
employees.
We are proud of the protection, services and
financial stability we have provided for
over 100 years to Michigan individuals and
families.
We appreciate your confidence in placing
your insurance with us and do not take it
for granted.
Thank you for your business.
Sincerely,
Kurt P. Foley
President, CEO |
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