In 2009 the soft market trend and low return on investments was a concern. However in 2010 this slowly turned around. Gross Premiums have increased to 4.65% in 2010 as compared to 2.9% in 2009. Regarding investments to date, we are very satisfied with the results obtained with our new Investment Manager Phillips, Hager and North. In addition to having quarterly Investment Committee Meetings to review results we have also hired the services of an Investment Monitoring service which provides information regarding our managers results compared to an industry benchmark result. The results have been favorable to date. It is still a challenge to gain new business however; the new policies taken are good to excellent risks. The challenge remains with the competition we face with combined auto/property rates offered by other insurers as well as reinsurance rate and retention increases.
Our emphasis in the next year will not be necessarily to gain a significant amount of new policies but to focus on existing policy reviews and inspections. A significant percent of new business is cyclical with the policyholder following the lowest rate. Concentration on existing clients for reviews provides an excellent source of increased premium income. These clients have shown company loyalty and proven to be good underwriting risks.
The financial results for 2010 and 2009 are a strong indication that changes have to be implemented. The Company views these changes as an opportunity to review existing operating practices and revise them to better meet the operational needs of today. The transitions to date have been challenging but successful. Rate increases, a renewed look at underwriting and commission structure have either been implemented or are to be reviewed in 2011. Rate increases occur due to a number of reasons including the cost of doing business, payment of small weather related claims, last year’s implementation of N.S. premium tax and an F.M.R.P. $50.00 oil tank surcharge. Premium increases are always implemented cautiously. A claims free discount has been approved to encourage clients to consider the impact of submitting a small claim as well as rewarding a claims free history.
Last year and continuing for the next few years the Company is in the process of complying with new accounting standards called International Financial Reporting Standards. The Nova Scotia Mutuals have come together and are cost sharing with the hiring of a Professional Chartered Accountant, who is specializing in this area.
The Company has faced significant staff changes in the last year beginning with the retirement of the President, Diane Belliveau on December 31st, 2010 after 27 years of service. Because of Diane, we inherit a financially stable Company and a great team of dedicated Agents and Staff. Congratulations to our new President, Janice Belliveau. During the year we hired an Administrative Assistant, Helen Comeau and an Office Underwriter, Matthieu Boudreau.
The Company will continue to give financial support to various organizations that are important to the people in the communities where we do business. Education in the form of courses and seminars will be offered as requested or as they become available through various channels. The inspection process for our company will have to be reviewed in order to produce more inspections through a more cost efficient means. These items and many more will be discussed at our Strategic Planning Session scheduled for April 15th and 16th of this year. All Directors, Agents and Staff are welcomed.
I would like to extend thanks and appreciation to the Agents, Staff and the Board of Directors for their continued support and interest in the Company and happy 75th Anniversary.
Henry Thibodeau
Chairman of the Board of Directors
March 8th, 2011
