Commentary On 2012 Results

At this time last year we reported on the turbulent pattern of weather activity that impacted our 2011 results.  What a difference a year makes! We had no major weather events through the third quarter of the year and were expecting the year to be one of our best from an underwriting standpoint.  “Super Storm Sandy” struck the northeast coast with a vengeance in late October, and we were once again reminded that our business continues to be susceptible to the vagaries of weather conditions.  Nearly all of our claims from that occurrence were settled by the end of the year and the steps we took last year to improve responsiveness and effectiveness in our claims processes proved to be very beneficial.

Multiple factors contributed to our achieving an excellent combined ratio of 98.8%.  Personal lines of insurance have inherent profitability challenges driven by competitive pricing, underwriting expenses and the type of events noted above.  Patrons Oxford, our Maine subsidiary, had one of its best years and was a solid contributor to our success.  Commercial insurance has been our fastest growing business segment and a significant component of our profitability.  Investments we have made in products and technology to support our agency business partners places us in a position to build on that momentum in the coming years.  Several years ago we embarked on a strategy to develop an assumed book of reinsurance business to augment our standard business model.  That decision resulted in a positive contribution to the Group’s 2012 result.

In addition to the combined ratio being in “positive” territory we are pleased to report that Policyholder Surplus stands at $798 million and remains more than two and one half times greater than our net written premium of $295 million.  Assets remain above the billion dollar level.  We are quite proud of this profile of financial stability as well as the continuation of our A+ rating from A. M. Best.

Continuous improvement in our business processes is an ongoing focus for us.  In addition to assuring essential claim services, we’ve improved agency connectivity, introduced New England Mutual as an active underwriting company in our Group, and welcomed a new president, Mark Pettingill, to our Maine office.  Recently we introduced “Insured Access”, an on line portal for policyholders to access their account information providing an additional level of customer service.  We look forward to expanding the functionality of this site over the coming years.

Our employees voted us as one of the “Top Places to Work” once again and, along with our agents and business partners we are appreciative and grateful for their contributions to our success.

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Are you from Maine? Check out Patrons Oxford, our Maine subsidiary: www.patrons.com