The economic crisis has had far ranging implications for businesses, individuals and families over the past two years. As financial markets recovered we were encouraged to see the Policyholder Surplus of the Quincy Mutual Group return to a healthy $710 million to support premium writings of $278 million and assets remain in excess of $1 billion. Profitability is measured by a combined ratio of 102.3% reflecting losses and expenses as a percentage of premium. Significant industry competition and wide-ranging economic conditions contributed to this result. Despite the travails encountered by the industry we are honored that the A.M. Best Company has once again reaffirmed our A+ rating.

We made a strategic decision to cease writing business in New Jersey and in the process secured a business partner, the Franklin Mutual Insurance Company. Franklin will assume most of our NJ policies while offering us a quota share agreement on all of its business. From an Enterprise Risk Management standpoint we further reduced our exposure to catastrophic loss through a renewal rights agreement with the Narragansett Bay Insurance Company on our RI personal property business.

For the third consecutive year, the longest stretch in history, the property and casualty industry witnessed a premium decline. To respond to our own declining premium and position the Group for future growth, we are pursuing an aggressive strategy to improve commercial lines products and delivery capabilities to become a more valuable resource to our independent agency partners. Our advances in “ease of doing business” technologies will also help to grow our personal auto business written as a companion policy to our homeowners accounts. Expanding that capability through our underwriting alliance with The Andover Companies is another step in establishing strategies today for a brighter tomorrow.

Our Maine subsidiary, Patrons Oxford, had a profitable year with a combined ratio of 99%. Once again we congratulate them on receiving ‘Company of the Year’ honors from their state’s agents.

The changes we initiated this past year reinforce our belief that enhancing policyholder surplus, providing diversified and competitively priced products, delivering high quality policyholder services and responding to our agent partners all make for good business. While change can be challenging, it also presents opportunities for each of us to find new ways to make our companies even better. We appreciate the efforts of our employees, agents and partners who contribute to our continuing progress and success.