CEO's Report 2023
2023 was year in which PEI Mutual continued to work through many challenges presented in the aftermath of Hurricane Fiona. Our team performed exceptionally, and we strategically built our capacity, adding key members and expanding our leadership team in order to better serve our members and support our people. Through resiliency, we upheld our commitment to providing outstanding service and did our best to meet the expectations of our policyholders, keeping their needs at the forefront during challenging times.
PEI Mutual continues to lead the market in responsiveness and accessibility of our team. Our goal of offering quality products at competitive prices remains strong and we are proud to be known as the insurance provider of choice on PEI. We are committed to innovation and will continue to look for ways we can improve for the future.
Financially, the company had another great year in 2023. Premiums written were up by $3.4 million over the previous year and our Mutual membership continued to grow as we added 774 net-new policies during the year.
Claims experience returned to an average level in terms of total losses of around 1100, which is in line with what we have come to expect in years previous. This is a relief following the significant impact of Hurricane Fiona in 2022. Gross Losses incurred, however, remained above average, at $48 million, much of which can be attributed to new and maturing Hurricane Fiona claims, as well as several major fire losses in 2023. We have seen a significant increase in reinsurance rates in 2023, which will carry an impact on profitability in future years.
Investment return was favorable, with a profit of $4.5 million. Although the financial markets generally did not perform well during 2023, PEI Mutual did achieve a positive return on both our equities (6.01%) and bonds (4.35%).
Together with an underwriting profit of $3.5 million and investment profit of $4.5 million, the company achieved a net income after tax of $6.1 million. These profits have been added to the Members' surplus which now sits at $84.9 million, an exceptionally strong position as at December 31, 2023.
As a Mutual company, PEI Mutual aims to provide value to our members through competitive pricing and offering rebates based on the financial results of the current fiscal year. Following another strong year in 2023, our Board of Directors has declared that the current 18% mutual rebate will remain effective and be applied to policy renewal premiums through April 30, 2025.
We take pride in giving back to our Island communities through partnerships, community support and volunteerism. In 2023, we were fortunate to be able to support more than 200 organizations and causes across PEI, delivering more than $300,000 to community initiatives.
Some highlights for the year would include our major commitment as a Champion sponsor of the 2023 Canada Games, as well as an exciting new partnership with the PEI School Athletic Association. Our PEI Mutual Education Trust also awarded 20 scholarships to deserving Island graduates in 2023. We are an active member of all 5 Island Chambers of Commerce and take pride in celebrating and supporting Small Business across PEI.
In 2022, we embarked on the journey of a build and customization project for a new cloud-based Enterprise Resource Planning (ERP) system. This has been a monumental undertaking, now more than 2 years in the making, and will revitalize the way we do business. It is undoubtedly the most significant technological evolution in our company's history. We are excited to see the project through to completion with our organization-wide adoption scheduled for the Spring of 2024.
In addition to the ERP System, PEI Mutual has made a commitment to digital transformation, embracing a number of technology-related initiatives, such as hardware and infrastructure upgrades, security enhancements, use of additional software tools, and creating supports for remote/hybrid workers. This transition will bring many opportunities to enhance the way we serve our members into the future, as well as the potential for creating efficiency in our operations by leveraging the data and real-time access to information. This will also allow for us to modernize operational processes, and improve the speed of service to policyholders.
In closing, I would like to say thank you to all of our valued members across Prince Edward Island, who place their trust in us, and help to make us the insurance provider of choice on PEI.
I would also like to thank our incredible team who have worked hard to support each other in serving your insurance needs over the past 12 months. Our people really are at the heart of our success, and I continue to be inspired by their unrelenting commitment to service.
Finally, I would like to thank the Board of Directors for their support in my role as CEO, and helping to steer the company through a period of significant change and transition, as we position ourselves for the future.
We look forward to serving our policyholders in 2024, with our focus on striving to be the best place to work, the insurance provider of choice, and making the most impact in our communities.
Sincerely,
Craig Noonan,
CEO