Manager's Report 2014
PEI Mutual is on the edge of an exciting and historical event with the construction of our new office building at 116 Walker Avenue in Summerside. Our historical documents indicate that the head office of our company has been at its present location since the company first opened its doors 130 years ago. It will be sad to leave our current location but exciting to move and start a new chapter in the PEI Mutual history. Our new building is a modern, environmentally friendly building that will accommodate PEI Mutual operations for many years to come.
In 2014 we experienced a year of increased claims that can be attributed to bad weather events throughout the year. The following is a brief summary of our results for 2014:
- Good growth in premium and market share.
- Reduction in reinsurance cost due to good claims experience with our reinsurer and increased liability retention.
- Reduction in operating expense ratio.
- Good investment return.
- Significant increase in claims reported resulting in increased claim payments.
- Net income after tax of $1,495,000.
The poor claims experience in 2014 resulted from weather related claims as follows:
- Sewer backup claims totaling $2,980,000 which was 23% of total claims for 2014. On average for the last 10 years, sewer backup represented 7% of total claims. Sewer backup claims have been increasing in number in the past five years. In July 2014, we increased the rates for sewer backup and made underwriting requirements more stringent.
- Windstorm claims totaling $1,473,000 which was 11% of total claims for 2014. On average for the last 10 years, windstorm represented 7% of total claims.
In 2014, we had two long standing agents retire from our company. Peter Johnston from Kinlock provided 38 years of service and David MacAdam from Morell provide 30 years of service. I express my gratitude to both Peter and David for their dedication to the company. In November 2014, we hired John Flood, Jill Abbott and Jeff Trainor to look after the insurance needs of the PEI Mutual policyholders in the areas that were serviced by Peter and David. Everyone at PEI Mutual wishes Peter and David a wonderful retirement and is pleased to welcome John, Jill and Jeff to the PEI Mutual team.
The PEI Mutual staff, agents and directors were pleased to receive two awards in 2014:
- In October 2014, we were awarded the Summerside Chamber of Commerce Business Excellence Award.
- Also, in October 2014, PEI Mutual was recognized as recipient of the prestigious award "A Top 101 Company in Atlantic Canada" as sponsored by Progress Corp. PEI Mutual has received this award for each of the past 17 years.
Policyholders of PEI Mutual benefit by sharing in the Company profits through a "Mutual Rebate" which is given in years when the Company has good financial results. I am pleased to advise that our Board of Directors have approved a "Mutual Rebate" of approximately $2,200,000 (10%) in 2015. This year's "Mutual Rebate" will be given as a discount at time of renewal.
PEI Mutual is a 130 year old Island company with its Head Office located in Summerside, PEI. Decisions are made promptly on PEI. We are in the business of providing service to our policyholders and it's our goal to give excellent service in an efficient manner. I thank our agents and staff for their hard work in achieving this goal.
Thank you for choosing PEI Mutual as your insurance provider.
General Manager / CEO