It has been a great year and an enjoyable privilege to serve as President of our successful Mutual Insurance Company.

Our Company continued to grow at a steady rate of more than six and a half per cent, and there is more good news. Our claims were down by 11 percent or more than a million dollars from 2008. We are pleased to say that this has created a financial climate whereby we are able to provide a 10% special Mutual rebate to you our Policyholders, who are owners of this Company. This is in addition to the regular Mutual rebate which is 10% this year. This rebate was initiated in 1983 and to date has totaled $22,500,000 to you the policyholders.

In December 2009, PEI Mutual hired its 14th agent. Kendall Docherty will be working in an area east of Charlottetown. Welcome to the PEI Mutual team Kendall.

This successful year at PEI Mutual had many contributing factors. Some of these were: less destructive weather and fewer oil spills. For these reasons along with the efficient and professional work of our dedicated Staff, Agents, the Management team and fellow Directors this has been a year we can be proud of and thankful for.

Thank you all for your hard work.

Stewart MacRae,

President