General Manager's Report 2018

To our nearly 28,000 Policyholder Members of PEI Mutual it has been a great privilege to work with our personnel who continually dedicate themselves to provide you with exceptional service. We have 16 Service Agents who live and work in the communities they serve. Our Staff of 31 serve our policyholders and support our field Service Agents from head office in Summerside. Our Board of Directors sets policy on behalf of our Members and is comprised of 9 people from across Prince Edward Island who each have experience in the Island’s Primary Industries.

2018 Financial Experience

In 2018 claims activity increased by 54% as compared to the prior 10 year average. This was primarily due to successive weather events toward the latter part of the year. We were pleased to be able to help many families who suffered losses during these times. While our expenses remained relatively stable the increased claims costs resulted in an underwriting loss by year end.

The Company’s surplus is maintained to meet commitments to our policyholder / members. Investments are managed prudently to preserve capital while maximizing income. At year end 82% of our investments were held in secure fixed income products while the balance 18% was held in common stocks issued by companies with positive longer term outlooks.

Effective January 2018 we adopted a new financial reporting standard (IFRS 9) bringing greater clarity to the evaluation of our Investment Portfolio. We no longer apply judgement on the permanent impairment of equities at year end. The change in values as at December 31st are now reflected directly in net income. Market volatility at the end of year is reflected in our 2018 investment income. We continue to see a longer term trend toward low yields in the fixed income markets.

Mutual Rebate

We strive to offer our Members affordable products that reflect the cost of providing insurance services. As part of our fair pricing policies our Board of Directors annually assesses the Company’s ability to provide a Mutual Rebate to its Members. We are pleased to advise that following the 2018 financial results our Board of Directors has approved a Mutual Rebate that will represent a 10% reduction of renewal premiums effective May 1, 2019 to April 30, 2020.

Strategic Planning

Our Board of Directors approved a Strategic Planning initiative to set our course for the next 3 years. The planning process was completed in September 2018 after engaging with our Staff, Agents and Directors.

As part of the planning process we developed our first Vision, Mission and Values Statements. These can be found on our website. Five strategic priorities emerged from the process focusing on Responsiveness to our Members, Our People and Culture, Technology, Processes and Efficiencies, Visibility in the Community and Stewardship.

I am pleased to say that our personnel are focused and engaged in making good progress on the many initiatives that will serve the Company well.

In closing I would like to say thank you to our Board of Directors lead by Chair Claude Dorgan, our Chief Financial Officer Rudy Smith, our Staff and Agents who are all dedicated to member service and the long term prosperity of the Company. Most importantly I thank you, our Members, who have chosen PEI Mutual to be your insurance provider.


Blair Campbell,

CEO / General Manager