President's Report 2003

Wow, what a year! 2003 started out very well for PEI Mutual, however in the early fall we were hit with a number of large claims, including the catastrophe of Hurricane Juan, all of which had a significant impact on our bottom line. Even so, I am proud to say that our Company was in a position whereby we were able to handle these claims and still finish with a very respectful net profit for the year.

I would like to make special mention of PEI Mutual’s claim’s department and claim’s adjusters for the extra effort that they put forward as a result of Hurricane Juan. Many extra hours were required to properly service our customer base during this time and my sincere thanks goes out to all those who worked so hard on behalf of the Company during this time.

PEI Mutual’s investment portfolio continued to perform well this year and I would like to thank our investment team for successfully managing this portfolio in the midst of the challenging market conditions that continued to prevail over the past year.

The agents and staff of PEI Mutual have continued to provide exceptional service to our customer base throughout the year. I recognize that it is through these people that our customers judge the quality of our insurance product and service, and I would like to personally thank all of the agents and staff for their continued hard work and dedication to our Company. Also, with the retirement of our agent Wayne Newson this year, I would like to welcome PEI Mutual’s newest service agent, Sandra MacDonald, who resides with her family in Crapaud, PEI.

PEI Mutual has continued to work hard at reducing and preventing oil escape losses during the past year. Protecting our environment and reducing expensive clean up procedures have been our main focus of attention. We appreciate our policyholders’ response in working with us to achieve these goals.

Once again, this has been a very rewarding, yet challenging year for myself and the rest of the Board of Directors. Along with the regular challenges of successfully operating in the insurance industry, there was the additional challenge of Hurricane Juan this year. I would like to thank my fellow Board members for their hard work and support throughout this past year and I would also like to offer my best wishes to Claude Dorgan, this year’s incoming President.

Allison Johnson,