Reaching further, going farther 2017 annual report

Transcription

1 Reaching further, going farther 2017 annual report 1

2 2 Executive message Last year was one for the history books. In 2017, Motorists Mutual Insurance Co. and BrickStreet Mutual Insurance Co. were granted approval to affiliate through a joint venture that elevated us to a super-regional carrier ranked in the top 20 mutual companies in the U.S. We are reaching further and going farther together, with a combined 1,400 associates, 10 offices writing business in 28 states and the District of Columbia, premiums of nearly $1.1 billion, a surplus of nearly $1.46 billion and assets of $4.1 billion. BrickStreet is one of the largest writers of workers compensation in the region, and Motorists offers a long-standing reputation and wide range of products. Together, we are even stronger our joint venture allows us to reach more agents and policyholders with expanded product offerings that include the same exceptional service. We have already seen the momentum from our affiliation carry over into our day-to-day business, with cross-selling successes and enhanced field relationships. BrickStreet s agents and policyholders are able to secure other lines of insurance through this partnership, and Motorists can now offer superior workers compensation products for all classes and account sizes. United as one company, we have built a foundation for future success. Our affiliation opens the doors for new niche and specialty products that will better meet the needs of our agents and policyholders. Our mission is to be the most trusted and responsive provider of industry-leading insurance solutions, and 2017 was just the beginning. There is still much work to be done to integrate fully and to roll out our combined offerings in each state. However, our associates have maintained the high level of service our agents and policyholders expect and deserve. Last year, we served more than 70,000 property and casualty customers and handled more than 30 catastrophic events. Our team responded to devastating weather with compassion and quickness, illustrating our commitment to being a business built on trust and accountability. We also handled almost 40,000 workers compensation claims. We are committed to keeping people safe and helping them restore their livelihoods. An important part of our success as one company is choosing the right leadership. TJ Obrokta Jr. now serves as president and chief operating officer of our combined organization, and his leadership and vision have laid the groundwork for our future. As we were coming together as one company, we also moved light-years ahead with our new commercial lines solution, Motorists Insurance, which rolled out to five states in After years of hard work, innovation and commitment from our associates, we now offer superior technology for our agents and policyholders.

3 This industry-leading, high-touch, high-tech model sets us apart in the commercial marketplace. Agents can easily customize policies to fit the unique needs of their policyholders through a state-of-the-art digital portal, and policyholders can view their policy information and claim updates, and make premium payments online. As our rollout expands into more states, we will continue to enhance the platform based on continual feedback from our agents. Our associates have worked tirelessly for the past few years to make Motorists Insurance a reality. This solution truly transforms the way we do business and deepens our partnership with the independent agents who represent us. In addition to the progress we made with Motorists Insurance, we also continued to extend our reach in our specialty lines. Effective January 2018, HM Casualty, our 2016 acquisition, was renamed AlleghenyPoint Insurance. We worked through 2017 to complete policy migration and data conversion, and with this name change, integration is now complete. This acquisition made us the third largest workers compensation provider in Pennsylvania and expands our workers compensation footprint in the region. Through all the changes we experienced in 2017, our commitment to giving back to the communities where we live and work did not change. With The BrickStreet Foundation and Motorists Insurance Group Foundation, as well as countless volunteer hours from our associates, we are making a lasting impact on our communities. Our associates care, get involved and make a difference. As much as we enjoy celebrating our accomplishments, we are even more excited to look ahead. We are confident 2017 was just the beginning of our success as one company. Whether it s through customizing a policy, servicing a claim or building our communities, we are committed to excellence. Together, we will reach further and go farther than ever before. As evident, 2017 was a year of transformation and growth, and we have set the stage for our success as a leading super-regional carrier. This success would not have been possible without the commitment of our boards of directors and senior leadership team, as well as the local knowledge and decision making of our associates and agents. Our priority will always be to continue to provide high-quality products for our policyholders and top-of-theline customer care. Gregory A. Burton Executive Chair, Board of Directors David L. Kaufman Chief Executive Officer 3

4 Senior leadership team Jeff Benintendi Executive Vice President, Workers Compensation & Strategic Accounts Gregory A. Burton Executive Chair, Board of Directors Grady Campbell Executive Vice President, Commercial Lines & Life J. Christopher Howat Executive Vice President & Chief Financial Officer David L. Kaufman Chief Executive Officer John Kessler Senior Vice President & Chief Strategy Officer Teresa King Vice President & Chief Claims Officer Tony Laska Executive Vice President & Chief Information Officer Terri McCormick Senior Vice President, Human Resources William J. McGee Jr. Senior Vice President & Chief Risk Officer Marchelle E. Moore Senior Vice President, Chief Legal Officer & Corporate Secretary TJ Obrokta Jr. President & Chief Operating Officer Charles D. Stapleton Executive Vice President Matthew Wilcox Executive Vice President, Personal Lines 4

5 BrickStreet Board of Directors W. Marston Becker John J. Bishop Gregory A. Burton Governor W. Gaston Caperton III Kevin J. Craig Thomas V. Flaherty David L. Kaufman Robert L. McCracken Stephen G. Roberts Robert C. Smith Dennis B. Sullivan Michael L. Wiseman Motorists Mutual Board of Directors W. Marston Becker John J. Bishop Gregory A. Burton Kevin J. Craig Thomas V. Flaherty Archie M. Griffin Sandra W. Harbrecht David L. Kaufman Yvette McGee Brown David L. Rader Robert C. Smith Steven F. White 5

6 We are making sure our insureds understand the benefits of the communication between Motorists and BrickStreet exchanging underwriting information and being able to offer better pricing because of the integration. As an agency, we like having local people who truly understand our state and are familiar with our industries. Michael Winter Vice President, Bray & Oakley Insurance Agency Logan, West Virginia We are excited to watch as Motorists Insurance Group invests in new commercial and personal lines technology platforms, modernizes its product offerings and adds the industry-leading workers compensation capabilities that BrickStreet brings to the group. Doubling its surplus in the process is an added bonus. James A. Strassman Principal, Strassman Insurance Services, Inc. Richmond Heights, Ohio United as one company Motorists and BrickStreet move forward together Through the early stages of the integration, Motorists and BrickStreet have worked hard to establish a solid foundation. After the close of the affiliation, Motorists and BrickStreet began to develop co-branded products and cross-selling opportunities. Last August, the first jointly marketed products were released to select agencies in Illinois, Pennsylvania and West Virginia. By the end of 2017, the combined organization surpassed $2 million in premium through dozens of cross-sold policies. South Carolina, Iowa and Tennessee are the next three states where jointly marketed products and services will be available. Additional states and agencies will be phased in during the next few years. Feedback received from agency partners with access to the joint products and services has been positive, and these strong and valued relationships will pave the way for future success. The communication between Motorists and BrickStreet about our cross-selling opportunities has been excellent and is absolutely helping us succeed in writing new business. This affiliation has allowed us to better serve our clients because we can now package an entire program for a client all in one place, making it easier for us as an agency and easier for the client. Brett A. Andrews Vice President of Insurance Operations, Glessner Wharton Andrews Insurance Wheeling, West Virginia 6

7 Forward focus: HM Casualty becomes AlleghenyPoint Insurance The city of Pittsburgh, historically known as Allegheny City, sits nestled on the banks of the Allegheny River. In a nod to this heritage, BrickStreet renamed its Pittsburgh-based affiliate, changing it from HM Casualty to AlleghenyPoint, effective January This name change did not affect any policies or claims, but rather allowed HM Casualty to fit seamlessly with BrickStreet s other subsidiaries: NorthStone Insurance, PinnaclePoint Insurance and SummitPoint Insurance. Changing HM Casualty to AlleghenyPoint really felt like the final piece of the puzzle, said Vice President Kirk Aguirre. It cements the idea that they are part of the BrickStreet family of companies. Since acquiring the HM Insurance Group s workers compensation block of business in August 2016, BrickStreet has succeeded in expanding its presence in Pennsylvania. BrickStreet continued to grow as a leading provider of workers compensation insurance in the region, making it Pennsylvania s third largest workers compensation carrier. We experienced a tremendous amount of growth in 2017 and yet the process felt seamless. Business Director Donna Boeggeman BrickStreet also opened a new office in the heart of downtown Pittsburgh, in large part to accommodate the expanded team. This modern, open-concept office at One PPG Place officially opened its doors in February 2017, and is now home to more than 100 associates many of them HM veterans. This team is expertly led by Aguirre and by Business Directors Donna Boeggeman and Pat Carroll. This is such an exciting time to be part of BrickStreet, said Boeggeman. We experienced a tremendous amount of growth in 2017 and yet the process felt seamless. We are proud of what we accomplished this past year in Pennsylvania and beyond, Carroll added. 7

8 Combined footprint and office locations Ten offices writing in 28 states and the District of Columbia Edina, MN Sheboygan, WI Concord, NH DeWitt, IA Pittsburgh, PA Columbus, OH Naperville, IL Charleston, WV Murfreesboro, TN Charlotte, NC 8

9 Going farther: Our history of expansion continues with three more states BrickStreet has a long tradition of growth. What started as one office in Charleston, West Virginia, in 2006 has grown to include 16 states and the District of Columbia. Following its first expansion into Kentucky in 2009, BrickStreet has continued to expand its footprint in the past year alone, BrickStreet added Iowa, Georgia and New Jersey to its footprint, making 2017 another banner year for growth. BrickStreet never stops looking for smart ways to expand its geographic reach. As of 2017, this reach now includes the Peach State and the Hawkeye State. In undertaking these expansions, BrickStreet has always kept a firm grasp on the fundamentals that enable the company to offer the BrickStreet 360 service other companies cannot match. By giving policyholders direct access to what they need and helping to make workplaces and employees safer every day, BrickStreet s impact has been felt across the U.S. As a result of the affiliation with Motorists Insurance Group, further growth is on the horizon. The senior leadership team is hopeful it will be able to add Michigan and Wisconsin to its growing footprint in the coming year. We are always excited to add new jurisdictions to our footprint, said TJ Obrokta Jr., president and COO. When we started BrickStreet more than 10 years ago, we were solely in the West Virginia workers compensation market. Over the years, we ve worked hard to grow in order to benefit all BrickStreet stakeholders including policyholders, agents and associates. Our continued expansion across the U.S. and into other lines with the Motorists affiliation furthers our ultimate goal of making BrickStreet even more successful. In addition, the acquisition of the workers compensation book of business from Pittsburgh-based HM Insurance Group led directly to the decision to become equipped to write New Jersey exposures in The expansion into New Jersey is a perfect example of BrickStreet s strategic growth model as a result of feedback from agency partners in adjoining states like Pennsylvania, BrickStreet became licensed in New Jersey and can now accept submissions with ancillary New Jersey exposure. 9

10 Dedication. Compassion. Community. 10

11 The BrickStreet Foundation: Going the distance The senior leadership team at BrickStreet understands that the company s success has been built by the people in the communities it serves and knows the importance of giving back. Since its inception in 2012, The BrickStreet Foundation has followed through on the promise to promote a better quality of life in the communities and regions in which BrickStreet and its subsidiaries operate. Whether funding local nonprofits or providing assistance to families affected by the devastating 2016 floods in West Virginia, The BrickStreet Foundation has made a positive impact on countless lives. Through The BrickStreet Foundation, BrickStreet goes further by reaching farther into the community to help those in need. It s our hope that by sharing this good fortune, we can help the next generation flourish and be of assistance to those who are currently in need. Gregory A. Burton, executive chair of the board of directors Some of The BrickStreet Foundation s 2017 funding recipients included: National Youth Science Foundation, to help send children to science camp Pantry Plus More Inc., to provide after-school snacks for children in need The Ronald McDonald House, to assist in the construction of a new building The American Heart Association, to support a Heart Walk Cabell Huntington Hospital Foundation, for the Hoops Family Children s Hospital Good News Mountaineer Garage, to help repair donated cars for families in need Everyone involved has worked incredibly hard to ensure that BrickStreet has prospered over the years, said Gregory A. Burton, executive chair of the board of directors. It s our hope that by sharing this good fortune, we can help the next generation flourish and be of assistance to those who are currently in need. In 2017, The BrickStreet Foundation awarded funds to organizations that reflected BrickStreet s commitment to workplace safety, community arts and education, youth and health care issues, and to projects and initiatives that have significant and lasting effects in the region or community. 11

12 Admitted assets, liabilities and surplus (Amounts in millions for all BrickStreet companies) Cash and invested assets 2, , , , ,673.7 Other assets Total assets $2,344.4 $2,255.0 $1,986.4 $1,955.4 $1,859.0 Loss and LAE reserves 1, , , , ,045.6 Unearned premiums Other liabilities Total liabilities $1,545.6 $1,498.9 $1,280.6 $1,296.5 $1,255.3 Gross paid in and contributed surplus Other surplus Total policyholders surplus $798.7 $756.1 $705.8 $658.9 $603.7 Total liabilities and surplus $2,344.4 $2,255.0 $1,986.4 $1,955.4 $1,859.0 The above information is a summary of the annual statements filed with the West Virginia Offices of the Insurance Commissioner. A copy of the complete annual statements and/or audited statements for the past two years can be downloaded from the BrickStreet website. 12

13 Statement of operations (Amounts in millions for all BrickStreet companies) Net written premium Earned premium Loss and LAE expense Underwriting expense Underwriting gain (loss) (0.1) (0.1) 4.5 Investment and other income Net income before taxes Income taxes Net income Loss and LAE ratio 61.0% 69.6% 69.2% 76.1% 75.1% Underwriting ratio 34.7% 26.2% 31.7% 25.4% 22.2% Dividend ratio 0.3% Combined ratio 96.0% 95.8% 101.0% 101.5% 97.3% 13

14 Reaching further, going farther 14

15 BrickStreet office locations Charleston, W.Va. (Headquarters) 400 Quarrier St. Charleston, WV Phone: BRICK ( ) or Charlotte, N.C Ballantyne Corporate Place, Suite 150 Charlotte, NC Phone: BRICK ( ) or Naperville, Ill. 55 Shuman Blvd., Suite 150 Naperville, IL Phone: BRICK ( ) or Pittsburgh, Pa. One PPG Place, Suite 2700 Pittsburgh, PA Phone: BRICK ( ) or Motorists office locations Columbus, Ohio (Headquarters) Motorists Mutual 471 E. Broad St. Columbus, OH Phone: Concord, N.H. Phenix Mutual 42 Pleasant St. P.O. Box 900 Concord, NH Phone: DeWitt, Iowa Iowa Mutual 509 9th St. P.O. Box 290 DeWitt, IA Phone: Edina, Minn. Motorists Commercial Mutual Insurance 5050 Lincoln Drive, Suite 450 Edina, MN Phone: Murfreesboro, Tenn. Consumers Insurance 1620 Gateway Blvd., Suite 201 Murfreesboro, TN Phone: Sheboygan, Wis. Wilson Mutual 3330 Stahl Road Sheboygan, WI Phone:

16 16