2 WESTERN RESERVE GROUP

Transcription

1 ORT N N A P E R UAL

2 2 WESTERN RESERVE GROUP 2013

3 TABLE OF CONTENTS President s Message 2 About Western Reserve Group 3 Financial Highlights 4 Selected Financial Data 5 Combined Statutory Statements of Income 6 Combined Statutory Statements of Admitted Assets, Liabilities and Surplus 7 Directors and Officers ANNUAL REPORT

4 PRESIDENT S MESSAGE I am delighted to report 2015 was another successful year for Western Reserve Group (Group). We achieved profitable results for a third consecutive year through a combination of premium growth, disciplined underwriting and expense management. The foundation for the Group s success continues to be driven by both our associates commitment to the fundamentals of our business and partnerships with dedicated independent agents. As a result, we are in an even stronger position to provide peace of mind to our valued policyholders. The Group s statutory surplus now exceeds $272 million, the most in the Group s history. This provides us a position of strength to not only fulfill our commitments, but to also continue to invest in the company. Our financial strength and sound operational practices are reflected in the recognition we receive from A.M. Best as an A (Excellent) rated company. Just as it has been for over 100 years, our pledge is to remain financially strong, stable and secure. Together with our independent agency partners, we stand ready to assist and protect our policyholders when the unexpected occurs. We posted significant financial accomplishments on many fronts during For the third straight year, we posted an underwriting profit from insurance operations, finishing the year with a combined ratio of 94.7%. This marked the best operating performance since 2006 as all of our operating states generated profits. We also achieved several key financial milestones with record highs in direct written premium of $206.7 million, statutory surplus of $272.3 million, and total assets of $468.0 million. To ensure our future success, we remain dedicated to investing in our business and enhancing the customer experience while strengthening the valuable relationships we enjoy with our independent agency partners. Multi-year investments in a new technology platform for rating, underwriting, policy administration, claims management and billing have been a tremendous team effort involving individuals across the entire company. This is the largest initiative we ve ever undertaken, and it is a vital part of our overall strategic plan moving forward. We are currently on track for initial deployment in 2017, beginning with our new claims management system. We are proud of the Group s proven track record of protecting policyholders and are poised to build on our recent initiatives and financial strength. On behalf of our Board of Directors and management team, I wish to express sincere appreciation to our employees and agents for their dedication, teamwork and commitment to Western Reserve Group. Sincerely, Kevin W. Day President & CEO 2 WESTERN RESERVE GROUP

5 ABOUT WESTERN RESERVE GROUP Western Reserve Group (Group), working with professional independent agents, has provided the highest quality property/ casualty insurance products, competitive pricing, and exemplary service to hundreds of thousands of policyholders. Headquartered in Wooster, Ohio, the Group is supported by 273 associates and over 2,800 licensed agents from over 625 locations. The Group consists of Western Reserve Mutual Casualty Company, Lightning Rod Mutual Insurance Company, and Sonnenberg Mutual Insurance Company, three Ohio-domiciled property/casualty insurance companies. As a regional carrier doing business exclusively in Ohio and Indiana, the Group has developed extensive expertise and understands the unique needs that exist for our customers. Whether it be for auto, home, business, or farm, we have programs to protect them all. CLEVELAND RD. - WOOSTER VISIT OUR WEBSITE AT BENDEN DR. - WOOSTER 2015 ANNUAL REPORT

6 FINANCIAL HIGHLIGHTS Thanks to strong financial performance, loyal independent agents, and dedicated associates, Western Reserve Group is poised to deliver on its promise of protection while also investing in the future $ $ $ $ $389.7 Total Assets (in millions) Surplus (in millions) $ $ $ $ $ % % % % % Combined Ratio Direct Written Premium (in millions) $ $ $ $ $ WESTERN RESERVE GROUP

7 SELECTED FINANCIAL DATA (IN THOUSANDS) Years ended December Operating Data Gross premiums written 206, , , , ,754 Net premiums written 195, , , , ,600 Premiums earned 193, , , , ,699 Net underwriting gain (loss) 9,587 8,863 2,875 (21,704) (15,352) Investment income, net 9,074 9,143 8,462 9,074 9,297 Realized investment gains (losses), net (1,817) 5,096 1, ,652 Net income (loss), pre-tax 19,576 25,898 15,694 (9,061) (818) Net income (loss) 12,376 23,954 16,045 (8,553) Balance Sheet Data Cash and invested assets 415, , , , ,597 Total assets 467, , , , ,671 Surplus as regards policyholders 272, , , , , Ratios Loss ratio Loss adjustment expense Underwriting expense Combined ratio 94.7 % 94.8 % 97.5 % % 108.5% 2015 ANNUAL REPORT

8 COMBINED STATUTORY STATEMENTS OF INCOME Underwriting gain (loss): (IN THOUSANDS) Years ended December Net premiums written $195,621 $192,701 (Increase) decrease in unearned premiums (1,714) (2,919) Premiums earned 193, ,782 Losses and expenses incurred: Losses 100,669 99,594 Loss adjustment expenses 20,403 19,635 Underwriting expenses 63,248 61,690 Losses and expenses incurred 184, ,919 Net underwriting gain (loss) 9,587 8,863 Investment income: Interest 8,113 7,770 Dividends 3,889 4,018 Real estate income (primarily rent for own occupancy) Realized gains (losses) on investments, net (1,817) 5,096 Total investment income 11,111 17,810 Less: Investment expenses 3,853 3,570 Net investment income 7,258 14,240 Other income, net 2,731 2,795 Income (loss) before federal income taxes 19,576 25,898 Federal income tax expense (benefit) 7,200 1,944 Net income (loss) $12,376 $23,954 6 WESTERN RESERVE GROUP

9 COMBINED STATUTORY STATEMENTS OF ADMITTED ASSETS, LIABILITIES AND SURPLUS (IN THOUSANDS) As of December Admitted Assets Bonds, at amortized cost $239,387 $232,025 Stocks: Preferred, at market (cost $0 and $997, respectively) Common, at market (cost $82,899 and $73,522, respectively) 132, ,970 Real estate, at cost less accumulated depreciation of $6,403 and $5,927, respectively 12,169 12,624 Cash and short-term investments 16,110 25,414 Other invested assets 15,511 9,765 Total cash and invested assets 415, ,774 Premiums in course of collection, net 46,196 44,791 Accrued investment income 2,383 2,370 Reinsurance recoverable on paid losses Federal income tax recoverable 1,258 - Deferred tax assets 1,324 - Other assets 1, Total admitted assets $467,972 $460,841 Liabilities and Surplus Loss and loss adjustment expense $77,405 $71,130 Unearned premiums 92,109 90,395 Ceded reinsurance balances payable Amounts withheld for others 4,192 6,033 Commissions payable 6,887 6,061 Accrued expenses and taxes, other than income tax 11,827 11,902 Federal income tax payable Deferred tax liability - 5,267 Other liabilities 2,580 1,833 Total Liabilities 195, ,780 Surplus 272, ,061 Total Liabilities and Surplus $467,972 $460, ANNUAL REPORT

10 DIRECTORS AND OFFICERS (L to R) (seated): Ronald E. Holtman, Kevin W. Day (L to R) (standing): John P. Murphy, C. Michael Reardon, Jeffrey P. Hastings, Kenneth L. Vagnini, Eddie L. Steiner, Floyd A. Trouten DIRECTORS: Ronald E. Holtman Partner in law firm of Logee, Hostetler, Stutzman & Lehman, Chairman of the Board of Western Reserve Group Kevin W. Day President / CEO of Western Reserve Group John P. Murphy Retired (formerly President/ CEO and Secretary of Western Reserve Group) C. Michael Reardon Chairman and President, United Titanium Jeffrey P. Hastings Of Counsel with the Law Firm Collins & Scanlon, LLP Kenneth L. Vagnini Retired President of The Gerstenslager Company Eddie L. Steiner President and CEO, CSB Bancorp Inc. Floyd A. Trouten Partner BDO USA, LLP (L to R): Gary W. Gwinn, Greg A. Brunn, Kevin W. Day, Michael A. Shutt, Gregory J. Owen EXECUTIVE LEADERSHIP: Gary W. Gwinn Vice President-Claims / Chief Claims Officer (CCO) Greg A. Brunn Vice President-Marketing- Underwriting-DSD / Chief Marketing & Underwriting Officer (CMUO) Kevin W. Day President / Chief Executive Officer (CEO) Michael A. Shutt Vice President-Finance, Treasurer & Chief Financial Officer (CFO) Gregory J. Owen Vice President-IT / Chief Information Officer (CIO) (L to R Seated): Dennis Manzella, Michele Young, Kay Risner, Chantel Meshew, Terry Rhodes, Woody Vogel (L to R Standing): Dave Chandler, Randy Donnamiller, Chris Racz, Fritz Raab, Jim Geopfert, Adrian Besancon, Dave Jarrett ASSISTANT VICE PRESIDENTS: Dennis Manzella Assistant Vice President, Marketing Michele Young Assistant Vice President, Business Operations Kay Risner Assistant Vice President, Strategic/ Product Development Chantel Meshew Assistant Vice President - ERM Terry Rhodes Assistant Vice President, Personal Lines Underwriting Woody Vogel Assistant Vice President, Claims Property/Recovery Dave Chandler Assistant Vice President, Claims Casualty Randy Donnamiller Assistant Vice President, Commercial/ Farm Underwriting Chris Racz Assistant Vice President, Controller Fritz Raab Assistant Vice President, Human Resources Jim Geopfert Assistant Vice President, IT Application Services Adrian Besancon Assistant Vice President, Investments Dave Jarrett Assistant Vice President, Legal Counsel 8 WESTERN RESERVE GROUP

11 OUR MISSION To provide the best insurance products, protection and service to our policyholders, delivered by a quality agency force, backed by enthusiastic and service-oriented employees, sound investments and financial strength.

12 Western Reserve Mutual Casualty Company Lightning Rod Mutual Insurance Company Sonnenberg Mutual Insurance Company