Central Mutual Insurance President F.W. Purmort shared a cautious but optimistic outlook with policyholders at Central\u2019s 136th annual policyholder\u2019s meeting held earlier this year.<\/p>\n
\u201cThe capital base of the company is very strong,\u201d said Purmort.\u00a0 \u201cAnd like any business in this economy there is a need to be a little more cautious.\u201d<\/p>\n
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Purmort noted the -6.5 percent return on Policyholders\u2019 Surplus was of the most concern to the company. While the Policyholders\u2019 Surplus Fund is still strong, there\u2019s been an erosion of the company\u2019s margin for error. This erosion was the trigger for strategic changes in product pricing.<\/p>\n
In addition to pricing deficiencies, Purmort noted other factors continued to impact the company\u2019s profits including an increase in large losses over $100,000, lost revenue when the company withdrew from writing business in New Jersey, and the weather.<\/p>\n
\u201cAny storm loss of more than $25 million is considered a catastrophe,\u201d said Purmort.\u00a0 \u201cOur catastrophe losses were a huge driver of what happened to our results in 2010.\u201d<\/p>\n
Purmort commented that recent results have raised questions about the company\u2019s strategy and provided an opportunity for management to assess Central\u2019s position, strengths and weaknesses.\u00a0 The result will be a focus on fundamentals in 2011.<\/p>\n
\u201cIn our business there are five fundamentals we need to focus on:\u00a0 Underwriting Selection, Rate Adequacy, Claims Processing and Reserve Integrity, Investment Portfolio Risk, and Customer Service,\u201d said Purmort.\u00a0 \u201cWe\u2019re focusing hard on these five essential functions.\u201d<\/p>\n
Purmort stated the bottom line is that the company has recognized its shortcomings, and has a strategy in place for recovery, a cohesive and decisive management team, the support of its agents, and confidence in the coming year.<\/p>\n
\u201cWe understand the reasons why we\u2019re in the position we\u2019re in.\u00a0 We know how to fix them and tough decisions have been made.\u00a0 Now we must have the patience to see our results improve.\u00a0 I have a great deal of confidence in 2011 and beyond.\u201d<\/p>\n
Thad Eikenbary, Vice President and Treasurer, began the Treasurer\u2019s Report by noting that, \u201ccalendar year 2010 was another challenging one for the Central.\u201d\u00a0 Positive investment returns during the year did, however, help to mitigate the impact of the underwriting results.<\/p>\n
Eikenbary reported that Central\u2019s direct written premiums decreased from $587.6 million in 2009 to $549.2 million in 2010.\u00a0 This was mostly a result of Commercial Lines writings decreasing by 15.8 percent.\u00a0 Personal Lines business saw a small increase of 1.1 percent.\u00a0 The company\u2019s combined ratio for 2010 increased to 118.9 percent as compared to 108.3 percent in 2009.\u00a0 Of course, a combined ratio of less than 100 percent is preferred in the industry.<\/p>\n
Net investment income for the company increased by $2 million from $41.2 million in 2009 to $43.2 million in 2010.<\/p>\n
\u201cIncome from the company\u2019s investment portfolio continues to be a very consistent aspect of the entire operation,\u201d said Eikenbary.<\/p>\n
Central\u2019s bond portfolio decreased by 3 percent during 2010.\u00a0 The quality of the portfolio remained very solid and Central continued to manage the maturity of the portfolio to ensure that it maintained the liquidity necessary to meet the company\u2019s financial needs.\u00a0 Central\u2019s stock portfolio represented 14.1 percent of the company\u2019s total invested assets.<\/p>\n
Central registered a net loss after taxes and dividends of $39.3 million in 2010, which was a significant increase over 2009.\u00a0 While the company experienced a net underwriting loss of $87.4 million, this was offset significantly by positive investment returns.<\/p>\n
Central\u2019s assets decreased by 2.3 percent to $1.39 billion, and by the end of 2010, the company\u2019s Policyholders\u2019 Security Fund had also decreased by 6.6 percent to $467.7 million.<\/p>\n
Eikenbary concluded, \u201cAlthough 2010 was another challenging year for the Central Insurance Companies, it was a year in which we focused on the fundamentals and made tough decisions in order to turn around the company\u2019s underwriting results.\u201d<\/p>\n
In other business, Edd Buhl, Senior Vice President and Secretary read the minutes from the 135th policyholders\u2019 meeting.\u00a0 E.R. Buhl, R.S. Lawson, and C.A. Runser were re-elected to the Board of Directors for a three-year term. R.J. Kutella was re-elected for a one-year term.\u00a0 Other directors include J.L. Hanson, T. B. Kearney, F.W. Purmort, D.P. Maconachy, and E.J. Noonan.<\/p>\n
Central Mutual Insurance Company is a personal and commercial property and casualty insurance company operating exclusively through independent insurance agents in 18 states.\u00a0 The home office is located in Van Wert, with regional offices located in Dallas, Atlanta, Boston, and Van Wert.<\/p>\n","protected":false},"excerpt":{"rendered":"
Central Mutual Insurance President F.W. Purmort shared a cautious but optimistic outlook with policyholders at Central\u2019s 136th annual policyholder\u2019s meeting held earlier this year. \u201cThe capital base of the company is very strong,\u201d said Purmort.\u00a0 \u201cAnd like any business in this economy there is a need to be a little more cautious.\u201d Purmort noted the […]<\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[7],"tags":[],"class_list":["post-10395","post","type-post","status-publish","format-standard","hentry","category-business"],"publishpress_future_action":{"enabled":false,"date":"2026-08-02 18:23:21","action":"change-status","newStatus":"draft","terms":[],"taxonomy":"category","extraData":[]},"publishpress_future_workflow_manual_trigger":{"enabledWorkflows":[]},"_links":{"self":[{"href":"https:\/\/thevwindependent.com\/news\/wp-json\/wp\/v2\/posts\/10395","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/thevwindependent.com\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/thevwindependent.com\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/thevwindependent.com\/news\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/thevwindependent.com\/news\/wp-json\/wp\/v2\/comments?post=10395"}],"version-history":[{"count":0,"href":"https:\/\/thevwindependent.com\/news\/wp-json\/wp\/v2\/posts\/10395\/revisions"}],"wp:attachment":[{"href":"https:\/\/thevwindependent.com\/news\/wp-json\/wp\/v2\/media?parent=10395"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/thevwindependent.com\/news\/wp-json\/wp\/v2\/categories?post=10395"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/thevwindependent.com\/news\/wp-json\/wp\/v2\/tags?post=10395"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}