Clare Mutual Insurance Company

Chairperson’s Report

The 82nd Annual Meeting of the Clare Mutual Insurance Company

At year end 2018 Gross Written Premiums have increased by approximately 5.99% compared to 1.65% in 2017. The premium increase is a result of new business and a full year of premiums calculated under the new rate structure implemented with the new Compass Policy Management system. The premium growth in 2018 is the largest in several years and we expect this to continue in 2019 with the assistance of our marginal premium increase. A 2% rate increase on homeowner and tenant package policies has been approved by the Board of Directors for implementation as of February 1, 2019 and a 2% inflation protection factor will also be applied to 2019 policies as in the past.

Net claims for 2018 are approximately $104,000 higher than prior year. Claims frequency remained stable with 67 claims reported in 2018 and 62 in 2017. Favorable loss experience for the last 5 years has resulted in decreasing reinsurance rates for both property and liability. Total decrease in reinsurance premiums will be approximately $119,400. Thank you to Farm Mutual Re for its continuing partnership with Clare Mutual.

During 2018, with the direction and collaboration of the Human Resource Committee, two new Directors and a Loss Prevention/Claims Specialist were recruited. Director Maxine Boudreau was succeeded by Lonnie McNeill in January 2018. Director Nelson Lombard was succeeded by Beth Misner in June 2018. Mike Daley was hired as Loss Prevention Specialist and Claims Adjuster.

The Company aims to ensure the procedures and infrastructures are continually reviewed and updated to protect the Company from the increasing frequency and sophistication of cyber-attacks. The Company will allocate additional resources in the form of technical support for breach testing to ensure current systems have the necessary software and hardware safeguards to protect against cyber-attack, as well as, educate staff and management on system and knowledge weaknesses in regards to cyber risk.

On October 13, 2017 the Company received a letter from OSFI reporting the findings and recommendations from their July 2017 review and these were addressed in 2018 or are currently being updated including an Incident Response Policy, Capital Management Policy, Risk Management Policy and Corporate Governance policies to include roles and responsibilities of the CEO and of the Board, Board self-assessment, Director Qualifications, Nominee Criteria for election to the Board and Director Education. The following director certification courses were taken: Introduction to the Mutual Industry, Introduction to Insurance, Basic Reinsurance Underwriting, Role of the Audit Committee and Strategic Planning. A Strategic Planning Session is scheduled for September 2019.

Education will continue to be a priority for the Company for both Directors and staff. Employees attend Insurance Institute webinars regularly on specific products. Additional courses and seminars will be offered as requested or as they become available through various channels.

In 2019 the current Company website will be updated to a mobile friendly version. A Social Media Policy will be developed as the Company’s advertising expands to a social/digital marketing strategy. Advertising through various media will continue.

Loss prevention inspections have continued as an important part of our underwriting process. We are pleased to note that the number of serious safety issues have reduced significantly since the beginning of our comprehensive inspection program began 7 years ago. A number of dwellings that we insure are coming around for their second inspection, and these clients have been educated on safety and loss prevention. Any previous significant underwriting concerns have been addressed. An inspection software system was implemented in January 2013. This system has proved to improve the quality of information collected during inspections.

We continue to be satisfied with the results obtained with our Investment Manager RBC Phillips, Hager and North. In addition to our own Investment Committee meetings to review results, the Company also hired the services of an investment monitoring service which provides information regarding our manager results compared to the P&C industry results.

The Company is negotiating a contract with stakeholders which will expand the Company’s insurance product market. The Company will be having discussions with United General Insurance Corporation (UGIC) in 2019 in regards to the opportunities for UGIC to expand its territory to include Nova Scotia. The possible expansion would provide an additional auto market.

Thank you to all the staff of Clare Mutual who continue to show their dedication to the Company and the policyholders and to all Directors dedicated to serving as committee members.

Henry Thibodeau

Chairman of the Board of Directors
April 2, 2019