The Company achieved two important financial milestones in 2022 with over $10,000,000 in assets and over $1,000,000 in net income. The year-end figures have also revealed the most successful underwriting profit year in the history of the Company.

The Company had premium growth in 2022 of 9.3%; the increase is a result of new business, policy reviews and inflation factor increase. Net underwriting income at $844,705 is by far the highest in Clare Mutual financial history and can be attributed mostly to good claim results. Good underwriting and our inspection program are also factors contributing to this; for example, our inspection module will allow us to keep on top of expiring oil tanks and deteriorating roofing materials. This data will permit us to communicate with our policyholders, giving them advanced warning of our expectations before the following renewal. The underwriting profit is extremely important for a smaller insurer as we do not have significant resources for generating investment and other income, nor can investment income be counted on during turbulent market conditions. I am pleased to see these financial results as it validates the diligent and hard work of our entire team.

Since we do not have a large investment portfolio, selling products through our broker business is a means to provide an umbrella of services to our clients in addition to risk free income. We have been selling United General auto products through our broker network for over a year and sales are going extremely well. Premiums written in 2022 were $726,577 an increase of $248,660 from the prior year. Loss ratio at December 31, 2022 is 47.7% compared to 71.2% in 2021.

The effects of the pandemic continue to impact our economy. Limited availability of building materials, skilled tradespersons, and labourers, has significantly increased the rebuilding cost of dwellings and structures and our ability to close some claims in a timely manner. For 2023 we have implemented a 2% rate increase on our property premiums and will continue to apply the 7% inflation factor rate.

We are currently re-evaluating all policies to review their current replacement costs. Policies that are under 90% of the replacement cost are being automatically brought up to 90% of estimated insured value. A letter is being sent to the policyholder to explain the reason for the increase and advise of options that can help decrease the cost difference, such as selecting a higher deductible, reviewing discounts and /or getting an auto quote for a bundle discount.
It is important to understand what being underinsured means:

1. the policyholder in the event of a total loss, will only get up to the policy limit to rebuild the home; or
2. the policyholder, in the event of a partial loss, if not insured to at least 80% of the replacement value of their home, could be in a position to have to pay a portion of the loss out of pocket.

The 2022 hurricane season brought unprecedented loss experience to a few of our Maritime Mutuals. The experience of these Companies will bring valuable knowledge to the Mutual industry. These events have further impressed the importance of putting in place every measure to assure communications with clients is possible following a significant weather event. Ensuring that both offices have generator, communication and internet backup is necessary. PEI Mutual reached out to the Maritime Mutual community for assistance. We were able to provide telephone support with the assistance of our office staff and directors. Our Risk Manager and Loss Prevention Technician traveled to PEI for three weeks to help adjust claims.

Thankfully, the areas that Clare Mutual serves were spared from damage by Hurricane Fiona, as we only had two or three storm related claims reported to our offices.

As of June last year clients are able to make credit card payments through the Clare Mutual website. This was done with the objective of decreasing customer calls and provides a more efficient, direct means of making payments.

Cyber security safeguards, as well as, staff education, software and hardware management systems and knowledge of weaknesses in regards to cyber risk are constantly being reviewed to protect policyholder information.

Financial support will continue through donations to various organizations that are important to the communities serviced by Clare Mutual. Additional efforts will be placed in ensuring that this financial support will be well advertised to promote that the Company is a leader in supporting its community.

We look forward to another successful year in 2023, hopefully with time to work on some ongoing projects that will further enhance our client service and underwriting success.

I am grateful for the team of staff and Directors that constantly work together to bring the Company to another level of financial stability and also have the flexibility to be responsive during times that bring never ending change.

Henry Thibodeau

Chairman of the Board of Directors
April 4, 2023