First Quarter Results & Initiative Update:

A Message from Stu Henderson, President & CEO

It seems like just yesterday I was wishing you a Happy New Year, but here we are already well into the second quarter and with spring in full swing. The warmer weather has already been a factor on the claims front, as our Group has logged more-significant-than-usual losses – due in part to earlier severe weather – throughout the first part of 2017. Fortunately, Western National was (and is) prepared with a solid reinsurance program and our experienced Claims staff, which will both continue to be important if the forecasts are correct in predicting a more-severe-than-average summer in 2017.

Taking a look at the first quarter numbers (not including affiliate Michigan Millers): As of March 31, written premium for the Group is at $161.2 million – putting us slightly behind goal, but with plans in place and time yet to make up the difference. Meanwhile, our Group’s loss ratio is at 55.3% (vs. goal of 54.9%), our loss adjustment expense ratio is at 10.1% (vs. goal of 10.0%), and our underwriting expense ratio is at 27.2% (vs. goal of 27.5%) – adding up to a combined ratio of 92.6%, which is not a bad place to be after the first few months of the year. However, it’s still early; and there’s plenty of work yet to be done by our employees and agency partners to meet our year-end goals.

Looking beyond the bottom line, our primary focus in 2017 continues to be providing a uniquely exceptional experience for our customers. One of the ways we’re supporting this strategy is by enhancing our technology. We’re continuing to update AgentsOnline, most recently with an updated policy information system; we’re continuing enhancements to our customer relationship management system; and we’re making good progress on the development of a new back-end claims management system that will support better claims information for our agency partners. We’re excited about the ways these efforts, along with ongoing product and service developments, will benefit our agents and policyholders in the months ahead. We’ll keep you updated on these initiatives and more as the year progresses — stay tuned!

As always, thank you for your partnership in the service of our mutual policyholders. I look forward to delivering more positive news later in 2017.

~ Stu Henderson