Second Quarter Results & Initiative Update:

A Message from Stu Henderson, President & CEO

With the calendar having already turned to August (that was fast – where has the summer gone?), I’m pleased to say that 2018 is shaping up to be a much better season on the catastrophe storm front than 2017. The milder start to summer, combined with continued quality underwriting by our staff as well as by our agency partners in the field, has helped us lower our Group’s loss ratio by a couple points relative to this time last year. The overall result has been a positive first half of the year for Western National, and growth in our policyholder surplus for even stronger protection for our mutual policyholders.

Speaking of financial strength: I’m pleased to report that Ward Group Inc. recently announced that Western National has once again been named to the Ward’s Top 50 Benchmark Group of Property-and-Casualty Companies for achieving outstanding financial security over the past five years (2013–2017). This is our 10th straight year on the Ward’s 50 list, and our 13th time in the past 14 years. This recognition wouldn’t be possible without the hard work of our employees and the execution of a solid business plan, as well as the strong partnership with agency partners like you — so, thank you for your continued work to grow profitably with Western National.

Now for a quick look at the numbers for the first half of 2018 (not including affiliate Michigan Millers): Through June 30, written premium for the Group was at $338.2 million – still behind goal, but we did make up some ground in the second quarter. Our Group’s loss ratio was at 55.3% (vs. goal of 57.0%), our loss adjustment expense ratio was at 9.8% (vs. goal of 10.2%), and our underwriting expense ratio was at 28.4% (vs. goal of 27.8%) – adding up to a combined ratio of 93.5%. These numbers indicate we are definitely heading in the right direction, but that there’s still work to be done to catch up with our premium goals in the second half.

While we’ve been working with you to get business on the books, we’ve also spent the summer working on making it easier for you to work with Western National online via our AgentsOnline agency website and systems. A big part of that has been expanding our feedback-gathering process — i.e., not just via our annual agency survey and regular visits with your Regional Agency Manager, but also by conducting online User Experience Tests and by working with our new Agency Experience Advocate (Margo Mackedanz) to better understand our agency partners’ frustrations and system priorities. The result is that we’ve refined some of the agency-facing system enhancements coming your way yet this year (e.g., “Search by Client”, Download for select commercial lines) and prioritized others for delivery in 2019 so that our technology better meets your needs. It’s just one of the ways we’re working to make it even easier to get business done with Western National, using any channel you choose (in-person, online, email, phone, etc.).

I look forward to delivering additional positive news on both the financial results front as well as the systems front later this year. As always, thank you for your partnership in the service of our mutual policyholders.

~ Stu Henderson