Third Quarter Results & Initiative Update:

A Message From Stu Henderson, President & CEO

It seems like just yesterday I was sharing our 2017 business plan with you; yet, here we are already in the fourth quarter of the year. With the onset of colder weather, we’ve now finally wrapped up a very active hail-and-windstorm season — one that has given our Claims staff an even bigger opportunity to show the value of a Western National policy by delivering on our promise to pay valid claims. On top of handling that above-average claims activity, we’ve also completed a major move of our headquarters office (after more than 45 years in our previous location; you’ll find a photo gallery of the new space in this edition of Announce), released a much-requested new endorsement (Manufacturer’s E&O for Commercial Package policies), and made significant progress on some online system enhancements coming your way in early 2018 (including an online forms library and cross-browser compatibility for AgentsOnline). Looking at that list, it’s no wonder the time has flown by so quickly, and it’s also no surprise that Western National will be hitting the ground running into the new year.

Before we jump too far ahead, let’s look at our Group’s numbers through the third quarter of 2017 (not including the numbers of our affiliate Michigan Millers): Through September 30, we had written $476.5 million in premium, which means we made up some ground since the previous quarter but are nonetheless still trailing our goal pace. Our Group’s loss ratio was at 57.8% (vs. goal of 54.9%), the loss adjustment expense ratio was at 10.2% (vs. goal of 10.0%), and our underwriting expense ratio was at 27.6% (vs. goal of 27.5%) — adding up to a combined ratio of 95.6%. While there’s only so much we can do now about the catastrophe storm losses, there’s plenty that we can all still do about meeting our production and non-catastrophe storm loss ratio goals. With continued hard work from our employees and from agency partners like you, we know we can close the gap on our premium goal in these remaining weeks of 2017; although we expect the loss ratio will remain elevated through year-end.

Thank you as always for your partnership in the service of our mutual policyholders. In a year with much to be thankful for — including our upgrade to an A+ (Superior) rating by A.M. Best and a place among the Ward’s 50 list of top P&C companies (again!) — our relationships with our Independent Agency partners continue to be at the top of our list. I look forward to a productive close to 2017 and a great start to 2018.

~ Stu Henderson