BULLETIN
February 21, 2018
Western National Insurance Group 2018 Annual Business Plan
In some ways, I am almost reluctant to identify our group’s 2018 goals – they are so similar to our goals from the last four or five years that one could speculate we gave them no real thought this year. However, focusing on those same strategic areas over that period has resulted in really extraordinary achievement by our companies, so they must be pretty good! Those areas of focus are: profitable premium growth, deep relationships with select agents, a differentiated customer experience, and being an Employer of Choice. For 2018, they will remain the same, but what we do to achieve them will be either different or improved upon.
As to profitable premium growth, we expect to grow our total premium in 2018 by 6% over the prior year’s premium, which is slightly lower year-over-year growth than in recent years. A major driver of this is an increased focus on the “profitable” part of that goal: some lines of business have struggled a bit this last year (or longer) and we will take rate, and tighten risk selection, as a result (so we expect less growth). This figure is without any acquisitions or affiliations (although none are planned; as in the past, if a good one drops in our lap, we will look at it).
We remain committed to the independent agency system to distribute our products and services. Our agents are our partners, and this commitment ensures we do right by them (because if we do not, and they leave, we are in trouble!). The focus this year will be on technology for the agent, including improving download, portals, electronic forms, and other like projects.
This is the third year where we have sought to take our customer service to the next level. The “customer” to us is not just the policyholder but also the agents we carefully choose to represent us to those policyholders. Innovation and reasonable prices are still required, but a customer-centric focus – built on a mission to “anticipate customer needs and impress with our solutions” – will be how we differentiate from the competition. This will include continued development of our “Connect” and MyAccount systems as well as an improved Net Promoter Score.
Finally, we will continue to be an “Employer of Choice”, meaning we will be recognized as an employer where people want to work and stay – and grow. This goal requires us to focus on pay and benefit packages, which will remain competitive, but also on onboarding, continuing education, and engagement. We plan on more broad improvement in engagement scores where there is a need.
Turning to the actual numbers, our 2018 goals are:
- Direct Written Premium of $660.3 million
- Loss and Loss Adjustment Expense Ratio of 67.2%
- Underwriting Expense Ratio of 27.8%
- Return on Revenue of 9.2%
The resulting Combined Ratio of 95.0% (without dividends) plus investment income of $30.4 million would produce a Net Income After Tax (NIAT) of $41.4 million.
Profit added to the bottom line will allow us to ensure that we always pay the covered claims of policyholders, that we can remain a stable market when we are needed, and that we can reinvest in people and processes that improve our products and services. We look forward to doing so once again in 2018.
~ Stu Henderson, President and CEO
