2008 IN REVIEW

 

As in the past, soft market conditions in Personal Automobile persisted largely unabated in 2008. The continued refinement of pricing matrixes by many large national companies made individual pricing of accounts almost the norm. The entire underwriting process has become, in large part, an impersonal exercise. Large aggressive agencies have become accustomed to this impersonal relationship with their companies.

While Casco refined its pricing matrix to a degree, and continued to refine and improve our systems capabilities to allow for increased automation, we also continue to feel there are often gray areas in many situations that require human intervention in the underwriting process. One of our great strengths, I believe, is the personal attention we are able to give to each of our agency representatives.

Once again goals for growth were modest, but, we felt, realistic. While we doubled our production efforts of 2007, we fell short of our goal for 2008. Yet there was a step in the right direction. Rhode Island, again, led the way. South Carolina, which we entered in 2007, still has not produced what we had anticipated, but we feel we are making progress in this state. All other states failed to make their goals, but there were bright spots on the horizon for 2009.

On the loss side of the ledger we experienced one of the worst years in our history. The loss ratio jumped nearly 19% to 75.9%. The frequency of new claims increased 14%, which far out distanced any increase in premium. On a more positive note, we can point to eight individual claims that were either reported during 2008 or had adverse development in 2008 that amounted to over $1.3 million and equated to 8.4% on our loss ratio.

Unfortunately everyone is acutely aware of the massive troubles in our economy that started in 2007, we know now, and really took hold during 2008. This coupled with lower than expected production and higher than expected losses caused a “perfect storm” effect with the result being our policyholders surplus position decreased for the first time in seven years.

Even with the 2008 numbers, we continue to believe that conservative and thorough underwriting and investment practices ultimately will reflect a healthy bottom line. The scramble for market share is not to our benefit in the long run, and we resist the temptation to get caught up in this frenzy

As always, my thanks to our owner companies, all members of our staff and to each of our agents for their continued support of the company and to the goals and principals we have established.

Sincerely,

William Swetland

William Swetland, CPCU                                                                                                                           President/CEO