First-Half 2011 Results
A message from Stu Henderson, President & CEO

It’s been a very active storm year throughout the U.S., with major storms in Alabama, Missouri, and even in our backyard community of North Minneapolis.  We’ve had our share of losses (more than at this point last year), but those losses have also given us the opportunity to demonstrate Western National’s great customer service to even more of our policyholders.  Thank you to everyone for the good work serving our customers in their time of need. 

A quick look at where we stand premium-wise: we wrapped up June with a little over half of our annual premium goal covered ($162.4 million, or 53.4% of the year-end $298.2 million goal).  Western National Mutual (56.0%) and Pioneer Specialty (53.8%) are both slightly ahead of pace to meet their goals; and Umialik (47.8%), Western National Assurance (46.1%), and WAMIC (40.5%) are tracking behind pace for the first half of the year.  We usually write more of our annual business in these first six months, so meeting the overall annual goal will require plenty of hard work across the group for the remaining months of 2011.

As always, profitability is our priority.  Through these first six months of 2011 our Loss Ratio is 60.3%, which is higher than last year’s first half ratio of 56.4% (due largely to the storm activity).  Our Loss Adjustment Expenses have dropped slightly from this time last year to 11.3% (compared to 13.5%), while our Underwriting Expenses have increased to 27.2% (compared to 26.2% at this time last year).  The overall result is a Combined Ratio of 98.8%, meaning we’re currently earning just over one cent on every dollar of premium that comes in the door.  After considering investment income and taxes, that adds up to a year-to-date Net Income After Tax (NIAT) of $6.8 million (compared to $8.3 million at this point last year), which brings our Policyholder Surplus up to $257.8 million.

With a strong premium push, and some luck on the weather front, the remainder of 2011 has good potential.  I look forward to reporting on our progress in the months to come with fewer losses and more profitable premium!