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YEAR IN REVIEW
CHAIR’S REPORT TO MEMBERS
CONTINUED...
2014 was a very good year for Bay of Quinte Mutual. In fact, it turned
out to be the best year in our history financially achieving an after tax
profit of $3.494 million and third best year of underwriting results earning
an underwriting profit of $1.836 million.
A cross section of staff from underwriting, claims, loss
prevention, finance, management and all board members
spend significant time planning for the future.Topics such as
industry trends, additional coverages, changing
demographics, staff adequacy and operations during disasters,
such as an ice storm are discussed at great length and plans
are put in place.
The insurance environment continued to be very competitive during the
year with stock companies and even some farm mutual insurers
aggressively seeking premium growth and new business. Bay of Quinte
stayed the course and did not waiver from our philosophy regarding new
business nor did we compromise our underwriting standards. Despite a
competitive environment, our consistent approach to business was
successful and we achieved a slight improvement in growth for 2014
compared to 2013. Our premium grew by 4.3 %, policy count increased
by 1.4 %, new business increased both in terms of policy count and
premium volume and our cancelled business decreased for the third year
in a row.This year we experienced most of our growth in our commercial
lines business.
Net claims and adjusting expenses increased approximately $700 000 over
2013. Mother Nature was much kinder this year and there were no
substantial weather events that impacted our policyholders compared to
two storms in 2013. 513 claims were reported during the year, which was
35 fewer than 2013.There were fewer large losses in 2014 and the size of
the losses was substantially lower than experienced last year.The reason for
higher net claims and adjusting expenses in 2014 is the fact that most of the
claims occurring during the year were smaller in size and Bay of Quinte
received less money from our reinsurance program. Fire and water losses
were the main causes of claims in 2014 with 45 fire losses producing claims
of $4.3 million and 178 water losses resulting in claims of $3.3 million.
The financial markets were less volatile in 2014 and we were able to
recover the unrealized losses we suffered in 2013. The year ended with
the unrealized change in the market value of the investment portfolio
increasing the investment income by approximately $1.4 million, a vast
improvement over the decrease of $642 000 in 2013. Despite a consistent
approach to managing the investment portfolio, in just one year the impact
of the market value of the investment portfolio on our investment income
changed by $2 million.
The annual report for 2005 was positive on the bottom line.
I am very pleased to say that 2014 also ended with a plus
sign. An underwriting profit of one million, eight hundred
thousand dollars, coupled with a very strong investment
income of two million, eight hundred thousand dollars
created a total profit before income tax of four million, seven
hundred thousand dollars.
The above noted numbers related to premium growth,
surplus increases, underwriting profit and investment returns
are certainly not possible without the ongoing high level of
performance and commitment of our staff and management.
Your board is very appreciative of the effort put forth. We
also recognize our broker business partners in many small
towns and cities in eastern Ontario. Last but really the most
important, we thank our loyal policyholders for past, present
and future business.
Mutually yours,
ANNUAL REPORT & NEWSLETTER 2014
retrospective
enter to
WIN!
Once again we are pleased to
offer you a chance to WIN a
discount certificate to be applied
against your 2015 – 2016
insurance premiums.
Please read the enclosed information and
complete the “tear off ” section.
Completed entry forms can be returned
to us by mail or taken into your
agent/broker’s office, and they will
forward it to us. All entries received
before Tuesday, April 14, 2015 will be
entered into a draw for one of six
discount certificates to be applied to your
insurance premium with our company.
1st prize is a $400 discount certificate,
2nd, 3rd, 4th, 5th, and 6th prizes are $200
discount certificates. The draw will be
made at the Board of Directors meeting
to be held on Tuesday, April 14, 2015.
INSURANCE TIPS FOR
OUR AGRICULTURAL
POLICYHOLDERS
Our claims department has some suggestions for you to consider
when you are reviewing your insurance policy with your broker.
These suggestions are the result of claims activity that has taken
place over the past year.
H.R. (Harry) Scanlan
It has been an honour for our company to provide you with your
insurance protection. We recognize you have several options for your
insurance and we appreciate the fact you have selected our company.
Barns and outbuildings must be specifically insured and listed on
your policy. The detached private structures coverage that is
included in your homeowner package does not include buildings
or structures that are designed or used for agricultural or
commercial purposes.
Box 6050, 13379 Loyalist Parkway
Picton, Ontario, K0K 2T0
3426572
The winter we experienced in 2014 resulted in many barns and
outbuildings collapsing. Collapse due to the weight of ice, snow
or sleet can be purchased for your barns and outbuildings.
Coverage is not automatically included with your fire and wind
coverage and before you can add the coverage, your barns and
outbuildings must be inspected by our loss prevention
department.
Livestock prices have increased substantially over the past few
months. We would encourage you to review the limit of
insurance to make sure that you have adequate coverage. If you
are not insured to the appropriate level and a loss occurs you
could end up not fully compensated for your loss.
facebook.com/bayofquintemutualinsurance
@bayofqmutual
Coverage is available to indemnify you for loss or damage to
your equipment and any loss of income that results in the event
your equipment breaks down. Equipment break down coverage
is designed to compliment and broaden your existing coverage.
THANK YOU FOR PARTICIPATING,
GOOD LUCK TO YOU AND
CONGRATULATIONS TO THE
2014 WINNERS.
We are not responsible for lost entry forms,
or entry forms that arrive after April 14, 2015.
Winners will be notified by mail.
PROTECTING YOUR HOME
WHILE ON VACATION
Ask a neighbour or friend for help. Prior to leaving for your vacation, ask
someone you trust to keep an eye on your home and make sure he or she has
your contact information so you can be notified in the event something happens.
Ask this person to bring in your mail and flyers as a build-up of mail is a visible
sign to others that you are not home. Arrange to have your driveway and
walkways kept clear of snow. If you normally park your car in your driveway,
then you may want to ask a neighbour to park in your driveway so that it looks
as though you are home.
In order to maintain your insurance coverage for water related losses when you
are away for more than four consecutive days, you need to either drain your
pipes and shut off the water or ask someone to check your home daily to make
sure the heat is maintained and your sump pump is working properly.
Install and set automatic timers. Automatic timers on some lights in your
home that go on and off at certain times during the morning and evening will
give the appearance you are home.
Complete a final check of your home. Walk around your home to make sure
that all of your doors and windows are locked. If you have an entrance to the
inside of your home from your garage, lock that door to prevent access to your
home should someone gain access to your garage. Remember to make sure your
vehicles are locked and if you have a garage door opener, place the unit inside
your home to prevent access to your home should your vehicle be broken into
Unplug your electronics and small appliances. If you take a few minutes to
unplug your electronics and small appliances then they will be unharmed if a
power surge occurs while you are on vacation.
The board of Bay of Quinte Mutual Insurance Co. operates
an annual rotation of directors assuming the role of Chair of
the Board. During the business year of 2014, it has been my
responsibility and honour to be Chair of the Board. I had
acted in this capacity previously in 2005. As a demonstration
of our growth I would like to show some comparisons from
2005 to 2014.
In reporting for the year 2005, we announced the opening
of our then new addition to our building. We also had
achieved a milestone by reaching a one to one ratio of
surplus to premium. That year passed without a catastrophic
storm event and we avoided the need to use our reinsurer in
that category.
BALANCE SHEET
ASSETS
Cash
Portfolio investments
Accrued interest
Accounts receivable
Agents and policyholders
Reinsurers
Reinsurers' share of provision for
unpaid claims and adjustment
expenses
Deferred policy acquisition expenses
Prepaid expenses
Property, plant and equipment
Deferred income taxes
2014
2013
$
$
2,287,756 2,105,352
40,498,775 37,799,490
205,920
238,175
6,223,720
15,810
3,156,661
2,233,218
9,387
872,547
108,000
5,808,373
124,794
5,187,623
2,122,132
2,483
968,440
113,000
FOR THE YEAR ENDED DECEMBER 31, 2014
PREMIUM INCOME
Gross premiums written
Less reinsurance premiums
2014
$
22,878,121
(3,220,070)
2013
$
21,938,928
(2,965,989)
Net premiums written
Increase in unearned premiums
19,658,051
(528,471)
18,972,939
(407,453)
Net premiums earned
Service charges
19,129,580
170,636
18,565,486
163,352
19,300,216
18,728,838
10,537,710
14,574,431
(534,670)
(5,257,181)
10,003,040
9,317,250
9,297,176
Our keynote speaker at the meeting will be:
9,411,588
Chief Dario Cecchin
DIRECT LOSSES INCURRED
Gross claims and adjusting expenses
Less reinsurers’ share of claims and
adjustment expenses
55,611,794 54,469,862
Fast forward to 2014, the addition is more fully utilized as
employees have been added to compliment our needs. Our
surplus to premium ratio has increased to 1.4 :1. Good
fortune in weather allowed us to once again pass a year
without severe weather losses, therefore no catastrophic claim
with our reinsurer.
We did however sustain losses. Our claims staff dealt with
some five hundred thirteen claims, totaling in excess of ten
million dollars. A look back again to 2005 shows losses in
the range of four and a half million dollars. Premium income
in 2014 nears twenty three million compared to 2005 at
thirteen and one half million.
Water related losses, such as sump pump failures and ruptured
pipes have become second only to fire in terms of total dollar
value. This issue is of some concern to the insurance industry.
A number of companies are now restricting or capping the
amount payable on water losses. Damages to properties due to
overland water flood in Alberta, specifically the High River area
and here in Toronto were typically not insured. Some pressure
is being felt to provide coverage for flood. Bay of Quinte has
not yet made changes to respond to either of these issues.
Your insurance company continues to act as a strong
corporate citizen, making donations within our service area.
Monies were presented to 4-H clubs, Almost Home, The
County Marathon, Farmtown Park, Campbellford Memorial
Hospital, area fire departments and others.
Our provincial organization known as OMIA, the Ontario
Mutual Insurance Association provides training for staff,
management and directors at their facility in Cambridge,
Ontario. As relevant courses or seminars become available
we accept and encourage the opportunity to broaden
insurance knowledge and hone the professional skills needed
today. Meeting with our mutual insurance peers at these
presentations is always viewed as very valuable in addition to
the educational component.
CONTINUED ON BACK
LIABILITIES
Accounts payable and accrued liabilities
Due to reinsurers
Income taxes payable
Provision for unpaid claims and
adjustment expenses
Unearned premiums
POLICYHOLDERS’ SURPLUS
Surplus and resources for protection
of policyholders
712,695
114,527
412,083
685,948
97,547
245,199
9,513,041
11,934,706
12,604,325
11,406,235
22,687,052
25,039,254
32,924,742 29,430,608
APPROVED ON BEHALF
OF THE BOARD
______________________ Director
______________________ Director
55,611,794 54,469,862
EXPENSES
Net premium acquisition costs
Policy services
Other
Salaries and benefits
Directors and professional fees
Travel and education
Loss prevention
Advertising
Office and communications
Ontario premium taxes
Licences and dues
Miscellaneous
Building occupancy costs
Depreciation of property, plant
and equipment
STATEMENT OF SURPLUS AND
RESOURCES FOR PROTECTION OF
POLICYHOLDERS
318,041
3,838,524
1,395,524
166,102
208,190
435,521
82,555
474,267
89,412
70,490
86,439
84,761
103,147
134,830
7,460,772
7,384,656
UNDERWRITING INCOME
1,836,404
2,026,932
INVESTMENT INCOME
2,819,730
957,653
NIL
70,326
COMPREHENSIVE INCOME BEFORE TAXES
4,656,134
3,054,911
INCOME TAX EXPENSE (RECOVERY)
Current
Deferred
1,157,000
5,000
745,000
(12,000)
1,162,000
733,000
3,494,134
2,321,911
FOR THE YEAR ENDED DECEMBER 31, 2014
COMPREHENSIVE INCOME FOR YEAR
BALANCE - END OF YEAR
Name:
2014
2013
$
$
29,430,608 27,108,697
3,494,134
COMPREHENSIVE INCOME FOR YEAR
2,321,911
32,924,742 29,430,608
Address:
Phone:
The 141st annual general meeting of the policyholders of the
Bay of Quinte Mutual Insurance Co. will be held at:
St. James The Minor RC Church
Loogman Hall (in the basement)
236 Edward Street, Stirling , ON
Thursday March 12, 2015 at 11:00 a.m.
• To receive the financial statements and the auditors’ report for
the year ending December 31, 2014
• To appoint auditors for the year 2015
• To elect directors
• To transact any other business that may properly come before
the meeting.
of the Township of Stirling-Rawdon Police Service.
267,318
4,109,063
1,241,703
162,317
191,415
447,031
76,155
557,576
93,321
70,214
52,128
89,384
REFUND OF REINSURANCE PREMIUMS
BALANCE - BEGINNING OF YEAR
NOTICE OF ANNUAL
GENERAL MEETING
STATEMENT OF
COMPREHENSIVE INCOME
AS AT DECEMBER 31, 2014
VOID
ELECTION OF DIRECTORS:
The directors whose term of office will expire at the annual meeting are:
Zone 2:
Zone 5:
Zone 6:
Zone 8:
Mr. Calvin Thomas
Mr. Steve Raymond
Mr. Harry Scanlan
Mr. Fred Lang
These gentlemen are all eligible for re-election.
Application for directorship must be received according to By-Law
One, article 23 by 11:00 a.m. on February 25, 2015. One director is
required for each of zones 2, 5, 6 and 8.
CLARIFICATION OF ZONES:
Zone 2: Wards of Bloomfield, Hallowell, Hillier, Picton and
Wellington in the County of Prince Edward
Zone 5: Cities of Belleville and Quinte West
Zone 6: Cities of Peterborough and Kawartha Lakes, Municipality
of Trent Hills, Township of Stirling-Rawdon, County of Peterborough
and points West and North
Zone 8: Municipality of Tweed and Township of Tyendinaga
All policyholders are cordially invited. This is the policyholder’s
meeting and any suggestions that might be of benefit to the
company will be welcomed.
If you plan to attend this meeting, please call 1-800-267-2126 to
reserve a seat by Monday March 02, 2015.
✁
CHAIR’S REPORT TO MEMBERS
Your Policy # and Agent
Comments or Questions:
TO BE DRAWN APRIL 14, 2015
You can download the complete financial statements from our website at www.bayofquintemutual.com, you can
email our company and request it at [email protected] or you can call our office at 1-800-267-2126.
We invite your comments and suggestions for improvement of our Company.
We are not responsible for lost entry forms, or entry forms that arrive after April 14, 2015. Winners will be notified by mail.
Please complete and return this portion. Either present this section to your broker to be forwarded to us or mail to:
Bay of Quinte Mutual Insurance Co. P.O. Box 6050, Picton, Ontario K0K 2T0