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"Numerous Nuisance Storms Influence 3rd Quarter Results" icon

Midwest Family's 3rd quarter results were "small" storm laden. No single storm produced much press but the number of storms throughout all 7 of our operating States produced significant total dollar loss in July and August. A variation to the saying: "A small storm here and a small storm there and pretty soon you are talking about some real dollars". Through our 2nd quarter we produced a very respectable .94 Combined Ratio. July and August were poor months while September results were excellent. Our YTD Combined Ratio is a respectable .99 through September. Our last quarter is usually an aid to our results placing us in a great position to finish 2009 strong.

Written premiums are up 5% through September and our Surplus is up by a similar percentage. We have experienced the results of a slow economy with payroll and receipt audits generally meaning return premiums. We have also experienced some policy cancellations due to business closings and home and auto foreclosures. New sales have been good enough however to put us in an overall growing revenue position YTD. Thank you all for all of your new business.

We began investing again in Common Stocks on April 1 "averaging in" over the last few months. This has been a plus to investment income with significant unrealized capital gains to date. Our Investment Portfolio which is made up primarily of Bonds has a very high quality rating and a short duration. We fully expect interest rates to rise in the not to distant future allowing us to capitalize when this occurs. It is also prudent for all of us to anticipate some inflation with all of the deficit spending and borrowing that is occurring in Government right now. A "soft" monetary policy from our Federal Reserve could also become an inflation influence and is already producing a devalued dollar. Inflation prospects and effect on higher claims costs could be the greatest influence to begin hardening our markets. Time will tell.

Our new Policy Processing System is coming to fruition. This System entails a complete rewrite of all that we do in Policy, Billing, Claims, and our online Agency presence. The Agency portal has the greatest amount of change and we are very proud of this anticipated final product. Right now we are very close and are sprinting toward a 4th quarter introduction. Significant final testing and Employee training is taking place right now. More to follow.

In summary, we are very pleased with our prospects for ending 2009 strong and in an excellent financial position poised for growth in the future. We are always mindful of the huge contribution our Agents have in our success. Always know we appreciate your business!

Best regards,

Ron Boyd, CPCU
President and CEO

Posted on Monday, October 26 @ 11:40:26 -06:00
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