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A Year to Date Report from MFM icon

With five months behind us in 2015, we are very pleased with our financial progress. Our sales results are very close to meeting our business plan while our loss results are considerably better than plan. A milder winter and cooler spring have had a positive influence on our YTD results, but there is more to this story than just the weather.

New losses are down by 18% YTD and loss ratio results are roughly 7 loss ratio percentage points better than the same period of 2014…which like vintage fine wine was a very good year itself. Our May YTD Combined Ratio (with more accounting to complete) is estimated at an excellent 87%. Since we are now right in the middle of the Midwest storm season, our YTD results provide us a great “cushion”. However, we have much less apprehension today than 5+ years ago regarding the impact of severe weather on our overall results. Geographic diversification is a wonderful thing.

As mentioned, sales are very close to meeting plan. We are growing at a rate of 6%. Although new states are leading the way, it’s important to note that we are getting solid growth out of our traditional Midwest region as well. We have had very good sales in our new Motor Carrier program which was introduced in late 2014. Our Agents recently received the introduction of our new Golf Course program and our new Wineries, Breweries, and Distilleries program. They have also received an introduction to our new contractor E&O coverage. Whether it be new lines, new states, new products, or new programs, these changes make it incrementally easier for us to grow with our Agents and provide more diversity in our writings.

Our newer states of Utah, Arizona, Indiana, Nevada, Colorado and Wyoming are coming along very well. We’ll give special recognition to Utah Agents as one of our newest states where sales are far exceeding our expectations. On May 1st, we started the process of appointing Agencies in Missouri and Kansas. Kristin Rhodes, CIC, based in Overland Park, KS, has joined us as our Regional Marketing Manager. A big welcome to all newly appointed Agencies in Missouri and Kansas! The geographic diversity that these new market entries give us is significant. It makes us less vulnerable to any regional market softening, concentrated weather event or systematic increases in casualty exposure. For instance, should we incur insured losses due to the type of civil unrest experienced in Ferguson, MO or Baltimore, MD this year, we would mitigate the loss with premiums written elsewhere. Diversification in our business is good in so many ways beyond just the weather related property exposures. Risk diversification in multiple business lines, states, and classes of business provides more loss predictability to our consolidated book.

In January we released our new Mission statement: “The employees of MFM serve our Agents as valued customers thus providing MFM policyholders with exceptional products and service.” While many companies talk of “building partnerships,” we truly believe that meeting our Agents' expectations as our primary customer is the best path to achieving success and meeting the obligations of our mutual insureds. As such, we work extraordinarily hard to meet those expectations. Always know we appreciate your business and work hard to earn it.

Best regards,

Ron Boyd, CPCU
President and CEO

Posted on Friday, June 05 @ 12:46:16 -05:00
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