Annual Report 2011 - SNL Financial

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Annual Report 2011 - SNL Financial

Below I’ve highlighted several components of the workers’ compensation strategic and operational plan for

2011.

Regional Office Growth Plan

The investment in regional office expansion over the past (3) three years continues to pay dividends for the

Company. Eastern Alliance Insurance Group delivered year-over-year premium growth of 23 percent and

finished 2011 with direct written premium of $156 million while maintaining underwriting discipline.

Regional office highlights follow:

Mid-Atlantic Region

(Lancaster and Wexford, Pennsylvania offices)

The Mid-Atlantic regional office had a breakout year increasing premium writings 17.9 percent to $120 million in its

(4) four core operating states; Pennsylvania, Maryland, Delaware and New Jersey. The Company continues

to “play well at home.” Pennsylvania premium writings increased to $110 million in 2011 representing

approximately 90 percent of the Mid-Atlantic region and 70 percent of the overall Company premium. Premium

growth was driven by premium renewal retention of 89.7 percent, renewal rate increases of 2.1 percent and

new business writings of $21 million. The establishment of a local office in Wexford has been instrumental in

the profitable growth of the Western Pennsylvania book of business from $16.0 million in 2009 to $24 million

at year end 2011. The Mid-Atlantic regional office produced very solid bottom line results including a

91.1 percent combined ratio and net income of $6.8 million.

Southeast Region

(Charlotte, North Carolina Regional Office, Richmond, Virginia Satellite Office and

Franklin, Tennessee Satellite Office)

In 2011, we continued the very exciting build-out of the Eastern Alliance Insurance Group franchise in the

Southeast region. The Southeast regional office increased its premium writings 34.2 percent to $20 million

in its (4) four core operating states; North Carolina, Virginia, South Carolina and Tennessee. North Carolina

is the largest state representing $9 million of the premium written in the Southeast region. Premium growth

of 34.2 percent was driven by premium renewal retention of 83.3 percent, renewal rate increases of 2.9 percent

and new business writings of $8 million. We are particularly pleased with the bottom-line results in this

region including an 86.5 combined ratio and net income of $1.8 million. The Southeast regional office has

produced excellent growth and profit results for the Company since its inception in 2008.

Midwest Region

(Carmel, Indiana Regional Office)

We continue to be pleased with the execution of the Midwest business plan. Premium writings increased 26.3

percent to $16 million in its (3) three core operating states; Indiana, Kentucky and Michigan. Indiana represents

$14 million of the premium written in the Midwest region. The premium growth of 26.3 percent was

driven by premium renewal retention of 85.9 percent, renewal rate increases of 1.4 percent and new business

writings of $4 million. This office produced a healthy bottom line with an 85.5 percent combined ratio and

net income of $1.6 million. We announced the Midwest management succession plan in the third quarter

of 2011. Mort Large joined the Company in July of 2011 to serve as the Regional Business Executive in

the Midwest. He brings a wealth of talent, managerial experience and agency relationships to the Midwest

regional office. We wish Mike Michael well in his retirement years and thank him for his valued service since

he joined us via the acquisition of Employers Security Insurance Company in 2008.

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