President’s Letter

John K. Smith, President & CEO

John K. Smith, President & CEO

Another year has come to a close and we are off and running into the next! Though for many of our insureds, this is a quiet time of the year, here at PLM, the opposite is true.

On December 31st and January 1st, we renew more than 30% of our business which presents an excellent opportunity for our team to review and quote new business. From a claims perspective, the dramatic weather changes in the northern states bring a host of new claims-related activity. On the legal side, courts are back in session after the holidays with our friends in the legal and judiciary communities busy with activity.

Unfortunately, one of the best things we can say about 2018 in terms of numbers is that we have closed our books and are optimistic for a better 2019!

During the year, our premium growth was extraordinary, surpassing our production targets with our premiums rising to just over $249 million. However, the poor loss activity that I last reported never abated and continued right up through the new year. Our underwriting loss was no better. Weather-related and fire losses plagued our retail /wholesale building materials, light manufacturing, and our heavy primary manufacturing books of business. After a very quiet year in 2017 in terms of general liability, losses roared in 2018 in this segment of our business.

I have been talking for more than a year not only about PLM’s less-than-ideal results in the commercial auto line of business, but the insurance industry’s as a whole. At PLM, we have taken and implemented quite a few remedial actions in an effort to improve the risk management practices employed by all of our insureds. In fact, we are spending most of the first half of 2019 visiting with all of our insureds in an effort to assist them in not only overcoming loss frequency, but also avoiding or controlling potential future losses.

It is probably no surprise that the rocky investment market in late 2018 resulted in an unrealized equity loss for PLM, despite us ratcheting back our marked-to-market securities early in the fourth quarter. While we had record-breaking investment income, the end result when combined with an underwriting loss, was a drop in our policyholder surplus of just over $13 million.

So, we have our work cut out for us, but we are prepared and ready to take on 2019. For example, we’ve changed our approach to new business for the year ahead. As mentioned above, business development representatives (BDRs) will now be focusing much of their time on building relationships with existing customers.

Additionally, we’ll be taking a fresh look at loss control and claims to see how we can reduce claims and help our policyholders protect their businesses and prevent losses in property, commercial auto and general liability.
We are excited about these new initiatives and are optimistic about the year ahead. I look forward to seeing many of you at various trade shows this coming year. If anyone here at PLM or I can personally be of any assistance, please do not hesitate to contact me.

I stand ready to receive and answer any questions you may have at 267-825-9246 or at jsmith@plmins.com.

PLM