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FEBRUARY 2008 Message from the President
On behalf of your Board of Directors, it is my pleasure to present
the 2007 Annual Report for McKillop Mutual Insurance Company.
This past year your company was able to achieve a substantial
underwriting profit of $1,383,320 due largely to a lower than normal
loss ratio of 46.54%.Although our return on Investments was not quite as
favourable as last year due to the less than stellar performance of the
markets , we were still able to add $609,407 which represents
approximately 5% return on investment. This gives the company a net
income before income tax and return of premium of $2,018,383.
Your board is very happy with these numbers and believe these results
were at least partially attained due to the initiatives taken in the
area of loss prevention, sound underwriting practices, insuring all
properties to value as well as careful administration of all costs.
However we also realize that a certain amount of luck was involved and
luck may not always be on our side. Therefore after careful
consideration it was decided to add approx. $1,000,000 to reserves
resulting in a ratio of 1.25 : 1 surplus to written premium. This will
leave your company in a relatively strong position to face whatever the
future offers.
The Mutual Insurance system is based on "Insurance at Cost". We at
McKillop Mutual believe strongly in this concept and strive to return as
much of the profit as possible back to our owners (policyholders) .
Therefore your board is very pleased to declare a return of premium of
20% on property and liability business to eligible policyholders. In
accordance with company bylaws you must be a policyholder for 3 years to
be eligible. This is the largest return of premium in recent memory and
represents approximately $690,000. This is our way to say "Thank-You for
the great year", and should serve to substantially lower your insurance
costs.
In March 2007 we welcomed a new member to our board. Barry Mills was
elected to serve a three year term, replacing Steve Kennedy who retired
due to other commitments. Barry along with his wife Nancy & their family
live in Exeter. Barry has proven to be a very effective addition to the
board bringing forth lots of ideas and insight.
Your "Board of Directors" must remain accountable to all
policyholders. Therefore, if anyone has questions, concerns, comments,
criticism or even compliments I urge you to contact any director. A full
list of directors is published in the Annual Report. Please remember we
are here to serve on your behalf. If there is a problem" Tell us", if
not "Tell others".
The Annual Meeting will be held Wednesday March 5, 2008 at 1:30 pm at
the McKillop Mutual office in Seaforth. I encourage all policyholders to
attend and discuss the affairs of your company. Remember, you own it.
This past year has been very rewarding for me, I would like to thank
my fellow board members for giving me the opportunity to act as your
president this past year, I am still learning on a daily basis. Thanks
also go to our manager Ken Jones and all his staff for making my job as
president very easy.
Brad Carnochan, President
Message from the General Manager
When McKillop Mutual deals with a policyholder, it deals with one of
its owners. Established in 1876 McKillop Mutual Insurance Company is
100% Canadian and owned by its policyholders. We operate on a not for
profit basis, unlike stock companies that have to provide shareholders
with dividends from profits. Our roots are in rural Ontario.
As a member of the company, eligible policyholders may vote on the
affairs of the company and become a director. Eligible policyholders
also share in the profits of the company. Over the past three years we
have returned $1,217,764 to eligible policyholders and are very pleased
to offer another refund for the year 2007.
An insurance company has two sources of income – premiums earned and
investment income. It also has two basic expense categories – operating
expenses and policyholder claims.
What is an underwriting profit?
An insurance company achieves an underwriting profit when the premium
it earns exceeds the cost of its operating expenses and policyholder
claims. An underwriting profit means that the company made money on its
insurance business.
An insurance company can still earn a profit even if it loses money
on its insurance operations. This happens when the investment income
from the company’s varied investments is enough to offset the insurance
loss. When this situation occurs, it means the company had to rely on
its past financial successes to make money in the current year. It is
important not to rely on the past to realize future financial success.
While an overall profit is a good thing, the goal of many insurance
companies is to break even on their insurance operations, so as not to
rely on the investment profit.
Profit allows the company to remain strong, minimizes the need for
future premium increases and allows the company to grow in size.
Thank you for making 2007 another successful year.
Ken Jones, Secretary/Manager
Farmers’ Accident/ Labour Replacement
Coverage is available for Accidental Death & Dismemberment and
Replacement Labour Expenses. The plan is primarily designed for farm
operations that rely on the principle owners, their immediate families
or key farm labourers to perform critical and/or time sensitive
functions for the farm operation. Contact your agent or broker to learn
more about this valuable coverage.
Loss Prevention
McKillop Mutual Insurance Company has implemented a routine
inspection program and it is the company’s goal to have all properties
inspected. The purpose of this program is to help make the homes and
premises of our policyholders safe by identifying and correcting any
concerns before loss or damage occurs. This is a valuable service
offered usually at no cost to policyholders.
Loss prevention works, and we hope you will welcome loss prevention
officers into your homes and onto your premises. If you have been chosen
for an inspection, the loss prevention officer that will complete the
inspection will contact you in advance to arrange a time that is
convenient for you both. You will be notified of any concerns the loss
prevention officer has, and we will let you know if there are any
recommendations to improve the safety of your property.
Fighting Ice Dams
Ice damming on the lower edge of a roof is caused by the heat from
the attic melting the bottom layer of snow on the roof. Over time water
can back up under the shingles into the roof space and eventually into
the living area. Thick ice will form on the roof and it can be very
difficult to remove without causing shingle damage. On a sloped roof you
goal is to make drainage paths through ice on the lower edge where most
ice dam and water backup problems occur. The best defence against ice
dams is to reduce the attic temperature with proper insulation and
ventilation. If this is not possible, using de-icing cables is the
easiest way to prevent ice damming by providing drainage paths. Chemical
de-icers may be used to create drainage paths however they may cause
discolouring of shingles. Water leaks inside the house are troublesome
and costly to fix but don’t necessarily signal a structure problem
requiring total clearing of the roof. Opening drainage paths may stop or
minimize the leaks and avoid the expense and danger of clearing the
roof.
Candle With Care
Left unattended or put in the wrong place candles can become a
potentially dangerous hazard. Make sure you enjoy them with safety in
mind
- Never leave burning candles unattended and extinguish before
going to sleep or leaving the room.
- Do not allow children to keep or use candles or incense in their
rooms.
- Keep candles at least one metre away from anything that can
burn, including curtains.
- Always use stable, nonflammable candle holders.
- If you have children in your home, store candles, matches and
lighters out of reach.
Identity Theft
Identity fraud is on the increase in Canada and if you have become a
victim you should follow these procedures:
- Promptly notify your bank and credit card companies.
- Report your suspicions to the police and the RCMP “phonebuster
unit”: 1-888-495-8501
- Advise your passport office.
- Cancel all bank or credit cards.
- Notify Canada Post if you feel your monthly bills are being
monitored.
- Obtain a new OHIP, SIN and drivers license.
- Notify the Privacy Commissioner at:
www.privcom.gc.ca or
contact www.safecanada.ca
for more information.
Damage to Non-Owned Automobiles
This coverage is available for vehicles that you may rent or lease
under endorsement OCPF #27. This endorsement provides for loss or damage
to a non-owned automobile including its equipment resulting from the
care, custody or control of that non-owned automobile by an insured
person. In order for the coverage to be effective the lease agreement
must be in the name of the named insured. Please contact your
agent/broker for further information.
Vehicle Identification Numbers (VINS)
These numbers are the fingerprints of your vehicle. These are the
series of 17 letters and numbers that are accepted as the world wide
standard for identifying vehicles. The VIN provides key information
about the manufacturer, model, model year, make, equipment and class of
a vehicle. It uniquely identifies a specific vehicle to the insurance
industry, law enforcement, government, consumers and concerned
stakeholders. If the VIN on the vehicle ownership does not match the VIN
plate on the dashboard, then contact the motor vehicle licencing office
right away. If the VIN on the pink liability slip does not match the VIN
plate on the dashboard, then contact your insurance agent/broker or your
insurance company. Also, as an anti fraud initiative we have been
collecting copies of ownerships in order to record the Registered
Insurance Number (RIN) which is a number specific to the registered
owner of the vehicle.
Fire Extinguishers and Smoke Detectors
It is law in Ontario that a smoke detector is required on each level
of residential buildings. Fire Extinguishers and Smoke Detectors are
available at the office for sale to our policyholders at or below cost.
Fire Extinguishers may also be returned to the office by our
policyholders for refill at no cost.
Farm & Town Financial Services
Due to recent restructuring, our financial services company in Exeter
has closed. Your account will continue to be serviced by your
representative who will be contacting you.
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