President’s Report for November

The insurance board of KFB met Monday, November 19 at the home office. It was announced that the KFBloss ratio, as of October 31 was 110.96. This figures in a $5.9 million underwriting profit for October, even though auto was not profitable in October.

So let’s see, that’s 3 out of the last 4 months that we have been profitable…

Here’s a financial look so far for 2012:
We have, after the worst storms ever times 2, a $13 million surplus decline. That figure includes a $23 million debit which had to be subtracted because of a tax credit that couldnt be taken anymore. So as of October 31, we have $887 million in reserves.

As of October 31, KFB was 12,490 members behind 2011. As of November 19, we are 292 behind what we were as of Novemeber 2011. The company is expecting to have a flat growth rate.

Sorry, I found this a little funny; after all the talk about earthquake and how the west has such bad weather. The western district had an 86.57 loss ratio, which leads the state.

  • Just a quick note, 64 of 170 agencies are profitable as of November 2012. 87 of 170 are profitable in auto.

2013 has been acknowledged as the largest loss of policies in the history of KFB (That’s something to look forward to, guys!).

As you know by now, the letters to customers without a 25% increase will be stopped. They will still get deductible increase letters, but no mention of prices unless it exceeds an increase of 25%.

2013 budget was discussed with more good news to spread.
1. In the 4th quarter of 2013, a 3% auto inrease is assumed.
2. In the 4th quarter of 2013, an 8% homeowner increase is assumed.
3. In the 1st quarter of 2014, a 5% farm owner increase is assumed.

I can tell everyone from Nathan, John, and Brad, reinsurance and futre loss is all they want to talk about, even more than 3rd party earthquake.

Plans for 2013:
-They plan to have less emphasis ACV and more on percentage deductibles.
-1% wind/hail
-ACV roof endorsement unless it qualifies for replacement
1.Claim history
2.KFB autos
3.Property score
4.Inspection of the roof
-Earthquake written through Argenia, which is a company in the Lloyd’s of London group. In the first quarter, all new business with earthquake will be written though Argenia. In 3rd to 4th quarter, all existing earhtquake business will be re-written though Argenia. By December 31, 2014, no more earthquake will be written through Farm Bureau.

Here are suggestions that everyone might look at and if you like it, talk to your board members about:
1. Research Argenia as a company.
2. They will write business that we would like to write, but KFB doesnt want.
3. License us with Argenia. Let us write direct earthquake and other business, getting direct commisions.
4. This is taking Farm Bureau far away from earthquake exposure, which is what they want. This leaves us an avenue to write more business, get better commissions, and retirement buy-out if it’s direct.

Please research this and let me know your thoughts.

I hope everyone had a great Thanksgiving. Remember at 1:00 Friday, December 7, we have a board meeting at 4:00. I hope to see everyone at our agent’s meeting.

Your President,

Mickey Sirls

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