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Daniel C. BridgePresident & CEO
Mark J. McDonnellSenior Vice President
Over the past decade, Vermont Mutual has produced industry-leading premium growth, profitability and growth of policyholder surplus. Our exceptional results have earned us a spot in the Ward’s 50 ® Top
Performers for the past seven consecutive years, a Financial Stability Rating of A+ Superior from A.M. Best and the praise of our independent agency partners and their clients.
With our 188 years of experience insuring homes, businesses and automobiles in the Northeast, we are no strangers to the challenges created by severe weather. By maintaining our underwriting discipline and commitment to our core values, we have been able to produce strong growth and profitability in spite of these infrequent challenges.
The winter of 2015 was truly unique, as historic snowfall in Massachusetts and consistently below average temperatures throughout the northeast, resulted in unprecedented losses, most notably in the form of ice damming on the properties we insure. As a result of the adverse winter weather, our incurred losses increased by approximately $90,000,000 over 2014.
The record number of claims reported, with a policyholder behind each one of them, provided us the opportunity to keep the promises we make each time an agent places their client in our trust. By all measures, the service levels provided during the catastrophic winter were exemplary and we are grateful to our claims employees, agents and independent adjusters for the commitment they have shown to our customers. We believe 2015 provided thousands of convincing examples of the value of an independent agent and their decision to place their customers with Vermont Mutual.
While we would term the winter weather and ensuing losses “historic”, outside of winter, the claim volume was as expected. Also, as the year progressed, our reinsurance partners recognized the catastrophic impact of winter and provided us with a recovery of a portion of our winter losses, a tangible reminder of why we value those relationships, some of which we measure in decades. Their display of partnership, coupled with fourth quarter losses that were significantly lower than expected, allowed us to achieve a combined ratio of 99.3%. We were also pleased to grow our written premium by 5.5% to $401,019,601 and policyholder surplus by 2.3% to $380,880,769.
Our employees, the foundation of our success, also committed their time and talent to serve local communities, either on their own or as part of company sponsored volunteer opportunities. Operationally, we made significant progress modernizing products, systems and processes to allow us to adapt and compete in the evolving insurance business.
Over the next several pages we’re proud to highlight our Company’s progress, our dedicated staff, our loyal agency partners and our commitment to the communities where we live, work and do business. We enter 2016 having been tested by the challenges of 2015, but with a confidence in our ability to execute under difficult circumstances and an incredible excitement for what lies ahead.
ASSETS 2015 2014
Cash & Short Term 47,243,174 36,454,372
Bonds 459,209,919 470,740,175
Stocks 104,688,283 113,166,889
Real Estate 3,442,278 3,694,344
Premium Balances 72,868,365 69,421,529
Other Assets 70,637,434 63,956,605
Total Assets 758,089,453 757,433,914
LIABILITIES 2015 2014
Reserves for Unearned Premium 192,841,633 184,536,647
Reserves for Loss & Loss Expense 136,447,999 139,611,275
Other Liabilities 47,919,051 61,111,548
Total Liabilities 377,208,683 385,259,470
Policyholders’ Surplus 380,880,769 372,174,444
Total Liabilities & Surplus 758,089,453 757,433,914
A.M. Best Company Ratings “A+” Superior, Class IX
188th ANNUAL STATEMENT
AS OF DECEMBER 31, 2015
188th ANNUAL STATEMENT
ASSETS (in millions)
DIRECT PREMIUM (in millions)
POLICYHOLDERS’ SURPLUS (in millions)
750
700
650
600
550
500
450
400
400
375
350
325
300
275
250
400
375
350
325
300
275
250
225
2012 2013 2014 2015
2012 2013 2014 2015
2012 2013 2014 2015
v e r m o n t m u t u a l i n s u r a n c e c o m p a n y | n o r t h e r n s e c u r i t y i n s u r a n c e c o m p a n y , i n c . | g r a n i t e m u t u a l i n s u r a n c e c o m p a n y
OUR COMPANY
Chartered in 1828, Vermont Mutual Insurance Company is the oldest property & casualty insurer in Vermont and one of the ten oldest mutual insurance companies in the United States. We have operated continuously since that time in Montpelier, Vermont. Along with the wholly owned subsidiary, Northern Security Insurance Company, Inc. and the affiliated Granite Mutual Insurance Company, Vermont Mutual Insurance Group provides commercial and personal insurance protection throughout the Northeast. In partnership with more than 800 independent agency office locations, the Group insures over 285,000 policyholders with a direct written premium of more than $400,000,000. AWARD WINNING
Vermont Mutual has long been recognized as a leader in the industry. A. M. Best, the global rating agency for the insurance industry, has assessed our Financial Stability Rating as “A+ Superior”. In presenting the A+ Superior rating, A.M. Best stated that “Vermont Mutual [has] consistently outperformed the industry composite in recent years.”
For the past seven consecutive years Vermont Mutual has also been recognized as one of the top 50 property & casualty insurers in the United States by Ward Group, one of the industry’s
most respected benchmarking organizations. Companies recognized by Ward Group go through a rigorous evaluation that factors growth, profitability, operational efficiency and financial strength over a five year period.
The recognition by Ward Group and A.M. Best has once again affirmed Vermont Mutual’s position as a leading provider of homeowner, automobile and business insurance in the Northeast.
TECHNOLOGY
We’ve come a long way since 1828. No longer will you find reams of documents and room after room of filing cabinets. Today Vermont Mutual is a technologically advanced company, introducing the latest advancements in web technology, modernizing systems and processes and ensuring secure electronic data. Vermont Mutual’s highly skilled Information Technology department supports an enterprise-class infrastructure that allows us to provide the exceptional service our Agent Partners and policyholders deserve.
MOVING FORWARD
In October of 2015 the new VermontMutual.com website was introduced. Developed entirely in-house, the new website features a responsive, mobile-ready platform and a wealth of new
information designed to make it easier for consumers to explore Vermont Mutual’s many offerings.
The website is just one facet of a suite of new online initiatives, including our upcoming “myVM”, a customer web portal set to debut the first quarter of 2016.
We continued to improve our brand visibility with commercials on networks such as CNN, ESPN, HGTV, NFL Network, and MSNBC. As well, we are proud to have partnered with the University of Vermont in support of their student athletes.
Vermont Mutual remains a disciplined and dedicated partner to our agents and our policyholders. It was what defined us back in 1828 and holds true to this very day.
View our latest television commercial at:
vermontmutual.com/tv
OUR PEOPLE ARE OUR STRENGTH
Vermont Mutual’s family of 250 employees are among the most dedicated in our industry. Together with our Agent Partners, Vermont Mutual provides peace of mind for more than 285,000 policyholders. Our employees take pride in their work and are committed to providing a level of service that exceeds the expectations of our agents and policyholders.
AGENT PARTNERS
We are proud to partner with some of the finest agents in the U.S. Vermont Mutual has long recognized the benefit to our policyholders of working with independent insurance agents. It’s why we offer our policies exclusively through the independent agent channel. With offices in all of the markets we serve, our Agent Partners can best assess the unique insurance needs of their clients and match those needs with the right product and insurance company.
AWARD WINNING WORKPLACE
We place a priority on providing an environment that allows people to succeed; with an emphasis on work/life balance that embraces physical, social, financial and community well-being.
Vermont Mutual is honored to have received both the Best Places to Work in Vermont Award and the Governor’s Excellence in Worksite Wellness Award. We believe it to be a significant accomplishment and a source of tremendous pride to be recognized as a “Best in Class” insurer and acknowledged by our staff as a superior place to work. The awards stand as testament to the forward-thinking and collaborative environment Vermont Mutual works to achieve every day.
GIVING BACK
Vermont Mutual believes it is our obligation to give back to the communities we serve. We are proud to continue a long-standing tradition of donating both time and financial support to charities local to the states and communities where Vermont Mutual conducts business.
Throughout the year we field teams of volunteers that contribute to local community organizations. Through significant employee participation, Vermont Mutual supports community and charitable events and organizations that encourage active and healthy lifestyles, including among others, Making Strides Against Breast Cancer, Vermont Corporate Cup Challenge, and the Vermont Foodbank.
CHARITABLE GIVING FUND
Established in 2014, Vermont Mutual’s Charitable Giving Fund provides financial support to organizations that help to build, maintain and enrich healthy lives and strong, vibrant communities. The Fund’s primary focus is to contribute to non-profit organizations that serve Vermont Mutual communities. To date the Charitable Giving Fund has provided grants up to $25,000 to over 75 charities in the communities we serve.
v e r m o n t m u t u a l i n s u r a n c e c o m p a n y | n o r t h e r n s e c u r i t y i n s u r a n c e c o m p a n y , i n c . | g r a n i t e m u t u a l i n s u r a n c e c o m p a n y
Vermont Mutual volunteers assisting at the Vermont Foodbank
Daniel C. BridgePresident & CEO
Mark J. McDonnell, CPCU, CICSenior Vice President
Richard N. BlandVice President, General Counsel & Secretary
Susan L. ChicoineVice President, Human Resources
Joanne M. CurrierVice President, Information Technologies
David N. DeLuca, CPCUVice President, Claims
Brian C. Eagan, CPCUVice President, CFO & Treasurer
Shaun P.T. FarleyVice President, Marketing
Terry J. MooreVice President, Underwriting
William H. Brooks (1973)Retired President & CEOVermont Mutual Insurance Group
William A. Gilbert (1997)Retired Attorney
John D. Hashagen, Jr. (1988)Retired PresidentVermont National Bank
J. Timothy Ide (1980) Retired PresidentE.T. & H.K. Ide, Inc.
George D. Milne (1978)Retired PresidentGranite Savings Bank & Trust Co.
Richard N. Bland (2000)Vice President, General Counsel & SecretaryVermont Mutual Insurance Group
Daniel C. Bridge (2014)President & CEOVermont Mutual Insurance Group
William A. Catto, CPCU (1996)Retired President & CEOVermont Mutual Insurance Group
William P. Cody (2003)Account Vice PresidentUBS Financial Services, Inc.
John N. Evans, Ph. D. (2006)Professor, UVM College of MedicineFormer Dean of the UVM College of Medicine
Michele S. Gatto (2006)Retired Executive Vice PresidentNational Life Group
David J. Provost (2012)Senior Vice President of Institutional Advancement & Finance, Champlain College
Thomas J. Tierney (1993)Chairman (Retired President & CEO Vermont Mutual Insurance Group)
Steven P. Voigt (2013)Executive DirectorReThink Health: UCRV
OFFICERS DIRECTORS
DIRECTORS ADVISORY COUNCIL
v e r m o n t m u t u a l i n s u r a n c e c o m p a n y | n o r t h e r n s e c u r i t y i n s u r a n c e c o m p a n y , i n c . | g r a n i t e m u t u a l i n s u r a n c e c o m p a n y
John L. Altieri, CICMassachusetts
Ashley H. Bouchard, CPCU, AUVermont
Anthony M. CorveloMassachusetts
Diane M. HansonMassachusetts
Diane M. Hashagen, CPCU, CICNew Hampshire & Vermont
Deborah S. MetivierNew Hampshire
Steven G. Rahl, CPCUMaine
George J. SyrotiukConnecticut, Rhode Island & Massachusetts
Brian G. Whalley, CIC, CPIANew York
MARKETING TERRITORIES
STABLE PREDICTABLE COMPETENT PARTNER
Cover photo: Majestic Mount Mansfield as viewed from Cambridge, Vermont
89 State Street, P.O. Box 188, Montpelier, VT 05601 | 800.451.5000 | VermontMutual.com |
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