PRESIDENT’S MESSAGE

During 2016, we did many complicated things to help us fulfill our simple mission. We made some milestone accomplishments, and we continued to invest in what is the single largest automation project in our company’s history: the replacement of our policy administration system with a significantly enhanced system.

We achieved outstanding financial results in 2016, due to careful underwriting management and pricing integrity, with the added bonus of minimal catastrophic weather-related losses.

The categories within our insurance operations seem simple: business insurance, and personal automobile and homeowners insurance. But the complexity and rate of change within those simple categories seem staggering.

From new developments in cyber liability, to autonomous vehicles and drones, to the impact that increasing marijuana usage could have on claims, we are responding to complex issues that were not even on the distant radar just a few years ago.

We bring to those challenges the tools of sophisticated data analytics combined with the depth and breadth of the expertise of our employees and agents, and we approach those challenges as opportunities to respond to new insurance needs. By developing and retaining our experienced workforce, and investing in our agency relationships, we will find growth and profit opportunities.

On behalf of our entire management team, I thank our employees and agents for all their hard work and accomplishments during 2016.

Late in 2016, we released a survey to all our employees to measure what is referred to as “employee engagement.” Our employee engagement measured 82% in the survey results, compared to an average within the insurance industry of 67%. Employee engagement experts produce voluminous studies of what makes or breaks employee engagement. To boil it down and make it simple, the following statements are attributable to fully engaged employees:

• I’m satisfied with my job.
• I rarely job shop.
• I’m motivated to give extra effort.
• I’d recommend my employer.
• I’m proud of my employer.

We broke the survey results down by functional areas within our company, and we are working with managers and supervisors to study results applicable to their areas, to find ways to retain and build on strengths, and improve in any lower-scoring areas.

To invest in our future growth with our agencies, we founded a special group for agents who are newer to the industry, to create networking and idea-sharing opportunities for them, and to strengthen our relationships with them and respond to their needs for product and service enhancements. We see our Aspire Agents as paving the way for their future and ours.

We know that our success requires us to stay focused on making people feel secure and making life better after bad things happen. By following that simple mission, we will continue to innovate and thrive in our complex industry and economy, as we have done since 1919.