FINANCIAL HIGHLIGHTS

Throughout the past year, our company’s financial foundation remained strong. At the end of 2015, policyholders’ surplus totaled $580.8, representing the addition of $13.4 million to the prior year’s ending surplus. Our company’s total admitted assets topped $1.7 billion at December 31, 2015.

Current year revenue and losses continue to trend favorably compared to the prior year. Direct premium writings in 2015 were $720.0 million, surpassing the previous year’s milestone level by $13.8 million. Net earned premiums for the year ended December 31, 2015 increased by 2.3 percent when measured against the same period last year, while net catastrophe and weather-related losses and loss adjustment expenses decreased from the $23.3 million experienced in 2014 to $14.9 million this year. Losses within the commercial property lines of business during 2015 were much higher than those incurred last year, however. This was a significant factor in reducing our company’s net income, reported at $28.3 million for the year, but representing a decrease of $14.2 million from last year’s net income.

While it is expected that commercial property results will vary from year to year, our 2015 loss experience is largely unfavorable to our long-term performance in these lines.

Our company’s other reportable financial measures for the year were commendable. Total investment income was $45.3 million in 2015, and included overall realized gains emanating from both equities and fixed income securities. Also during the year, reserves for prior accident years’ losses and loss adjustment expenses, net of reinsurance and discount, developed favorably by $13.4 million. This had a favorable impact on the loss and LAE ratio, easing the impact of the year’s unusually high commercial property losses. The underwriting expense ratio remained comparable to that of the prior year, helping to establish the company’s net combined ratio of 99.2 for the year ended December 31, 2015.