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2005 preliminary financial results

We plan to have our final audited financial results approved by our Board of Directors in early March; but we wanted to share some preliminary, unaudited, bottom-line results with you at this time. In sum, the test presented by the 2005 hurricane season has reaffirmed AEGIS’s financial strength. Although we incurred $120 million in hurricane losses after expected reinsurance recoveries, the growth and diversity of our current business activity enabled AEGIS to absorb them with only a modest $21 million decline in policyholders’ surplus. With $950 million in surplus at year-end, AEGIS is well positioned to continue to fulfill its mission for the membership in 2006.

We are delighted with the industry’s continuing strong support of AEGIS, resulting in membership increasing by five in 2005 to 474 overall. Total premium growth was greater than we expected, increasing over 10% in 2005 to $1.14 billion in total revenues. The upturn in the investment markets at year-end helped us to achieve a 4.1% return for the year. We were able to again declare a 5% continuity credit, the 18th year in a row we have been able to declare these policyholders' dividends. With our strong financial fundamentals, we were pleased to have had our A rating from Best’s and our A+ rating from Fitch reaffirmed with stable outlooks this past fall.

In April, we’ll publish our annual report and give you all the details with our final audited financials.