A few weeks ago, AM Best announced that its A rating of AEGIS was under review with Negative implications. This week, Best announced the results of their review, which is to downgrade our rating from A (Excellent) Negative Outlook to A- (Excellent) and to upgrade our outlook to Stable.
We held a number of face to face and telephonic meetings with Best's over the past several months as part of the annual review process that began in the fall of 2008. We spent a considerable amount of time with their analysts explaining to them the various steps we have taken to address capital adequacy and to improve our score under the Best's Capital Adequacy Rating model (BCAR). They understand and appreciate the wisdom of these steps and over time they did indeed improve their view of our capital adequacy. One of the most effective tools we used was to purchase an adverse development cover ("ADC") from Berkshire Hathaway at year-end 2008 to reduce potential volatility in our loss reserves on previously written casualty business. The agreement was designed by AEGIS, Berkshire Hathaway and Guy Carpenter to provide us with additional capital support at a reasonable cost, and should enable us to improve our BCAR scores over the next several years.
While Best agreed that the ADC reinsurance arrangement we put in place was helpful, they suggested certain term changes that would have allowed us to maintain our A rating but would have cost AEGIS significantly more premium without achieving sufficient economic benefit to the Company. Although we would, of course, prefer the slightly higher rating, we have a fiduciary duty to you, our owners. AEGIS management and its Board of Directors wholeheartedly agreed that we should not spend the additional premium necessary to retain the A rating. Based on our discussions, we believe that if we achieve our business plans over the next 12-24 months, we will be in a position to receive an upgrade to our rating.
I have discussed the importance and worth of an A rating versus an A- rating with a number of risk managers and our major brokers. All said they had no difficulty with an A - rating and all agreed that they saw no problem with AEGIS maintaining our business and market leadership. This is particularly true, they advised, during these tough financial times as most companies suffered in 2008 and many household insurance names are experiencing significantly greater financial difficulty. We agree with the risk managers and brokers we surveyed and we hope that all of you agree with our decision not to make uneconomic expenditures simply for rating agency purposes.
AEGIS has had a history of successfully weathering storms over the last twenty years and with your support we fully expect to do so again. As you will see from Best's review when it is published, AEGIS obviously remains a well capitalized company that has the unique strength of being a mutual that the energy industry has constantly supported. Our mission remains the same and we promise to continue to do our utmost to fulfill it by working together with you. We look forward to discussing our progress with you in detail at our annual Policyholder's Conference in July.
We are pleased to report that the first quarter was a very good one for AEGIS. Member and broker support remains outstanding and everyone seems to understand the need for our underwriting approach at their renewals. Thank you for that consistent support.
The following are unaudited figures: Premium for the first quarter is slightly ahead of our plan and we have been achieving rate increases, where appropriate, particularly in the excess liability line, where our loss experience has been poor for several years. Losses have contained no surprises thus far for this year. Most positively, our investment results have well exceeded our plan with a 1.90% pre-tax total return through March 31, and a 2.89% total return for the year-to-date through April 30.
As you know, our Continuity Credit programs allow Members to share in the financial results of the Company. Since 1987, we've returned $900 million in continuity credits to our members - $215 million has been returned in just the last five years. Most often, our bottom line financial performance, i.e., surplus growth, is good. Last year it was not. This was due to the macro-investment climate, as well as some fairly significant losses, including Hurricane Ike, the California wildfires and the Midwest floods. These events were summarized in our recent mass email and will be reviewed in detail in our 2008 Annual Report, which is at the printers as this letter goes out. Last week, we reviewed all of our Credit programs with the Board of Directors, who approved the following credit declarations.
Due to the significant decrease in total surplus in 2008, the continued adverse development in excess liability losses and ongoing investment market volatility, the Board believes it is prudent to reduce the continuity credit levels. After carefully considering the membership's 2006 - 2008 excess liability losses and the necessity to restore surplus, the Board agrees it is appropriate not to have a continuity credit for excess liability. However, the Board has approved continuity credits at 2.5% for D&O members, whose loss experience has been much more favorable over the most recent five years. This is a reduction from the 5% declared for both excess liability and D & O last year. These D&O credits total $14.0 million. The details regarding specific D&O credits will be sent in the coming weeks to eligible members along with materials that describe how they can be applied to future premiums.
In these difficult times, we believe the modification of this year's continuity credit program, combined with the underwriting and investment initiatives we've put in place during the past several months will enable us to begin to restore policyholder surplus and continue to provide you with the lowest overall, long-term cost of risk. We will of course be reviewing the level of continuity credits with a fresh eye a year from now.
The Board has also approved $1.0 million in premium credits for members who renew coverages placed through AEGIS London, reflecting the slightly positive 2008 underwriting results at the Syndicate. This is a reduction from the $2.5 million granted in 2008. Now in its fifth year, the AEGIS London premium credit program allows eligible members utilizing our syndicate to share in the positive underwriting results of the operation. We will advise each participating member of their 2009 London credit, and provide a detailed description of the program definitions and guidelines via letter within the coming weeks.
Additionally, the Board has approved $3.5 million in premium credits for members who renew coverages placed through our domestic property program. This reduced level, from $6.5 million in 2008, reflects the significant decrease in total surplus and property losses during the 2008 property credit cycle. Now in its seventh year, the property premium credit program allows eligible members to share in the positive underwriting results of the operation. We will advise each participating member of their 2009 property credit, and provide a detailed description of the program definitions and guidelines via letter in the coming weeks.
At the end of last year, AEGIS members participated in an online survey about the coverage limits purchased by energy and utility companies. The Edison Electric Institute (EEI) requested our assistance in conducting the survey, and the results for electric companies were presented at the EEI's annual Risk Management Committee meeting in February. We've provided aggregated results for all electric and gas company respondents, which are posted on the password-protected area of AEGISlink. The aggregated results for other company operation types will be available upon request.
We plan to discuss the limits survey results in detail at the AEGIS Policyholders' Conference in July and we're exploring other topics for future member surveys as well. We appreciate the enthusiastic response to the limits survey and, based on requests from the large majority of AEGIS members who participated, we plan to conduct the survey annually.
As most of you know, we hold one-day meetings at convenient locations throughout the U.S. and Canada to provide you with an opportunity to tell us about the issues on your mind, what you need from AEGIS, and how we're doing. In each city, a small group of members and brokers meets with AEGIS senior management to discuss these topics as well as any new initiatives at AEGIS. Most attendees also find that these small meetings are conducive to comparing notes on risk management issues with other risk managers and brokers.
These regional meetings have been very well received over the past several years and now, during these dynamic times, this face to face communication is more important than ever. We also hope that these local, one-day meetings will help many member companies stretch their travel budgets. We're planning three meetings in May and one in October. Meetings are being held in Calgary and Seattle this week. Registration is now open for the next two meetings:
Since each meeting is a one-day event, most of you will be able to drive or fly between home and the meeting in your area on the same day. However, if you'd like to stay overnight, AEGIS will reimburse one person from each member company for one night's stay in the meeting hotel.
Please register now online for the Calgary, Seattle or Atlanta meetings. If you have any questions about the upcoming regional meetings, please contact Molly Lenz by e-mail or by phone at 201.508.2805.
Please register now for the next Claims Roundtable seminar - Investigating and Defending Fire and Explosion Cases - which will be held on May 14 in our East Rutherford offices and on June 4 in Chicago.
The faculty, who will include experienced in-house and outside litigation counsel and a nationally known forensic engineer, will discuss the important elements of the investigation and defense of a fire or explosion claim, starting with the incident scene itself. Discussion topics will include access to the scene, the proper documentation of a scene, preservation and spoliation of evidence, sampling and testing both on-site and off-site, identification of interested parties, identification of key evidence, and the presentation of expert testimony. Case studies of scene investigations will be presented for both gas and electrical incidents.
As always, you're welcome to attend AEGIS Claims Roundtables in person or by videoconference, and Continuing Legal Education (CLE) credits are offered. For more information about the AEGIS Roundtable program, please contact Jeff Schupack by e-mail or by phone at 201.508.2658.
Our annual AEGIS Policyholders' Conference will be held Monday, July 27 through Thursday, July 30 at the Westin Copley Place in Boston. Complete details and registration information will be sent via e-mail to eligible attendees in mid-May.
Conference registration is complimentary and attendees are invited to bring guests. AEGIS will reimburse one representative from each member company with a current AEGIS policy written through AEGIS in New Jersey for the cost of three nights' lodging at the Westin Copley Place.
If you have any questions about your eligibility, please contact Gil Gould by e-mail or by phone at 201.508.2790. Brokers must be connected with a current AEGIS member policy written through AEGIS in New Jersey in order to attend. If you have any questions about the conference, please contact Carrie White by e-mail or by phone at 201.508.2840.
A new Lessons Learned® video is now available to all AEGIS members with electric operations: Incident Response - Effective Communication and Coordination.
Proper communication and coordination between fire service commanders and electric utility first responders is essential at structure fires and other incidents. This video shows how the U.S. National Incident Command System can be used to encourage communication and coordination and to define the responsibilities of on-scene electric utility personnel.
A preview of Incident Response - Effective Communication and Coordination is available on our website. For more information or to request copies of the program, please contact Lucille Jackowski by e-mail or by phone at 201.508.2736.