Some of you may have seen that today Fitch has placed the "A- (Strong)" insurer financial strength rating of AEGIS on "Rating Watch Negative." This is the culmination of our fairly extensive dialogue with Fitch over the last several weeks. Obviously, they are concerned about the $300 million loss in surplus that we have previously discussed with you as well as the magnitude of underwriting losses in recent years. I think all of us understand and share their concerns in that regard.
We spent a good deal of time explaining to Fitch the various steps we have taken since November 2008 to reduce capital stress going forward, to improve our underwriting profitability and to restore surplus (all as I have previously outlined to you in my earlier emails). In their press release, Fitch mentions these ongoing efforts and notes very positively that our total surplus increased 4% to $790 million (unaudited) and that the company's operating performance has improved during the first four months of 2009. They very much agreed with the appropriateness of the various measures we are taking to improve overall operating performance as well as to curb future surplus volatility. They were also encouraged to hear of the excellent member and broker support that we have enjoyed over the first four months of the year. They have agreed that it makes sense for them to continue to follow our progress with our 2009 business plan as the year unfolds before instituting any rating action beyond the "Negative Watch" issued today. I am confident that with your continued support our 2009 strategy will be successful in helping restore lost surplus and steering AEGIS toward improved operating ratios. We believe this will not only aid in our ongoing efforts to meet Members' needs, but also will help satisfy rating agency concerns.
I look forward to discussing all of these issues with you in detail when we get together next month at the Policyholders' Conference.
We're pleased to report that A.M. Best has affirmed its rating of A (Excellent) and issuer credit rating (ICR) of "a+" to AEGIS Energy Syndicate 1225. The outlook for both ratings remains stable. In its report, A.M. Best credited our diversification strategy which manages catastrophe exposures on energy accounts and balances the more volatile risks of the energy and utility sector with writings in other areas such as non-marine property.
Over the years we have developed our Loss Control capabilities to provide loss control services to you as well as to assist our underwriters as they evaluate each member's unique risk profile. With the inception of our property program we expanded our engineering resources to help our underwriting team evaluate different types of facilities and equipment and we've made these same professional services available to you on a "for fee" basis.
This year we are reviewing our loss control operations from top to bottom. We want to make sure that the services we provide are the ones that you find most useful. We also want to make sure that we visit your facilities frequently enough to be able to effectively evaluate how your risks and loss control efforts are evolving. We believe the information developed from these loss control assessments should be a prime differentiator of risk as we underwrite and rate your insurance placements with AEGIS.
As a first step, we are going to ask you to complete a survey that will give you the opportunity to register your opinion on your loss control interactions with AEGIS. This questionnaire is the joint effort of a special task force commissioned at our most recent RMAC meeting. The task force includes members from each of our three advisory committees including RMAC, loss control and claims professionals. You will receive the survey in your email next week and we would like you to return your responses by June 30th. It should take only a few minutes to complete.
We plan to review the results with you at the Policyholders' Conference and we think this should be interesting for all of us. In the coming months we will use these results in our deliberations with the task force members to make sure that our loss control efforts are appropriately integrated into our underwriting and rating processes. We hope you will share with us any thoughts you have on these subjects in the survey and as the year progresses.
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 were sent to eligible attendees via e-mail on May 20.
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.
We look forward to seeing you in Boston for another informative and productive conference.
At our recent regional member and broker meeting in Seattle, there was an important discussion about an issue requiring the immediate attention of many member companies – the mandatory Medicare reporting requirements on liability insurance (including self-insurance), workers' compensation and no-fault insurance, each individually referred to as a Responsible Reporting Entity ("RRE"). Failure to comply with these reporting requirements can result in a civil penalty of $1,000 per day per claim.
More than 150 people at 60 member companies participated in our recent Contractual Risk Transfer webinar. Based on the high level of interest in the topic, we posted the slides and audio in the password-protected section of our website. We also hope to cover this topic in depth at the AEGIS Policyholders' Conference during the AEGIS Primer session on Tuesday, July 28.