Thanks to the consistent strong support of our members and brokers, AEGIS has had a good restorative year. Our preliminary unaudited financial results for 2009 produced surplus growth to $860 million. The following is based on unaudited figures as of December 31, 2009:
Gross written premiums for the year of $1.11 billion were slightly better than anticipated as a result of strong support by our core membership. We are grateful to the members who understood the need to adjust rates and terms for the excess liability policy to better reflect the risk profile for the industry. AEGIS members also continued to support the mutual’s D&O and property programs during 2009 despite the availability of lower-priced alternatives in an oversupplied commercial market. Our London operations made a very strong, positive contribution to the 2009 underwriting results, as well.
Investment results were well ahead of plan and our total return for the year was $230 million or 7.3% – which was about 3.5% above our plan for 2009 and 14.9% above year-end results for 2008.
Current accident year losses were about what we expected and we were pleased that the year ended without any major hurricane or wildfire activity. The recent reserve review by our internal and external actuaries has confirmed that – with the exception of excess liability – all lines have been performing as expected or better. In the excess liability line, we increased our prior year reserves by about $130 million, which includes the large losses related to wildfires and stand-alone propane operations. During 2009, as you know, we took action to avoid similar wildfire losses in the future by lowering our limit, implementing an aggregate limit for wildfires and purchasing additional reinsurance. We also exited the independent propane business.
As a result of the foregoing, the Company’s total surplus grew by $102 million to $860 million at year end – an increase of 13% over 2008 – overall a very positive result given the excess liability challenges of recent years.
We also would like to report that Fitch Rating Agency announced today that it has updated its review and maintained AEGIS’ rating status of A-, although it is also continuing its negative rating watch “to allow additional time for the anticipated benefits of recent rate increases, more restrictive policy terms for selected exposures, and a reduction in membership continuity credits to flow through operating results.” Fitch favorably notes the progress AEGIS has made in 2009 and that continued improvement during the first half of 2010 would likely result in the removal of the negative watch.
Our complete, audited financial results will be published in our 2009 annual report in early April. AEGIS has emerged from the 2008 financial turmoil, is well on its way to restoring surplus and, in addition, now has an improved risk profile. We are in a very good position to continue to serve the membership in 2010 and we look forward to it.
AEGIS London is hosting its third annual European Energy Conference in Prague on April 14 and 15. Based on the successful format of the PHC, the two-day event attracted more than 120 energy risk managers and brokers from 22 countries last year and we expect strong attendance again in April. We are pleased with the steady growth of the Syndicate since its formation in 1999 as well as its emergence in recent years as a market leader on international energy, E&P, marine and property risks. In 2009, our London syndicate contributed a strong underwriting performance and its broad writings have helped add balance and stability to our overall operations.
Please mark your calendars now for the 2010 AEGIS Policyholders’ Conference which will be held July 26 through July 29 at the Hyatt Regency Denver at Colorado Convention Center.
Our annual conference is an important opportunity to share your thoughts with us, network with your peers, and learn about new developments in the industry and at AEGIS. More information about the PHC will be posted on the website as it becomes available and registration will open in May. For more information, please contact Carrie White by e-mail or by phone at 201.508.2840.
We also hope you'll join us for the 2010 AEGIS Claims Seminar which will be held October 25 to October 27 at the Loews Miami Beach Hotel.
The 2008 Seminar drew a record audience of 200 claims and litigation professionals from around the country who gathered to learn and share their experiences. Once again, we will focus on the important issues facing AEGIS members in the defense of their claims, including electric and gas case studies as well as other topics of interest to claims professionals and litigators for the utility industry. The seminar will be eligible for Continuing Legal Education (CLE) Credits.
Additional details about the Claims Seminar will be posted on the website as they become available and registration will open in August. For more information, please contact Brian Ekdahl by e-mail or by phone at 201.508.2643.
AEGIS Loss Control conducts workshops throughout the country that help member company personnel investigate incidents involving either electric or gas utilities. Workshop attendees learn about investigation objectives, interviews, evidence collection and other critical parts of the process.
Member company personnel from operations, compliance, claims, engineering and safety find the workshop content very useful and the programs are particularly beneficial for those who are responsible for field incident investigations.
Currently an electrical workshop is scheduled for April 14 and 15 at AEP in Columbus, OH. Natural gas workshops are scheduled for March 16 at SW Gas in Henderson, NV; May 18 at Ameren in Pawnee, IL; and October 19 at PSE in Bellevue, WA. Registration information for these workshops will be posted on our website approximately one month prior to the event.