I am deeply saddened to have to tell you that our colleague and good friend, Jack Denman, passed away over the weekend.
As many of you know, Jack has been the Chief Financial Officer of AEGIS for many years. He was hired by Chairman Bob Fortune in 1987. He worked with Bob, Bernie Kennedy, Wes von Schack and me over the years helping guide AEGIS through many financial challenges. Jack was a brilliant man who was truly devoted to AEGIS. He has been my right hand for the past eighteen years.
Jack may have seemed tough or gruff to many, but we all knew he had a big heart. He was a great mentor to many in all divisions of the company, not just Accounting. Jack came from a large, tight-knit family, all of whom he would joke and complain about, but all of whom he loved dearly. And it seems he treated his AEGIS family the same way.
We are pleased to report that things have gone financially well for AEGIS since we were together at the Policyholders’ Conference. Our unaudited third quarter 2014 financial results show total surplus at September 30 at $1.206 billion, an increase of $50 million over year-end 2013. This growth is slightly ahead of plan partly due to investment returns of 2.9%, which is 90 basis points ahead of plan. Gross written premiums were strong, totaling $968 million, which is $5 million ahead of expectations for the third quarter, and $54 million higher than the same period last year. Our overall combined ratio is 96%, a satisfying result attributable in part to favorable runoff of prior year loss reserves. This is comprised of a 102% combined ratio for our U.S. operations and a 91% ratio for our London operations.
We are pleased to welcome three new directors to the AEGIS Board of Directors. You may recall that two of our longest-serving Board members, Tom Capps and Bill Grigg, announced that they would not stand for re-election at our most recent Board meeting. We thank Tom and Bill for the significant contributions they’ve made to the success of AEGIS over the years, and welcome our three newest directors:
Gregory E. Abel is the Chairman, President and CEO of Berkshire Hathaway Energy, formerly MidAmerican Energy Holdings Company. Greg joined the company in 1992 and held a variety of executive positions before becoming Chairman. In addition to his responsibilities on the AEGIS Board, he will serve on the Board’s Claims Committee.
Thomas F. Farrell II is the Chairman, President & CEO of Dominion Resources. Tom joined Dominion in 1995 and has served as an officer of Dominion and many of its subsidiaries before becoming Chairman in 2007. In addition to his responsibilities on the AEGIS Board, Tom will serve on the Board’s Claims Committee.
Christopher P. Johns is the President of Pacific Gas and Electric. Chris joined PG&E in 1996 as Vice President and Controller. He was elected Chief Financial Officer in 2005 and named President in 2009. Before joining PG&E, he was a partner at KPMG. In addition to his responsibilities on the Board, Chris will serve on the Board’s Audit & Finance Committee.
We welcome Greg, Tom and Chris to the Board and look forward to working with them.
Recognizing the growing importance of enterprise risk management (ERM) to the membership, we recently formed a task force of ERM professionals from ten member companies to help us gain a deeper understanding of the ERM issues utilities face. The goals of the ERM Task Force are to advise AEGIS on ERM-related matters, identify ERM trends that affect the energy industry, promote the development and sharing of ERM information to benefit the membership, and work to help educate AEGIS members on ERM issues. The first meeting of the task force was held in our East Rutherford offices a few weeks ago, and we look forward to distilling our initial findings and agreeing to next steps with the task force shortly. In the meantime, please contact George Keefe, Senior Vice President – Member Relations, by e-mail or by phone at 201.508.2797 with any questions or comments.
We held asuccessful regional member and broker meeting last week in Chicago which was attended by 27 AEGIS members and brokers. The discussion included a detailed update from AEGIS senior management and covered a wide range of energy and insurance related topics.
You may register now for the next two regional meetings, which will be held in Atlanta on Thursday, December 11 and in Dallas on Wednesday, January 14.
Our regional meetings give you an opportunity to tell us about the issues on your mind, what you need from AEGIS, and how we’re doing. They are also an ideal way to further involve your risk management and finance colleagues with your company’s insurance program, discuss current energy and insurance issues, and learn more about your mutual. At these meetings, small groups of members and brokers meet with AEGIS senior management to discuss these topics as well as any new initiatives at AEGIS. We’ll also answer any questions you may have. Most attendees find that these small meetings are conducive to comparing notes and networking with other risk managers and brokers. Please come prepared to discuss risk management issues, general insurance market conditions, cyber risk, enterprise risk management and other current topics.
Each meeting is a one-day event and you should be able to drive or fly between home and the meeting on the same day. However, if you need to stay overnight, AEGIS will reimburse one person from each member company for one night’s stay in the meeting hotel. We look forward to seeing you!
More than 170 claims professionals representing 66 AEGIS member companies gathered in Miami late last month for the biennial AEGIS Claims Seminar. Topics included gas and electric case studies, electrical burn injuries, natural gas-related incidents, pole hits, defending and minimizing medical damages, settlement economics and the Affordable Care Act, neutralizing plaintiffs’ experts, liability Medicare set-asides, and an energy industry update. The presentations were very well received, and 96% of the attendees rated the seminar as “outstanding” or “exceeds expectations”.
Many of the AEGIS Claims Seminar presentations are posted in the password-protected section of the AEGIS website. Please contact Mark Bluestein, Vice President – Claims, by e-mail or by phone at 201.508.2635 with any questions or comments.
Beginning in December, and continuing throughout 2015, AEGIS Loss Control will broadcast a one-hour webinar each month that will focus on a topic related to electric and natural gas utility inspections, maintenance or safety programs. Subject matter experts from AEGIS member companies and AEGIS Loss Control professionals will lead these live events and answer your questions in real time. Each webinar will be recorded and posted to the AEGIS Loss Control area of our website for viewing at later dates.
Please register now for the webinar on Friday, December 5, which will cover electric substation physical security measures. Participants will learn about options for hardening the substation perimeter, including enhanced security fencing, anti-ram barriers and ballistic protection. The webinar will also cover new technology used to detect removal of grounding infrastructure from a substation site and provide remote alarms that help minimize the safety, operational, and service reliability impacts of copper theft and unauthorized entry. The webinar is scheduled from 1:00 pm to 2:00 pm, Eastern Standard Time.
One week prior to the webinar, you will receive instructions for participating. If you have any questions in the meantime, please contact Michelle Battagliese by e-mail or by phone at 201.508.2855 or Hatice Aci by e-mail or by phone at 201.508.2737.
In 2015, the monthly webinar topics will include:
• Atmospheric Corrosion Mitigation
• OSHA Work Rule Changes
• Safety Issues – Roof Top Solar Panels
• Gas Control Center Security
• LNG Plant Security
• CIP-14 Standards
• Using Drones To Patrol Electric Transmission Lines
• First Responder Accountabilities and Concerns
• Call Center – Emergency Call Handling
• Natural Gas System – Leak Survey Technology
• Utility Contractor Pre-Qualifications
Details will be posted on our website as they become available. If you have any questions about the new monthly AEGIS Loss Control webinars, please contact Howard Somers, Vice President – Loss Control, by e-mail or by phone at 201.508.2734.