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April 29, 2016

AEGIS annual report and first quarter results

By now you should have received our 2015 annual report which describes the audited financial results, as well as the best underwriting results we’ve had in 28 years.  Our bottom-line measure of financial success is policyholder surplus growth, and we grew surplus by $68 million, to $1.290 billion, a new high for AEGIS.  Since the financial crisis in 2008, we have grown surplus by $532 million, thanks to strong support from our members and brokers at renewals and a contribution of almost $300 million from our successful AEGIS London operations.  The theme of this year’s annual report is “Pointing in the Right Direction” which summarizes the reasons your Company is better prepared than ever to fulfill its mission for you in the future, including our financial strength, refreshed strategy, products and services, member-focused culture, people, infrastructure, and support from our members, brokers and Board of Directors.  The 2015 annual report is posted to our website and you can request printed copies at

Our unaudited results for first quarter 2016 show a satisfactory bottom-line result, with surplus growing $29 million over year-end.  Member and broker support remained strong, however gross written premiums were down $8 million due to competitive pressures in the London market.  Our overall losses for the first quarter were essentially in line with what we expected.  Finally, with more favorable investment market conditions in March, the portfolio produced a positive 1.2% total return, which was 60 basis points above plan.   

Member credits for 2016 – 2017 – Excess Liability credit restored

We use our member credit programs to help maintain a balance between the lowest long-term cost of risk for members and the financial strength of the mutual.  We work closely with our members and brokers to collect enough premium to fund the losses of the membership, promote measured surplus growth and maintain our financial strength ratings. With a long-term history of solid financial results, we've been able to maintain this balance and return more than $1 billion to our eligible members in credits of one kind or another.

Our overall financial results were positive in 2015 and our overall combined ratio for U.S. and London operations was a very satisfactory 81%.  Most importantly, after years of persistently high ratios, the current policy year combined ratio for our flagship excess liability business was 90% in 2015, and 93% for the most recent three-policy-year period.  Based on these favorable underwriting results, and taking into account the disappointing recent returns (and low forecasts) for our investment portfolio, the Board of Directors believes it will be prudent to manage the member credit programs for the 2016 − 2017 year as follows:

  • The excess liability business has trended favorably in recent years to the point where the member credit for excess liability will be reinstated at a declared rate of 3%.

  • The D&O underwriting results and contribution to surplus continue to be positive.  Based on these trends, the D&O credit will remain at its current declared rate of 3%. 

  • The property credit will remain at $2 million. While the loss experience was favorable in 2015, the losses associated with Superstorm Sandy that emerged in 2013 and two particularly large property claims in 2014 still have a negative effect on the longer-term results.

  • The AEGIS London credit will remain unchanged at $1.0 million.

The specific details that describe the individual credit amounts and how they can be applied to future renewals for your Excess Liability, D&O and AEGIS London renewals will be mailed within the next few weeks.  Those eligible for the property credits will receive notices later this summer.  If you have any questions about the credit programs, please contact George Keefe, Senior Vice President – Member Relations, by e-mail or at 201.508.2797.

2016 AEGIS Policyholders' Conference – July 25 to July 28 – registration opens soon

Registration will open before the end of May for PHC 2016, which will be held Monday, July 25 to Thursday, July 28, at the Westin Boston Waterfront, located in the up-and-coming Seaport District overlooking Boston Harbor.
We're hard at work on the conference agenda, which will include the annual management report, as well as sessions covering the topics you‘ve requested most often, including the evolving use of drones in the energy industry, cyber risk management, ERM, the new alliance with Everest, and contractual risk transfer.  Bob Hartwig, President of The Insurance Information Institute, will join us again to present his popular overview of current economic and insurance market conditions, which always provides a useful context for other conference presentations and discussions.
 We will also host an AEGIS 101 Lunch and Learn for members and brokers who are new to AEGIS on Tuesday, July 26. There will be an open-mic period during which newcomers can ask any questions about AEGIS, and the informal lunch setting will encourage valuable networking.
Boston is one of the most popular PHC destinations, and we will take full advantage of the summer months in New England with the tours, activities and receptions we’re planning.  If you’re interested in spending vacation time in Boston, Cape Cod and the Islands, or Maine, we encourage you to make arrangements now because July and August are the peak season.  We look forward to seeing you, your families and guests in Boston for PHC 2016!

Monthly webinar – Measuring the Effectiveness of Public Safety Awareness Programs – May 4 – register now

Please register now for the next in the series of monthly webinars conducted by AEGIS Loss Control – Measuring the Effectiveness of Public Safety Awareness Programs – which will be held on Wednesday, May 4, from 1:00 pm to 2:00 pm, Eastern Daylight Time.

Across the nation, utilities are actively building cultures of safety and awareness — and they can prove it to regulators and management through effectiveness metrics and reporting.

This webinar, Measuring the Effectiveness of Public Safety Awareness Programs, will provide an overview of a methodology for measuring public safety outreach programs, drawing upon nationwide benchmarks and addressing such key issues as:

  • How to demonstrate the effectiveness of your public safety campaign

  • How to identify short- and long-term success metrics

  • How to share your results with regulators, business partners and other business units across your enterprise

The webinar will be presented by Amy Rosenkrantz, an Account Manager at Culver Company.  Culver Company has been providing public safety strategies to utilities for 38 years and works with more than 1,000 utilities each year.  Amy currently manages public safety outreach for investor-owned utilities in 22 states. 

On the morning of the webinar, you will receive a reminder and 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.

If you have any questions about the monthly AEGIS Loss Control webinars, please contact Scot Macomber, Vice President – Loss Control Utility Operations, by e-mail or by phone at 201.508.2739.

Claims Roundtable – Settlement and Negotiation – June 9 – register now

Please register now for the next AEGIS Claims Roundtable seminar – Settlement and Negotiation – which will be held on Thursday, June 9, in East Rutherford, NJ and offered as a concurrent, real-time webinar on June 9.

How can you achieve the best settlement resolution for your company? Many times, cases settle for higher values than expected. Skillful negotiation strategies and techniques will save your company time and money. Hone your negotiation skills by hearing from our faculty of experienced in-house and outside litigation counsel, who will share their experiences in using a variety of negotiation techniques to achieve the best results. The discussion will include the importance of creativity and flexibility, keeping the focus on key issues, setting the groundwork for successful negotiation, and problem solving to reach a reasonable settlement.

As always, Continuing Legal Education (CLE) credits are offered.

If you register for the webinar, you will receive instructions for participating one week prior. If you have any questions about the webinar in the meantime, please contact Sharon Sarch by e-mail or by phone at 201.508.2654. For more information about the AEGIS Claims Roundtable program, please contact Jeff Schupack, Senior Vice President – Claims, by e-mail or by phone at 201.508.2658.

2016 AEGIS Claims Seminar – save the date

Please save the date for the 2016 AEGIS Claims Seminar which will be held Monday, October 17 through Wednesday, October 19, at the Hyatt Regency Scottsdale Resort & Spa at Gainey Ranch in Scottsdale, Arizona.

In 2014, the AEGIS Claims Seminar attracted more than 175 claims and litigation professionals from around the country who gathered to share their experiences and learn more about the important issues facing AEGIS members in the defense of their claims. In addition to the always popular gas and electric case studies, an impressive group of industry litigators and experts will share their insights on a wide variety of topics, including:

• The mechanics of brain injuries
• Combating the “reptile theory”
• Directional drilling incidents
• Drafting and enforcing indemnification provisions
• Termination of service exposure
• Effective use of structured settlements
• Emerging industry risks

The seminar will be eligible for Continuing Legal Education (CLE) credits.

AEGIS will sponsor a reception for all attendees on Tuesday evening at the Hyatt Regency Scottsdale and The AEGIS Structured Settlements Company (TASSC), in conjunction with its partners at EPS Settlements and Mesirow Financial, will sponsor a golf outing on Wednesday afternoon.

Surrounded by the beautiful and dramatic Sonoran Desert, the Hyatt Regency Scottsdale Resort & Spa at Gainey Ranch is conveniently located just 18 miles from Phoenix Sky Harbor International Airport.

Please do not contact the hotel to make room reservations. We are holding a block of rooms for all seminar attendees and they can be reserved as part of the seminar registration process that will begin in early August. Registration will be limited to AEGIS members, members’ dedicated outside counsel and members’ brokers. The registration fee for the 2016 AEGIS Claims Seminar is $250.

For more information, please contact Mark Bluestein, Vice President/Counsel, by e-mail or by phone at 201.508.2635.