77th Annual Statement Brochure (.pdf)

The close of 2007 marks the completion of six consecutive years of operating profits. Company assets hit an all-time high of $42,299,455 with Policyholders Surplus breaking above $15 million at $15,072,065. Sales were down 2.2%, an improvement from 2006’s decline of 6.2%, while the number of policies increased a very modest 2%.
The year began with unusually strong January underwriting profits. From there, business turned sour. By the end of the first quarter, we had recorded three automobile-related deaths and the underwriting results had turned negative. The severe automobile losses of the first quarter foreshadowed just how sour business could get. By the end of the third quarter the combined ratio had reached its peak of 118.0% with all twenty severe automobile claims recorded including seven deaths for a total incurred loss of $5.2 million.

To sour the business even more, on June 7, 2007, a powerful storm traversed Wood county, specifically the city and surrounding area of Wisconsin Rapids, WI, spawning tornados and baseball-size hail. In the wake of this catastrophe Partners Mutual received 516 claims for a total incurred loss of $3.89 million. One home was lost to a tornado and the remaining claims were mostly hail damaged vehicles and buildings. June 2007 was the worst underwriting loss in company history with a combined ratio of 179.9%.

This storm was a great opportunity for Partners Mutual to live up to its motto, “. . . where better service matters.” Our adjusting staff put in extra hours making sure claims were processed in a timely manner. Some of our adjusting staff traveled to Wisconsin Rapids. They viewed damaged vehicles and paid for covered losses immediately.

When the fourth quarter arrived, the worst was over. Business sweetened and each successive month of the fourth quarter had greater underwriting profits. December’s underwriting profit reduced the statutory combined ratio to 104.1%, low enough for investment and other income to convert the pending operating loss to a 2007 operating profit.

The company continues to focus on its motto by investing heavily on an internet-based agency toolkit call Partners Agency Link (PAL). During 2007 PAL was expanded to include functions whereby agents can quote and submit Businessowners, Contractors Busienssowners, and Commercial Automobile business; inquire on policies, billings, and claims; and make premium payments in the agency office. Additional functions will be added to PAL making Partners Mutual easier to do business with, improve transaction accuracy, and reduce transaction cycle times.

Our 77th annual statement shows 2007 was another profitable year making Partners Mutual Insurance Company financially stronger and well positioned to grow profitably in 2008.

Sincerely,

Richard C. Ewert, CPCU, CIC
PRESIDENT & CEO