doc2012 State of Telcom
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2012 State of Telcom
Because it has always been a matter of trust… p National Telcom Corporation The State of the Company p y A Proud and Secure Historyy and Future Presented by: Peter J. Elliott, CPCU President and CEO Because it has always been a matter of trust… Mission Statement p Our p purpose is to enable telecommunication businesses to manage their financial risk by means of industry-specific insurance and risk management solutions. We build value through the strength of our relationships with our family of insureds, the knowledge we have gained of the risks of the industry we serve, the coverage and claims advocacy we offer, and by consistently producing sound solutions that fit the needs of each of our customers. The end product of our efforts is the earned trust of our insureds. Because it has always been a matter of trust… Vision Statement “Aggressively pursue opportunities that will position (TIG) to be the premier direct writing insurance provider of coverage and risk management g services to all members in a cost effective manner for the benefit of our customers.” Because it has always been a matter of trust… Shareholders Cen-Ark Cellular, Inc. Central Arkansas Telephone Cooperative, Inc. Craw-Kan Telephone Cooperative, Inc. Etex Telephone Cooperative, Inc. Farmers Telephone Cooperative, Inc. Glenwood Telephone Company Hancock Rural Telephone Corporation Horry Telephone Cooperative, Inc. Industry Telephone Company KanOkla Telephone Association, Inc. Because it has always been a matter of trust… Shareholders Mid South Telecommunications Mid-South National Telecommunications Cooperative Association Panhandle Telephone Cooperative, Inc. Paul Bunyan Rural Telephone Cooperative Pembroke Telephone Cooperative Peoples Telecommunications, LLC Peoples Telephone Cooperative Cooperative, Inc. Inc Piedmont Rural Telephone Cooperative Pioneer Telephone Association, Inc. Pi n rT l ph n C p r ti In Pioneer Telephone Cooperative, Inc. Pioneer Telephone Cooperative Polar Communications Because it has always been a matter of trust… Shareholders p Telephone p p Corporation p Randolph Membership Riviera Telephone Company, Inc. Rock Port Telephone Company Santa Rosa Telephone p Cooperative, p , Inc. Scott County Telephone Cooperative, Inc. Skyline Telephone Membership Corporation Southwest Arkansas Telephone Cooperative Stanton Telecom, Inc. Star Telephone Membership Corporation Surry Telephone Membership Corporation Taylor Telephone Cooperative, Inc. Totelcom Communications, LLC Because it has always been a matter of trust… Shareholders Twin Lakes Telephone Cooperative Corporation West Carolina Rural Telephone Cooperative, Inc. West Kentucky Rural Telephone Cooperative Corporation Wiggins Telephone Association Wilkes Telephone Membership Corporation Yadkin Valley Telephone Membership Corporation Thank you for your support! Because it has always been a matter of trust… Directors Robbie L. Allen- Retiring Charles H. Creason, Jr. Loren L. Duerksen Peter J. Elliott F. Bradley Erwin Michael Hagg gg Raymond P. Henagan Leroy H. Lage Because it has always been a matter of trust… Directors George W. W Nostrand Edgar L. Olson Richard C. Parker-Vice Chair L Lonnie i D D. P Pedersen d Thomas E. Preston David E. Schultz Ri h d K Richard K. V Veach-Chair-Retiring h Ch i R i i Pending: Catherine Moyer & Bill Gaylean Thank you for your guidance! Because it has always been a matter of trust… Joyce Hermann “The The Herminator Herminator” CT, DE, ME, MD, MA, NH, NJ, NY, NC*, PA, RI, VT, VA* WV, VA*, WV FL, FL GA, GA SC, SC AL, AL TN TN, MS * These states are primarily served by Green and Wooten Insurance Agency with Joyce acting as a corporate contact Chris Jones “Resident of Texas” AR, AZ, KS, MO, NM, OK ,TX Because it has always been a matter of trust… g Hill “Now One of Us-ex NFU Employee” p y Greg CA, CO, ID, MT, NE, NV, UT, WY Kim Powell “ The Original-Now One of Usex NFU Employee” p y AK, OR, WA, LA, MN, ND, SD Because it has always been a matter of trust… Julie Gogel “Our Direct Line to Christmas” IL, IA, IN, KY, MI, OH,WI, Thank you for helping us grow! Because it has always been a matter of trust… Pete Elliott In addition to his corporate duties, he will b available be il bl tto all ll NTCA M Members mb r and nd all ll insureds. He looks to strengthen our relationship with the management and directorship of the companies. Because it has always been a matter of trust… Stock Investment Report …as of 12/31/2011 Active Shares - 1,496 Net Asset Value as of 12/31/2010 - $4,719 Unaudited Net Asset Value as of 12/31/11 - $4,868 *Th l are generated db i l report and dh di d The 12/31/11 results by an iinternall fi financial have not b been audited Because it has always been a matter of trust… State of the Insurance Industry 2011 Combined Ratio 111.5% estimated ISO 2010 Combined Ratio 102.4% as reported by ISO 2009 Combined Ratio 101% as reported by ISO * Rate of Return 5.8% 2008 Combined C bi d Ratio R i 105.1% 105 1% as reported d by b ISO 1959-2008 Average COR 104% as reported by ISO 2006-2007 2006 2007 was the last time where two years of underwriting profit, profit back-toback to back, have been earned. 2001-2004 was all positive but 2008-2011 was not positive. Credit risk, terrorism, asbestos, and coastal property are issues that still present challenges. *initial report by Fitch Because it has always been a matter of trust… State of the Insurance Industry 2012-2011 Rates and Premiums: MarketScout reports the composite rate for all lines of US property and casualty l b business i were +2% 2% as F February, b 2012 2012. In I 2011, 2011 rates fell f ll by b 2.25% annually. 2011 was the seventh year of a soft marketplace, which is excessive by industry standards. Because it has always been a matter of trust… State of the Insurance Industry 2012 Rates and Premiums: After seven years of a soft market for consumers and four years of continued unprofitable underwriting operations, the industry will, at a minimum, minimum hold-the-line hold the line on rates rates. Hold-the-line Hold the line means low single digit reductions or increases in rate. There maybe further deterioration when an account is profitable, but widespread, across th board, the b d reductions d ti are gone. A natural t l or man-made d di disaster t could raise rates, but there would need to be significance to the event. For Example: The BP oil spill was not significant enough to ff rates. affect Because it has always been a matter of trust… The Beginning - Serving NTCA Members • Formed in 1982 and domiciled in Vermont (VT) • 30th Year of being in business for NTCA Members • 8 Original Policyholders and 7 are still insureds! Owned by National Telecommunications Cooperative Association and 39 members 1st association captive and currently the 3rd overall captive in Vermont Because it has always been a matter of trust… Today Serving NTCA Members National Telcom Corporation - Serves 155 of 580 members (26.72% up from 25.51%) Developed Telcom Insurance Services Corporation in 1989 - Serves 257 of 580 (44.48%) ( ) Insureds in 41 states Because it has always been a matter of trust… p p Financials-A Snapshot of Operation Results Profit and Loss 2006 - $ 58,339 operational profit 2007 - $218,415 $218 415 operational profit 2008 - $404,995 operational profit 2009- $277,869 operational profit 2010- $179,091 $179 091 operational profit 2011- $100,000 estimated profit* Driven by TISC agency revenue and investment income *internal, unaudited financial projections Because it has always been a matter of trust… Then and Now Then and Now 2003- 80 cents for 1.55 oz Hershey Bar purchased at Quik (privately owned convenience store), Randolph NJ 2011- 95 cents for 1.55 oz., Acme supermarket, Randolph NJ 1806- Best dinner with pint of good beer or cider 37.5 37 5 cents Old Inns and Taverns in West Jersey 2011- Cuisine: American- Dinner Average Cost $24.00 Old River House Clinton NJ House-Clinton, Because it has always been a matter of trust… Then and Now 2004 Property Rate Coastal SC .134/100 of value 2011 Property Rate Coastal SC .146/100 of value 2004 General Liability Rate 3.924/1000 of payroll 2011 General Liabilityy Rate 3.360/1000 of payroll p y 2004 Flat Cost of Automobile Insurance $573/unit 2011 Flat Cost of Automobile Insurance $466/unit Because it has always been a matter of trust… Then and Now 2004 Property Rate TX .169/100 of value 2011 Property Rate TX .123/100 of value 2004 General Liability Rate 4.537/1000 of payroll 2011 General Liabilityy Rate 3.484/1000 of payroll p y 2004 Flat Cost of Automobile Insurance $590/unit 2011 Flat Cost of Automobile Insurance $453/unit Because it has always been a matter of trust… 2012: Looking Ahead OPPORTUNITY- op·por·tu·ni·ty advantageous chance: a chance, especially one that offers some kind of advantage favorable conditions: a combination of favorable circumstances or situations Because it has always been a matter of trust… 2012: Looking Ahead An Investment Opportunity that offers dividend return and premium relief for the group and the investor. There is an opportunity, a window of extremely favorable conditions that may never be better than at this moment in time, time but will be good regardless regardless, to move NTC from a Captive insurer to a Direct Insurer. Possibility P ibilit th thatt iinvestors t can receive i a 5% annuall di dividend id d and d 5% reduction in insurance cost. In 10 years, the face value of the investment will be returned and the investment is still in place and appreciating. Goal is to raise $10m. This is not a formal offer; formal legal offer and documentation is anticipated in 2012 Because it has always been a matter of trust… 2012: Looking Ahead p y of the In 2011, we launched a p personal lines insurance p products for employees telecommunications companies that belong to NTCA with MetLife. Products including home, automobile, boat, recreational vehicles, and umbrella will be written at a deviation of 30% off the standard rates for NTCA Members. Rating: A (Excellent) Financial Size Category: XIV ($1.5 Billion to $2 Billion) Outlook: Stable Action: Affirmed Effective Date: November 04, 2010 Growth of Cellular Handset Replacement Product called Stay Connected. Addition of Cellular Phone Recycling Program that removes old phones from piles of clutter and pays the customer and telco for any remaining value they have. It is through Wireless Alliance. Because it has always been a matter of trust… The Value of Family and Community There has always been an exclusive nature to the Telcom Insurance Group’s Program. The best products and services are only available to NTCA Members. In an effort to diversify and to take advantage of the expertise of staff, we engage the telecommunications industry as a whole and they have benefited from our involvement in their insurance and risk management programs. However, H they h could ld gain i even more if they h were NTCA members. This group receives exclusive benefits and are members of a community that no one else can belong to. Membership has advantages! Because it has always been a matter of trust… Thank yyou!!! Telcom Insurance Group 6301 Ivy Lane, Lane Suite 506 Greenbelt, MD 20770 800 222 4664 800.222.4664 www.TelcomInsGrp.com
