Manager's Report 2005

A 10% Mutual Rebate to our policyholders is the story of the day.

Policyholders of PEI Mutual benefit by sharing in the Company’s profits through a "Mutual Rebate" which is given in years when the Company has good financial results. I am pleased to advise that we will be giving a "Mutual Rebate" of approximately $1,400,000 (10%) in 2006. A "Mutual Rebate" has been paid to our policyholders for 16 of the past 22 years. The total amount refunded to the policyholders in those 16 years was $15,365,000. This "Mutual Rebate" will be given as a discount at time of renewal.

In 2005 we experienced a reduction in claims giving us the best net claims experience since 1995. In the past 5 years we have been experiencing claims resulting from oil spills that have cost PEI Mutual approximately $1,000,000 each year. Since 2003 we have been working with our policy-holders to improve oil installations. In 2005 we have seen a reduction in oil spill claims – a positive sign that better installations will reduce claims.

In 2005 we introduced a new residential wording for seasonal or tenant occupied dwellings. This new wording brings in a number of improvements in coverage in a very attractive booklet which is laid out in a manner making it easier for policyholders to read.

Our rate changes in the past number of years have been minimal and there are no planned rate increases in 2006. Our income in past years has been sufficient to grow our surplus and keep the Company in the excellent financial standing it enjoys today.

We have a total of 12,800 policyholders who are receiving a residential claims free discount ranging from a low of a 10% discount for 5 years claims free and a high of 25% for 15 years claims free. This represents approximately 50% of our residential policyholders. The claims free discount is our way of rewarding policyholders who do not have residential claims. 

PEI Mutual Education Trust is very pleased to continue providing scholar-ships to Grade 12 graduating students across PEI. In 2005 we awarded 20 scholarships of $500 each. Our Education Trust was a centennial project in 1985 and since inception we have awarded 420 scholarships totaling $215,000.

As a corporate citizen, PEI Mutual is a consistent contributor to charities and organizations. We are aware of the fact that we are in business to ser-vice our policyholder’s insurance needs, but also recognize our responsibility as a corporate citizen of Prince Edward Island. We pay close attention to balancing our responsibility to both our policyholders and the community. The following is a testament of PEI Mutual’s commitment to community:

	Significant donation to all Island Hospitals on an annual basis for the past 19 years.
	One of three funding partners on an annual basis for PEI Special Olympics for the past 13 years.
	Major contributor to the past 3 capital campaigns at UPEI.
	Title sponsor for the Provincial Summer and Winter Games for the past 8 years.
	Corporate and Staff contributor to the United Way for the past 34 years.
	Provided funding to the Association of Exhibitions on an annual basis for the past 7 years. This donation is allocated to all the various exhibitions across PEI.
	Sponsorship of the Eric MacEwen show on CFCY radio for the past 4 years.
	Sponsorship of Community Showcase on Eastlink TV for 10 years.
	Published an Island Scenes calendar annually for the past 7 years. Amateur photos are obtained through a photo contest. We have print-ed 20,000 calendars annually and distributed them to our policyholders, schools, hospitals, manors and seniors housing.
	Annual donations to fire departments for the past 26 years.
	Annual donations to Sports PEI and The Sports Hall of Fame.

PEI Mutual has been a "Top 101 Company in Atlantic Canada " for the past 8 years, as awarded by Progress Corp.

PEI Mutual is an Island Company owned by its policyholders with its head office on PEI. Decisions are made promptly on PEI. We are in the business of providing service to our policyholders and it’s our goal to give excel-lent service in an efficient manner. I thank our agents and staff for their hard work in achieving this goal.

Thank you for choosing PEI Mutual as your insurance provider.


Terrence Shea
General Manager