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CIG
AN NU AL RE PO RT
COMING 2021 TOGETHER
Inside 1 What We Can Achieve Together 2 What Coming Together Means to Me 4 Meeting Success with Your Support 6 Successfully Reaping What We Sow 7 Personal Progress 8 Where It All Comes Together 9 Together When You Need Us 10 Attracting and Retaining Our Greatest Asset: People 11 CIG Is a Great Place to Work 11 Leading Us Together 12 Moving Forward Together
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What We Can Achieve Together Wash, rinse, repeat. That is what much of 2021 felt like, particularly in relation to 2020. Businesses were open, and then they closed again. Masks were coming off, and then going back on again. This topsy-turvy activity had most folks weary by the end of the year. However, there was one thing that did change in 2021 that had a wonderful impact on many: our ability to come together. Together is the theme of this year’s annual report because it was such a meaningful change from the nearly two years of separation. I’m speaking of togetherness for our employees as well as our outstanding agency partners. In 2021 we kept our offices open, enabling staff to collaborate and – most importantly – to socialize, which many people missed. We were also able to hold important meetings to discuss the actions needed to keep CIG moving forward. With in-person discussion, debate, and collaboration, our teams made much better decisions than they would have in a virtual setting. Also, in November, we moved to a new office in Monterey after many years on Garden Road. While we didn’t have the grand opening we originally envisioned, it was wonderful to spend time together with so many team members. Equally as exciting, we had the opportunity to spend time face to face with our agency partners again. We, myself included, traveled and met with many agents and often heard, “You’re the first carrier to come out and meet with us.” This demonstrates how much we value these relationships, and our commitment to maintaining these partnerships through the toughest of times, as well as how meaningful we are to you because you took the time to meet with us. For this, we are truly humbled and grateful. Throughout the industry, only a few carrier events were able to take place in 2021. CIG was able to honor our top-performing agencies at the CIG Private Reserve Invitational in September. For those who attended, I truly hope you had a great time as I know CIG staff appreciated the opportunity to share a few days with you. Our goal is to have more agency-related events in 2022, and planning is underway. We look forward to the time when we can return to our regular in-person interactions. Over the summer, we participated in our first Great Place to Work® survey. I was honored when the results came back, and I learned that we met the rigorous threshold to be certified as a Great Place to Work®. While it was unexpected for an inaugural survey, it was humbling and tremendously gratifying. Going forward, we are committed to making CIG the Greatest Place to Work. This year, we were once again recognized by AM Best, who affirmed our A (Excellent) rating and stable outlook. This recognizes the important work we have done together over the past several years and the valuable relationship we have with Auto-Owners, giving you the confidence to know we will be here when you need us, now and in the future. Another outcome that exemplifies the importance of togetherness is our financial results. We are ecstatic about how 2021 ended. For the year, we grew our top line by 7.4% and finished the year with a combined ratio of 97.0%, a result CIG has not seen in nearly a decade. The most significant benefit was the $40.7 million (+12.6%) of policyholder surplus growth. This improved the financial strength of CIG even further, giving you and your clients added confidence in our ability to deliver on our commitments. Inside this report, you will find additional commentary from CIG staff regarding the meaning of coming together and the impact this had on them in 2021. I am so grateful to be part of such a wonderful team. May these words of togetherness resonate with you, and may you continue to experience the importance and value you bring to CIG. Here is to looking forward to more time together as we continue to do great things for the families, farms, and businesses in the communities we serve.
Andrew J. Doll
President & CEO
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What Coming Together Means to Me
Andrew J. Doll, FCAS
Michael Ackerman, CPCU, CLU
People remain the most important component of CIG’s success. The way we create the greatest success is through strong and trusting relationships with our employees, agents, and policyholders. For me, the best way to develop these is through direct, personal interaction. Our opportunities to be together for discussions, collaborations, negotiations, and even socialization, promotes the highest levels of understanding, alignment, and trust. This has never been more apparent than when “together” was taken away. As the saying goes, absence makes the heart grow fonder. For me, the obstacles that kept us apart have strengthened my resolve to find more ways to be together.
In 2021 our IT, Data, and Communications teams came together to accomplish some really great things. The IT Team came together with months of planning and preparation to complete one of the biggest, most challenging tasks of the year: relocating our data center to our new office in Monterey. This was a monumental and memorable accomplishment for IT and for CIG! The Data Team worked together to move our legacy data sources to a new cloud-based data stack. These moves mean faster and more reliable data for our teams and our agents. Our Communications Team kept us informed with monthly videos from leadership, quarterly updates on our key initiatives, and weekly newsletters. They also help keep our agents informed with agency videos, Eagle alerts, and the quarterly CIG Agency Connection newsletter. I am so proud of the way our teams came together to accomplish so many remarkable things this past year, and I look forward to what we can accomplish together in 2022.
President & CEO
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Vice President & Chief Information Officer
Kurt Morgan, CPCU Assistant Vice President, Strategy & Innovation
Ryunosuke Satoro, the celebrated Japanese writer of the early 20th century, wrote “Individually, we are one drop. Together, we are an ocean.” The power of the individual, if fearless and focused, is formidable, but the power of many working together is unstoppable. In 2021 CIG came together to overcome many obstacles outside of our control. We not only found ways to maintain, but also to improve how we work together in difficult environments. When collaboration was required, we came together face to face and got the job done – as we will do in 2022 and beyond.
Daniel Moskala, FCAS, CPCU Assistant Vice President, Actuarial & Analytics
For most of us, working remotely has become the norm. Now that we have experienced two years of the pandemic, it’s a real treat when we get to come together and work in person. It is with great anticipation that I look forward to such times when we can collaborate on ideas, plans, and projects together. There is just no substitute for meeting face to face.
Read more thoughts on Coming Together throughout this report > 3
Meeting Success with Your Support At the start of 2021, we, like the entire world, were all hoping to get back to business as usual. While this was not in the cards, we did find ourselves with a strong hand to play just the same. We were in a great position to keep our momentum going as our teams continued to perfect and execute our approach of engaging our agencies virtually. The new business writings and our profitability results stand as a testament to the cards we already held in our hands, and you, our independent agencies, were our ace-in-the-hole. Overall, in 2021 CIG remained focused on providing extra service and attention to help our agencies achieve and surpass their goals.
New Business 2021
Written Premium 2021
Arizona
$6.5 million
$16.5 million
California
$29.0 million
$319.6 million
Nevada
$3.4 million
$18.2 million
Oregon
$3.1 million
$18.9 million
Washington
$7.0 million
$50.7 million
Agriculture
New Business $5.2 million
Written Premium $38.3 million
Personal
New Business $6.8 million
Written Premium $149.8 million
Commercial
New Business $37.1 million
Written Premium $235.8 million
John La Porta
Assistant Vice President, Sales & Marketing In 2021, we had the opportunity to have several face-to-face sales meetings. The outpouring of support and appreciation for these interactions has been overwhelming from both agencies and our field staff. Being together reinforced why we do what we do: helping our insureds protect their assets, making a difference in their lives, and building long-term relationships! The Leadership team came together to discuss key initiatives focused on improving the agency experience with CIG. Sure, we could have attempted to do this virtually, but the synergies, energy, and interaction would not have compared to what we accomplished together!
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Successfully Reaping What We Sow Going into 2021, our goal was to achieve profitable growth. We knew we would be challenged from a number of different angles, but we were confident in our ability to exceed the company growth goal. Uplifted by a phenomenal year for our Commercial and Ag Lines, we far surpassed our expectations. To achieve our profitability results, we focused on training, underwriting discipline, and adherence to managing our catastrophe exposures.
• Achieved overall Commercial Lines growth of 7.8% • Achieved overall Ag Lines growth of 10.4% • Improved our combined ratio for Commercial Lines to 98.5% • Improved our combined ratio for Ag Lines to 94.3% • Wrote over $42.0 million in new Commercial and Ag business • Conducted over 3,500 loss-control inspections on Commercial and Ag properties Kevin Okelberry
Vice President & Chief Underwriting Officer I think that we are at our best as a company when we are all working together to achieve a common goal. After the success we had in 2020, we wanted to build upon that by achieving an underwriting profit in 2021. With this common goal in mind, I believe new and fresh ideas were able to bubble up to the surface that otherwise would not have happened.
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Personal Progress For our Personal Lines business, in addition to an outstanding combined ratio, 2021 will be remembered for many things. In the first half of the year, we saw slight improvements in retention and new business over 2020. In the second half of 2021, we saw retention approaching the 90% range, which is a number our company and our agents are more accustomed to seeing. Though we fell slightly short of our premium target, the trajectory for CIG is extremely positive! As shared in the 2021 CIG Virtual Roadshow video, we are focused on four key areas, starting with the customer experience. During the year, our service levels and turnaround times improved significantly. We implemented, and will continue to implement, actions, processes, and technology that make CIG the favorite choice for agents and consumers.
• Personal Lines achieved a combined ratio of 95.3% • New business production increased 15% and retention went up two full points in the second half of the year
“ Thank you so much for getting this finished. I’m reading your email and the tears are flowing. This has been a long three-year challenge and brings a closure I so needed. There is still work to be done, but it’s a new chapter for us. You and your company are heroes to us.” – Gretchen, Homeowner
• Nearly 25% of our agencies saw Personal Lines growth Scott Cummins
Assistant Vice President, Personal Lines I couldn’t be prouder of the folks in Personal Lines and everyone at CIG who came together to further our commitment to the agents and communities we are privileged to serve. Seeing an organization like ours pull together to meet challenges and overcome obstacles is a testament to the culture we are creating at CIG.
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Where It All Comes Together CIG Financial Highlights Years Ended December 31: Operating Results: Gross premiums written Net premiums written Net premiums earned Net income (loss) Balance Sheet (Year-End): Total cash and investments Total assets Total liabilities Shareholders’ equity Key Metrics: Loss & loss adjustment expenses ratio Expense ratio P&C combined ratio
2019
2020
2021
(Dollars in Thousands) Current Year Current Year Change ($) Change (%)
$430,340 $383,626 $382,722 $(27,516)
$434,837 $400,223 $392,294 $18,509
$447,412 $429,846 $422,420 $29,027
$12,575 $29,623 $30,126 $10,519
2.9% 7.4% 7.7% 56.8%
$779,337 $899,147 $607,239 $291,908
$860,775 $985,080 $662,259 $322,821
$940,340 $1,063,358 $699,871 $363,487
$79,565 $78,278 $37,612 $40,666
9.2% 7.9% 5.7% 12.6%
79.2%
66.5%
63.7%
34.0% 113.1%
34.5% 101.0%
33.3% 97.0%
Robert Zic, CPA
Chief Financial Officer & Treasurer As the complexity of our product lines grows, so do our reporting requirements. Gathering all this information for various audiences, such as Auto-Owners, our external auditors, and various government regulatory agencies, requires true teamwork. Over the past year, although we had limited opportunities for face-to-face interactions, our team came together to provide financial leadership as well as deliver the critical reports upon which so many of our partners and regulatory agencies rely, on time and with the greatest accuracy.
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Together When You Need us As the world vacillated between opening and closing in 2021, the Claims department continued to provide outstanding service to our insureds and our agents. For the Claims teams, it was business as usual. We were not able to shelter in place because our customers needed us. We handled 14,541 claims for our insureds and successfully closed 14,659. With no significant catastrophic events impacting CIG in 2021, we were able to finalize 95% of the claims arising out of prior year wildfires and received very positive feedback and accolades from our insureds.
“ Thanks for all your help through these tough times for our business.” – Rodeway Inn
In addition, we embarked on a claims modernization project that spanned all of 2021 and will go live in 2022. This is a large project that requires many groups (IT, Strategy, Claims, Finance, and Actuarial & Analytics) to come together to bring this project to fruition. When complete, this project will provide faster, more accurate, and more efficient claims processing for our agents and policyholders.
“ I honestly was shocked at how fast & caring you guys were. You took care of everything!”
As we carry on into 2022, CIG will continue to provide the fast, personal service that our policyholders have come to expect from us. By making these improvements to our internal systems, the customer and agent experience with CIG will get better with each project we complete.
“ From start to finish CIG handled everything in a completely professional and thorough manner.”
– The Edward Joseph McCarthy Inter Vivos
– Nick Patel
Cynthia Mehrtens, CPCU, AIM, ARe, ARM Vice President & Chief Claims Officer
In 2021, we came together as a team to solve problems and collaborate, whether it was wrestling with supply chain issues, handling vendor service issues, or overcoming court closures. We were also able to get together in groups and return some folks back to the office. All of us realized how much stronger we are and how much more we can accomplish when we take on challenges as a unified team.
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Attracting and Retaining Our Greatest Asset: People CIG provides our agents and policyholders with the best products and highest quality service possible by developing and maintaining highly skilled staff. During 2021 the CIG Human Resources team came together, resulting in significant accomplishments. We greatly enhanced our Talent Acquisition team to better focus on talent attraction and retention. We also rolled out new programs to retain and engage with staff. CIG continues to improve our corporate reputation, raise the bar on the recruitment experience for candidates, and work with employees to retain our best-in-industry talent. This year we embarked on a Diversity, Equity and Inclusion (DE&I) program to increase our organization’s awareness, respect, and appreciation of the diversity within our staff, agents, and policyholders. By bringing awareness to and promoting the benefits of diversity and practicing what we are learning in Diversity, Equity and Inclusion, CIG continues to better our culture, increasing our attraction and retention as a Great Place to Work®. As CIG does throughout each year, we support our communities through financial giving and our Paid Volunteer Time (PVT). As individuals and as an organization, we came together through food bank donations and volunteer support, cleaning our local beaches and parks, and collecting toys and clothes for numerous non-profit help organizations. These programs are securing our success in attracting and retaining the top talent in the industry. With these accomplishments, we have the right teams and programs in place to provide the best products, services and support for our agents, policyholders, and communities.
Tammy Ebnet, SPHR, LDSS
Assistant Vice President, Human Resources In September, HR Business Partners, Talent Acquisition, Payroll/Compliance, and Employee Experience team members met in Reno for a three-day strategic planning meeting. We laid out our strategy, goals, and key initiatives for 2022. Having the team together for these planning sessions is one of my favorite moments of 2021. In November, the HR and Facilities team spent an entire day in our Monterey office for team-building and individual- and groupawareness training. During this training, the group opened up with trust and vulnerability to learn who we are individually and how we can use this understanding to better communicate with and relate to each other as a team, as well as fellow employees, and recruits. A day of learning, laughter, pure happiness, and delight in being together in one location face to face is a terrific memory and experience of being together as a team.
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CIG is a Great Place to Work 2021 marked our first-ever employee engagement survey. 83% of staff provided feedback and earned the company’s first Great Place to Work® certification. 71% of employees say CIG is a great place to work, compared to 59% of employees at a typical U.S.-based company. While the acknowledgment was gratifying, the survey feedback set a baseline for improvement and growth in the areas of employee development & careers, rewards & recognition, communication, and trust & transparency. CIG is focused on employee satisfaction so we can retain top-quality talent, attract the best candidates, and have the right people in place to support our agency partners and policyholders.
Leading the Way Andrew J. Doll
President & Chief Executive Officer
Michael Ackerman
Vice President & Chief Information Officer
Mario Federico
Director, Application Development
Kevin Okelberry
Vice President & Chief Underwriting Officer
Scott Cummins
AVP, Personal Lines
Debbie Belardes
Robert Zic
Director, UW Services
Tammy Ebnet
Director, UW Development & Audit
Kurt Morgan
Regional Field Executive – Southwest
Chief Financial Officer & Treasurer Assistant Vice President, Human Resources Assistant Vice President, Strategy & Innovation
David Dew
Director, Strategy & Innovation
Daniel Moskala
Assistant Vice President, Actuarial & Analytics
Kenneth Stewart Victor Foggie
Pauleen Hepner
Regional Field Executive – Northern CA
Bruce Ostrem
Regional Field Executive – Southern CA
Cynthia Mehrtens
Vice President & Chief Claims Officer
Ernest Guerra
Director, Property CAT & Large Loss
Eric Hartwell
Director, Claims Operations
Martin Ighani
Director, Claims Counsel
Juliet Schade
Director, Property
Laura Teasdale
Director, Claims Casualty
Vanessa Toureau
Director, Claims Casualty
Jennifer Wagner
Regional Field Executive – Northwest
John LaPorta
Assistant Vice President, Sales & Marketing
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Moving Forward Together
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We accomplished much in 2021, making great progress on our five-year modernization plan, and we’re carrying that momentum into 2022. The Claims Center modernization project is on track to finish later this year. This is the largest project in CIG’s history, and it is designed to improve the agency partner and policyholder experience with more efficient and user-friendly processes and faster claims payments. We also continue to develop our Commercial and Agriculture Product Lines. In 2022 we will begin adding new classes of business to our BOP product including Restaurants and Hotels, which our agents will be able to quote and submit online. We have several filings in process related to our Farmowners business in which we will be updating multiple forms and are working with the various Departments of Insurance to get them approved and implemented in 2022. We are also developing a sophisticated commercial and farm auto predictive rating model which will address our rate need in this line, and broaden our future capabilities. The frequency of straight-through processing for Personal Auto policies increased dramatically in 2021, a trend we expect to continue into the new year as we expand this feature to more states. Another major enhancement slated for Personal Lines in 2022 is the introduction of ‘What-If’ quoting, designed to allow our agency partners to quote multiple scenarios for their customers in real time. No more time-consuming email requests. CIG will also introduce ‘By-Peril’ rating plans in 2022 for Homeowner policies. These rating models will greatly enhance pricing accuracy and ensure the long-term stability and competitiveness of our Personal Property product offerings. We are carrying this momentum into 2022, driving improvements to our systems, products, profitability, and, most importantly, our relationships. We can do good things individually, and together we will achieve greatness.
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CIGinsurance.com
877-200-4220
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