A N N U A L R E P O R T

2015
A N N U A L
R E P O R T
2015 ANNUAL REPORT
Mutual Interests.
Mutually Insured.
Letter from the Chair
SVMIC
exists to serve and protect physicians.
structure. In the last year, we added thirteen new doctors to our
This May will mark the fortieth
claims, underwriting and risk management committees. These
anniversary of the first policy written by SVMIC. With that in
doctors, whose photo appears on page eleven of this report, bring
mind, we invite you to join us as we celebrate a few achievements
new perspectives and energy to the committees. We are excited to
and share some of our preparations for the future.
have the benefit of their insights. If you know one of these doctors,
In 2015, we surveyed policyholders to evaluate how well we are
please thank him or her for serving your company.
delivering on our mission to be the premier professional liability
Additionally, we are adopting a new visual identity. The green and
insurance company for physicians. We were pleased, but not
purple colors reflect the traditional academic colors for medicine
surprised, to learn that 97% of respondents were either very
and law. The logo shape, which we call the Mobius Square, reflects
satisfied or extremely satisfied with their SVMIC experience. The
the careful balance SVMIC achieves in weaving medicine and law in
high ratings reflect SVMIC’s excellent customer service, strong legal
support of you, our policyholder. We hope you like the new look
team, and valuable educational services. We also received advice on
and share our excitement for the future.
ways SVMIC could improve, such as expanding its online services
and refreshing its website. We are enthusiastically working on the
improvements you have recommended and look forward to making
these available during 2016.
To help SVMIC remain responsive to your ever-changing needs, we
We are honored to serve as chair and vice chair of your wonderful
company, and we look forward to ensuring SVMIC remains the
business partner you know and trust. We welcome your questions
and comments at any time. Thank you for your continued
commitment to SVMIC .
periodically introduce new doctors into our governance
HU GH F R A N C I S , I I I , M D
Chair of the Board
J OH N O. LY T L E , MD
Vice Chair of the Board
1
FORTY
YEARS
OF
HISTORY
1976
1989
1981
With $3 million in contributed
capital, SVMIC receives
certificate of authority from
the State of Tennessee and
commences issuing policies
on May 15.
First SVMIC policies
are issued for Arkansas
physicians. Company applies
for admission in the seven
other states contiguous to
Tennessee.
SVMIC completes the return
of 100% of the capital
originally contributed by
policyholders.
1977
1984
1997
3,840 Tennessee physicians
insure with SVMIC in its first 18
months of operation.
Number of policyholders
passes the 5,000 mark
and SVMIC surpasses
$100 million in assets.
First SVMIC policies are issued
for Kentucky physicians.
1976 1977 1978 1981 1982 1984 1985 19891992 1997 200
1976
1978
1982
1985
1992
2000
America celebrates
its bicentennial.
The microwave popcorn bag
is invented.
The word “internet” is used for
the first time.
DNA fingerprinting
is deployed.
Compact discs surpass
cassette tapes as the preferred
medium for recorded music.
Peak of the dot
com boom.
2
2015 ANNUAL REPORT
Remember 1976? There was once a time without SVMIC and the security of a medical liability policy, a
time when physicians nationwide faced an insurance crisis that threatened their very livelihood. That’s
why a group of Tennessee physicians got together and formed one of the first organizations in the nation
created by physicians to insure their own medical liability risk. That was 40 years ago.
As we move through 2016 and celebrate our 40th anniversary, we take a journey back through the past
four decades to remember some of the important milestones and accomplishments in our history.
2014
2010
2004
Tennessee rates reduced 23%,
the largest rate reduction in
SVMIC’s history.
Physician policyholder count
surpasses 16,000.
2002
Record numbers of physicians
apply for insurance with SVMIC in
wake of exit of St. Paul and several
other insurance companies. 2,600
policyholders added in a single
year, representing a 21% gain, for
a total of more
than 15,000.
2008
A.M. Best again awards an “A
(Excellent)” rating, marking
SVMIC’s 25th consecutive year
of an “A” or better rating.
2013
Board elects Hugh Francis to
succeed to Paul McNabb as
Board Chair. SVMIC receives
exclusive endorsement of
the Arkansas Medical Society
and surpasses $500 million in
policyholders’ surplus.
Steve Williams retires after
38 years of service. John Mize
succeeds him in
January as President & Chief
Executive Officer.
2015
SVMIC adds cyber security
coverage insurance and
holds first facility-based Risk
Education seminars.
000 2002 2004 2007 2008 2010 2011 2013 2014 2015
2002
2007
2011
2015
NASA’s Mars Odyssey
spacecraft finds evidence of
enormous quantities of water
just under the surface of Mars.
First “smartphone,” the
Apple iPhone, is released.
The space shuttle Atlantis launches into
space for the last time from the Kennedy
Space Center. It is the 135th and final
flight of the space shuttle program.
American Pharoah becomes the
first horse to win the Triple Crown
since 1978.
3
2015 ANNUAL REPORT
2015 Policyholder Survey Results:
Customer Satisfaction
Policyholder Satisfaction
97% of policyholders are highly satisfied with their
SVMIC experience.
(Based on 1,331 policyholders who completed the study.)
Extremely Satisfied
76%
Very Satisfied
Satisfied
Somewhat Dissatisfied
21%
Very Dissatisfied
3%
Customer Satisfaction Compared with Other Companies
Our competitors certainly have their strengths, but research shows that SVMIC is differentiated by its exceptional
customer service and overall breadth of strengths. Compared to our competitors, we were the only company to deliver emotional,
technical and educational satisfaction.
TECHNICAL SATISFACTION
Not only do we go above and beyond to ensure that our
policyholders’ individual concerns are understood, our
attorneys are known for being experts who are actively
engaged with medical practices.
OUR TOP
COMPETITORS
EMOTIONAL SATISFACTION
Our policyholders know they will not be treated like
another number. At SVMIC we are able to be attentive
to our policyholders’ needs. We do this by taking
a consultative approach to familiarizing ourselves
with policyholders’ needs and issues, and forming an
emotional connection with our policyholders—ultimately
to provide the best service possible.
EDUCATIONAL SATISFACTION
Our live seminars are some of our most valued services.
Nearly 80% of our policyholders have participated in
one of our programs.
4
TECHNICAL
SATISFACTION
TECHNICAL
SATISFACTION
EMOTIONAL
SATISFACTION
EDUCATIONAL
SATISFACTION
Our 2015 Policyholder Survey received a strong response rate. Thank
you for taking the time to provide your feedback. The results showed us
where we’re getting things right and will help us to continue exceeding
your expectations.
Top Three Reasons Why
77%
33%
20%
EXCELLENT CUSTOMER SERVICE
ATTORNEY/LEGAL TEAM
SEMINARS/CME/EDUCATION
“Very attentive to our needs
as busy physicians.”
“I never had a question that
could not be answered.”
“Call for advice goes straight
to an attorney.”
5
2015 ANNUAL REPORT
2015 Policyholder Survey Results:
Key Influencers
What Attracts and Keeps Policyholders
Reputation, professional knowledge and physician ownership were the top three reasons why policyholders choose to stay with
SVMIC. The majority of policyholders also cited good value for the money, comprehensive included support and programs, claims
management staff comprised of all attorneys, and local business development outreach as benefits that impacted their decision.
Reputation
83%
14%
3%
Professionalism/knowledge of the SVMIC staff
82%
14%
4%
Created by physicians for physicians/physician ownership
Good value for the money
Recommendation from another physician, colleague or co-worker
Required by my group
20%
28%
52%
35%
28%
37%
16%
34%
Some Influence
High Influence
11%
24%
65%
Continued support/outreach from the business development/
sales team after becoming a policyholder
7%
23%
70%
A claims management staff comprised of all attorneys
5%
20%
76%
Comprehensive free support and programs
4%
17%
79%
50%
No Influence
Respondent Usage of SVMIC Resources and Services
SVMIC is committed to our policyholders. The feedback we received about the usage of resources and services we provide to policyholders
will help us continue to develop the most beneficial tools, such as live seminars, CME credit, premium discounts and claims attorney
medical-legal consultations.
Live seminars/CME credit/premium discounts
79%
Claims attorney medical-legal consultations
64%
Self-study courses
58%
Newsletters
59%
26%
Risk assessments/legal nurse consultants
23%
Consulting services
Online library
Consultative business development/sales professionals
6
18%
23%
Key Takeaways
ENGAGED AND SATISFIED POLICYHOLDERS
97 percent of SVMIC policyholders are highly satisfied
with SVMIC.
The response rate was strong. A total of 1,331 policyholders
completed the study.
OUR MOST VALUABLE ATTRIBUTES
SVMIC policyholders chose us and plan to stay with us
because of our excellent reputation, professional staff, and
physician-based foundation and ownership model.
OPPORTUNITIES FOR IMPROVEMENTS
There’s a prime opportunity to improve our marketing
communications and provide an improved online
experience. There is also an opportunity to enhance our
educational offerings to include more self-study online
options, easier self-serve education features, and more
variety of risk education offerings.
“SVMIC is a friend and their
educational meetings
are very helpful to a
practicing physician.”
“The medical field is ever
changing and SVMIC can
help us with keeping up
with the pace.”
7
2015 ANNUAL REPORT
Financial Highlights
SVMIC is owned entirely by its policyholders and continues to be one of the most efficiently run companies of its kind. The success
of our company over the last 40 years has allowed us to deliver on the mission, return $342.5 million to policyholders and reach
a point of financial strength unmatched in our history all while now having an average, inflation-adjusted premium per physician
lower than it was when we began in 1976. It is this success and financial strength that allows us to provide a great product at a fair
price, and affords our policyholders the confidence of knowing that we will always be here to protect their reputation when needed.
Condensed Balance Sheets
Condensed Statements of Income
(December 31, 2015 & 2014)
(For the years ended December 31, 2015 & 2014)
2015
2014
Assets
Cash & Investments
Accrued Investment Income
Premiums Receivable
Reinsurance Recoverable
Federal Income Tax Recoverable
1,140,078,000
Ceded Premium
(20,567,000)
(28,197,000)
9,705,000
Net Written Premium
113,399,000
114,560,000
19,202,000
21,245,000
Change in Unearned Premium
832,000
2,431,000
6,072,000
10,073,000
Net Earned Premium
114,231,000
116,991,000
Loss & Loss Adjustment
Expenses Incurred
90,812,000
98,985,000
22,157,000
20,412,000
1,262,000
(2,406,000)
31,797,000
31,975,000
1,892,000
1,158,000
33,689,000
33,133,000
17,525,000
294,000
494,000
1,193,207,000
1,199,120,000
508,000,000
530,000,000
Unearned Premiums
69,207,000
70,039,000
Accounts & Taxes Payable
40,502,000
41,014,000
Reinsurance Balances Payable
29,582,000
33,625,000
2,670,000
2,901,000
Total Assets
Liabilities & Policyholders' Surplus
Loss & Loss Adjustment
Expense Reserves
Dividends Payable
5,271,000
4,962,000
655,232,000
682,541,000
Policyholders' Surplus
537,975,000
516,579,000
1,193,207,000
1,199,120,000
Total Liabilities &
Policyholders' Surplus
Other Underwriting Expenses
Net Underwriting Income
Net Investment Income
Total Liabilities
Other Liabilities
142,757,000
9,210,000
-
Other Assets
2014
133,966,000
1,144,648,000
13,781,000
Net Deferred Tax Assets
2015
Gross Written Premium
Net Realized Capital Gains
(Losses) on Investments
Net Investment Gains
Other Income (Expense)
Net Income Before Taxes &
Policyholders' Dividends
Policyholders' Dividends &
Federal Income Taxes Incurred
Net Income
(81,000)
34,870,000
(9,387,000)
25,483,000
9,000
30,736,000
(9,265,000)
21,471,000
Note: The financial statements have been prepared in conformity with accounting practices prescribed or permitted by the Tennessee Department of Commerce and Insurance.
The condensed financial information has been derived from the complete statutory-basis financial statements which were audited by Ernst & Young LLP, our independent
auditors. A complete set of audited financial statements is available upon request.
8
Cumulative Dividends Declared
and Return of Capital
Policyholders’ Surplus/Total Assets
$1,30
0,000
$1,20
,000
0,000
$350
,000,0
,000
$1,10
$1,00
,000
0,000
$800
$300
,000,0
,000
$900
00
,000,0
00
,000,0
00
$700
,000,0
00
$600
,000,0
00
$500
,000,0
00
$400
,000,0
00
$300
,000,0
00
$200
,000,0
00
$100
,000,0
00
1976
00
0,000
1980
$250
,000,0
$1,193,207,000
00
$200
$342,500,000
,000,0
00
$150
,000,0
00
$100
,000,0
$537,975,000
00
$50,0
00,00
1985
1990
1995
2000
0
$0
2005
Policyholders’ Surplus
2010
1976
2015
1980
1985
1990
1995
2000
Total Assets
2005
2010
2015
$20,0
00
Premiums Per Physician
$15,0
00
$12,896
$10,0
00
Average Premium Per Physician
Average Premium Per Physician
(in today’s dollars)
$5,00
0
$3,096
$0
Based on Bureau of Labor Statistics CPI
Inflation Calculator
1976
$9,829
$9,829
1980
1985
1990
1995
2000
2005
2010
2015
9
2015 ANNUAL REPORT
Board of Directors
Hugh Francis, III, MD
Chair of the Board
General and Vascular Surgery
Memphis Surgery Associates PC
Memphis, Tennessee
Director Since 1997
Chad T. Couch, MD
Urology
Chief Medical Officer
Bristol Regional Medical Center
Bristol, Tennessee
Director Since 2008
John O. Lytle, MD
Vice Chair of the Board
Orthopedic Surgery
South Arkansas Orthopedic Surgery Center
Pine Bluff, Arkansas
Director Since 2006
Wayne A. Hudec, MD
General Surgery
Ozark Surgical Associates
Fayetteville, Arkansas
Director Since 2009
Katrina M. Hood, MD
Secretary of the Board
Pediatrics
Pediatric and Adolescent Associates PSC
Lexington, Kentucky
Director Since 2009
Matthew L. Perkins, MD
Treasurer of the Board
Internal Medicine and Pediatrics
Tennessee Medicine and Pediatrics PC
Smyrna, Tennessee
Director Since 2008
Robert J. Berkompas, MD
Internal Medicine
Chief Medical Officer
Alive Hospice
Nashville, Tennessee
Director Since 2010
Officers
10
(As of February 2016)
William I. Mariencheck, Jr., MD
Pulmonary and Critical Care Medicine
The Jackson Clinic
Jackson, Tennessee
Director Since 2012
Raymond S. Martin, III, MD
General and Vascular Surgery
The Surgical Clinic PLLC
Nashville, Tennessee
Director Since 1994
Michael A. McAdoo, MD
Family Practice
Milan Medical Center PC
Milan, Tennessee
Director Since 2002
Paul C. McNabb, II, MD
Chair of the Board Emeritus
Internal Medicine/Infectious Disease
St. Thomas Midtown Hospital
Nashville, Tennessee
Director Since 1996
Gary E. Meredith, MD
Pediatrics
Pediatric Diagnostic Associates
Chattanooga, Tennessee
Director Since 2000
Russell E. Miller, CAE
Chief Executive Officer
Tennessee Medical Association
Nashville, Tennessee
Director Since 2013
John H. Mize, FCAS, MAAA
President and Chief Executive Officer
SVMIC
Brentwood, Tennessee
Director Since 2013
Elise E. Schriver, MD
Pulmonary and Critical Care Medicine
University Pulmonary and Critical Care
Knoxville, Tennessee
Director Since 2002
Jane M. Sneed, MD
Pediatrics
The Children’s Clinic
Jonesboro, Arkansas
Director Since 2013
Lisa J. Young, MD
Invasive Cardiology
The Sutherland Clinic Inc.
Germantown, Tennessee
Director Since 2013
(As of February 2016)
Hugh Francis, III, MD
Chair of the Board
Robert E. Byrd
Vice President – Chief Analytics Officer
Donna W. Berg, RN, LNC
Assistant Vice President – Special Projects
John O. Lytle, MD
Vice Chair of the Board
Sherie L. Edwards, JD, MBA
Vice President – Corporate and Legal
Katrina M. Hood, MD
Secretary
Raymond M. Meador, Jr., MBA
Vice President – Business Development
Susan Decareaux, CPCU, CISR, RPLU
Assistant Vice President – Underwriting,
Pricing and Risk Analysis
Matthew L. Perkins, MD
Treasurer
Kenneth W. Rucker, JD
Vice President – Claims
John H. Mize, FCAS, MAAA
President and Chief Executive Officer
D. Mart Sesler
Vice President – Information Systems
Michael A. Ricciardelli, CPA
Chief Financial Officer
Charmy M. Shrode, CIC
Vice President – Underwriting
James W. Howell, JD
Senior Vice President
Thomas H. Stearns, FACMPE
Vice President – Medical Practice Services
James E. Smith, CPCU
Senior Vice President
Rochelle E. Weatherly, JD
Vice President – Risk Education and
Evaluation Services
Brian Fortenberry
Assistant Vice President – Underwriting
Julie Loomis, RN, JD
Assistant Vice President – Risk Education
and Evaluation Services
Judy Musgrove
Assistant Vice President – Marketing and
Communications
Robert E. Patterson, FACMPE
Assistant Vice President – Medical
Practice Services
Deborah D. Rose, RN, LNC
Assistant Vice President –
Medical Information Services
Judy Vinson, RN, BSN, CPHQ, LNCC
Assistant Vice President – Risk Education
and Evaluation Services
Alisa S. Wamble, JD
Assistant Vice President – Claims
Susan L. Bennett
Director of Finance and
Assistant Corporate Secretary
Amy J. Turbeville, MBA
Controller
Renee A. Lewis
Assistant Corporate Secretary and
Administrator – Claims
Committees of the Board
ARKANSAS ADVISORY COMMITTEE
EXECUTIVE COMMITTEE
RISK MANAGEMENT COMMITTEE
UNDERWRITING COMMITTEE
Wayne A. Hudec, MD, Chair
John G. Elders, MD
E. Scott Ferguson, MD
John O. Lytle, MD
David M. Mego, MD
Brenda N. Powell, MD
Juan C. Roman, MD
Jane M. Sneed, MD
Dennis B. Yelvington, MD
John O. Lytle, MD, Chair
Chad T. Couch, MD
Hugh Francis, III, MD
Katrina M. Hood, MD
Raymond S. Martin, III, MD
John H. Mize, FCAS, MAAA
Matthew L. Perkins, MD
Elise E. Schriver, MD
Elise E. Schriver, MD, Chair
Joan Michelle Allmon, MD
Melanie B. Blake, MD
Michael S. Dolan, MD
Daniel S. Ely, MD
JimBob Faulk, MD
Scott R. Fowler, MD
Hugh Francis, III, MD
Katrina M. Hood, MD
Charles S. Joels, MD
John O. Lytle, MD
Paul C. McNabb, II, MD
Douglas O. Olsen, MD
Antwan D. Robinson, MD
Matthew P. Willis, MD
Chad T. Couch, MD, Chair
Brady W. Allen, MD
Robert J. Berkompas, MD
Mark E. Bigler, MD
Ravi D. Chauhan, MD
Anthony T. Everhart, MD
Hugh Francis, III, MD
Benjamin L. Huff, MD
Robert C. Hughes, MD
Christine L. Kasser, MD
Shauna Lorenzo-Rivera, MD
John O. Lytle, MD
William I. Mariencheck, Jr., MD
Paul C. McNabb, II, MD
Ryan D. Mire, MD
Craig A. Myers, MD
Matthew L. Perkins, MD
Jason A. Weaver, MD
Lisa J. Young, MD
AUDIT COMMITTEE
Robert J. Berkompas, MD, Chair
Katrina M. Hood, MD
Michael A. McAdoo, MD
David A. Curbo, CPA (Non-member Consultant)
BUDGET COMMITTEE
Raymond S. Martin, III, MD, Chair
Hugh Francis, III, MD
John O. Lytle, MD
William I. Mariencheck, Jr., MD
Michael A. McAdoo, MD
Paul C. McNabb, II, MD
Gary E. Meredith, MD
Matthew L. Perkins, MD
Elise E. Schriver, MD
CLAIMS MANAGEMENT
CORE COMMITTEE
INVESTMENT COMMITTEE
Matthew L. Perkins, MD, Chair
Hugh Francis, III, MD
John O. Lytle, MD
William I. Mariencheck, Jr., MD
Raymond S. Martin, III, MD
Michael A. McAdoo, MD
Paul C. McNabb, II, MD
Gary E. Meredith, MD
Elise E. Schriver, MD
SUCCESSION PLANNING COMMITTEE
Hugh Francis, III, MD, Chair
John O. Lytle, MD
Paul C. McNabb, II, MD
John H. Mize, FCAS, MAAA
Michael A. Ricciardelli, CPA
Elise E. Schriver, MD
Kye Hudson (Non-member Consultant)
2015 Fellows
Raymond S. Martin, III, MD, Chair
Hugh Francis, III, MD
John O. Lytle, MD
Paul C. McNabb, II, MD
Gary E. Meredith, MD
Elise E. Schriver, MD
CLAIMS MANAGEMENT COMMITTEE
CONSULTANTS
R. Louis Adams, MD
Neal S. Beckford, MD
Richard A. Belden, MD
David A. Ciochetty, MD
Jon S. Cohen, MD
William H. Edwards, Jr., MD
Daniel S. Ely, MD
William D. Falvey, MD
James C. Fleming, MD
Keith L. Goldberg, MD
James Louis Manning, MD
Phyllis E. Miller, MD
Robert H. Miller, II, MD
Alan P. Mullins, MD
Frank J. Murabito, MD
David J. Soll, MD
Jane M. Thomas, MD
COMPENSATION COMMITTEE
William I. Mariencheck, Jr., MD, Chair
Hugh Francis, III, MD
John O. Lytle, MD
Raymond S. Martin, III, MD
Michael A. McAdoo, MD
Paul C. McNabb, II, MD
Gary E. Meredith, MD
Matthew L. Perkins, MD
Elise E. Schriver, MD
Kye Hudson (Non-member Consultant)
B
A
D
C
E
G
A Keith L. Goldberg, MD
J
H
F
I
K
L
H Matthew P. Willis, MD
B Charles S. Joels, MD
I Michael S. Dolan, MD
C Ravi D. Chauhan, MD
J Ryan D. Mire, MD
D Scott R. Fowler, MD
K Antwan D. Robinson, MD
E Shauna Lorenzo-Rivero, MD
L Benjamin L. Huff, MD
F Brady W. Allen, MD
Not Shown:
Melanie B. Blake, MD
G Joan Michelle Allmon, MD
11
2015 ANNUAL REPORT
We hope you found this information about SVMIC’s history and 2015 Policyholder Survey
results interesting—we certainly did. Understanding where we have been in the past and
how we operate in the present is essential to ensuring excellence in the future.
While the medical landscape has transformed over the past 40 years, one thing has
remained the same—our commitment to serving you, our policyholders. We look forward
to continuing this service for many decades to come.
“I sleep better knowing
SVMIC will help me in need.
Thank you.”
12
101 Westpark Drive, Suite 300
Brentwood, Tennessee 37027
Phone: 800.342.2239
Fax: 615.370.1343
Email: [email protected]
svmic.com