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Because it has always been a matter of trust…
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… 2010 Mission Statement Same Robust and Responsive Policy Protection with the same Superior Service Standards… now in a simplified Mission Statement Our purpose is to enable telecommunication businesses to manage their fi financial i l risk i kb by means off iindustry-specific d ifi iinsurance and d risk i k 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 serve, the coverage and claims advocacy we offer, offer and by consistently producing sound solutions that fit the needs of each of our customers. The end d product p d of our efforts is the earned d trust of our insureds d. Because it has always been a matter of trust… Shareholders Cen Ark Cellular, Inc. Cen-Ark Central Arkansas Telephone Cooperative, Inc. Comanche County Telephone Company, Inc. Craw-Kan Craw Kan Telephone Cooperative Cooperative, Inc Inc. Etex Telephone Cooperative, Inc. Farmers Telephone Cooperative, Inc. Glenwood Telephone Company Hancock Telecom 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 Randolph Telephone Membership Corporation Riviera Telephone Company, Inc. Rock Port Telephone Company Santa Rosa Telephone Cooperative, Cooperative Inc. Inc Scott County Telephone Cooperative, Inc. Skyline Telephone Membership Corporation Southwest Arkansas Telephone Cooperative Stanton Telecom, Inc. Star Telephone Membership Corporation SSurry T l h M b hi C ti Telephone Membership Corporation Taylor Telephone Cooperative, Inc. Twin Lakes Telephone Cooperative Corporation Because it has always been a matter of trust… Shareholders West Carolina Rural Telephone Cooperative, Cooperative Inc. 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. L Allen Charles H. Creason, Jr. Loren L. Duerksen Peter J. J Elliott Raymond P. Henagan Leroy H. Lage William II. Nexsen Nexsen, III Because it has always been a matter of trust… Directors George W. G W Nostrand N t d Edgar L. Olson Richard C. Parker-Vice Chair L Lonnie i D D. P Pedersen d Thomas E. Preston David E. Schultz Richard K. Veach-Chair T d Thank you for your guidance! Because it has always been a matter of trust… p Stock Investment Report …as of 12/31/09 Active Shares - 1,496 Net Asset Value as of 12/31/08 - $4,128.44 $4 128 44 Unaudited Net Asset Value as of 12/31/09 - $4,540.61 Because it has always been a matter of trust… State of the Insurance Industry 2009 Combined Ratio initial report – 101 - 103%* 2008 Combined Ratio 105.1% as reported by ISO 2006-2007 was the last time where two years of underwriting profit, backto-back have been earned to-back, earned. 2001-2004 was all positive positive. Credit risk, terrorism, asbestos, and coastal property are issues that still present challenges. p g *initial report by Fitch Because it has always been a matter of trust… State of the Insurance Industry 2009 Rates and Premiums: MarketScout reports the composite rate for all lines of US property and casualty business are down 4% as of December 2009, but rates fell by 7% annually. Both are down from 2008 when they were 9% and 12%. Because it has always been a matter of trust… State of the Insurance Industry 2010 Rates and Premiums: Change is no Longer Forecast Because it has always been a matter of trust… State of the Insurance Industry 2010 Rates and Premiums: Flat but… but The results, with year-end 2009 still not official, of the insurance industry’s dus y s improvement p o e e by 2%. %. That sou sounds ds good but bu when e you really look, it translates to an industry loss of 3 cents on every dollar collected in premium in 2009 while in 2008 it lost 5.1 cents. Is this really good news? How can rates remain flat? Because it has always been a matter of trust… The Beginning - Serving NTCA Members • Formed in 1982 and domiciled in Vermont (VT) • 27th Year of Insuring NTCA Members • 8 Original Policyholders and 7 are still insureds! Owned by National Telecommunications Cooperative A Association i i and d 39 members b 1st association captive and 3rd overall captive in Vermont Because it has always been a matter of trust… Today Serving NTCA Members National Telcom Corporation - Serves 166 of 564 members (29.4%) Developed D l dT Telcom l IInsurance S Services i C Corporation ti iin 1989 - Serves S 232 off 564 (41%) I Insureds d iin 37 states Because it has always been a matter of trust… q y and Liabilities Financials-Assets,, Equity Assets 1982 $851,000 Equity 1982 $851,000 2008 $21,639,607 2009 $ 22,541,674 2008 $6,176,149 2009 $ 6,792,746 Of the $15 748 928 in liabilities $5 545 633 is held $15,748,928 $5,545,633 as a loss reserve Because it has always been a matter of trust… Financials-Premium and Loss Reserve Gross Premium 1982 2008 $ $11,079,448 Loss Reserve 1982 2008 $ $5,682,434 2009 $10,408,140 2009 $5,545,633 Because it has always been a matter of trust… Financials-A Snapshot of Operation Results Profit and Loss 2006 - $ 58,339 operational profit 2007 - $$218,415 , operational p p profit 2008 - $404,995 operational profit 2009- $338,728 operational profit Driven by TISC agency revenue and investment income 2009 marks the first time the Company has ever managed a claim which was caused by a wildfire. Because it has always been a matter of trust… 2010: Looking Ahead Continued Growth of P&C and D&O Programs with an Emphasis on Geographic Spread Development of Network and Data Liability Products that can meet any insureds needs from low limits to robust limits and coverage grants Introduction of an Errors and Omissions Policy Growth of Cellular Replacement Product 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