PRESIDENT’S MESSAGE

Throughout 2019, we focused our centennial celebrations on showcasing the qualities of our company and our employees that led to our success. In an era where start-ups and Insurtechs capture much of the attention, our 100-year history of promises kept and relationships honored warranted celebration.

Like most mutual insurance companies, Penn National Insurance has a unique beginning and a rich history. After prevailing in a battle with the state legislature to operate threshing equipment on public roads, the Pennsylvania Farmers and Threshermens Association launched a mutual insurance company to write workmen’s compensation insurance -- yes, that’s what the line of business was called back in 1919 -- for members at more affordable rates than those charged by stock companies or the state plan.

We celebrated our heritage in many ways during 2019, including the production of a commemorative history book that captures the spirit and determination found within the company from its beginnings. Looking back over 100 years gives one a new appreciation for the saying, “We stand on the shoulders of those that came before us.” It also drives home the point that it is now up to us to put our shoulder to the wheel and meet today’s challenges so that Penn National Insurance thrives in a rapidly changing environment, one that our founders could have hardly even have dreamed as a possible reality.

While it was a lot of fun celebrating the company’s centennial, we are guided by the wise advice to “never confuse longevity with immortality.” The fact that we have been around for 100 years means little for the next 100. It is what we do in the present that will determine our future. In recent years, as we communicate with our employees and agents, we have referred to a list of attributes that we believe describe our company:

• Vibrant
• Innovative
• Resilient
• Personable

We now add the words “bold” and “persistent” to that list of attributes.

It will be necessary to be bold and persistent in our actions as we prepare for our future. By “bold,” we mean the need for the company to embrace change and move with fast-paced persistency so that our future remains bright. Our founders were bold and persistent in 1919, and there is no reason we cannot follow in their footsteps.

The key is to monitor, anticipate and respond to coming changes so that the company is well-positioned for the future, all the while maintaining a focus on executing today’s plan so that near-term objectives are met. It is not an easy assignment, but one for which we are well prepared.

We are fortunate to have many talented and dedicated employees, a fiercely loyal agency plant, along with a board of directors that embraces our mutual company structure. Because we were not conceived to fulfill shareholder expectations, we have the ability to take the long-term view and not let anything detract from doing right by our policyholders, agents and employees.

Our employees are up to the challenges of the future, and we could not be prouder of their efforts. It is humbling to think of the thousands of employees over the years who contributed to Penn National Insurance’s success. It is the players on the field, not the manager in the dugout or the executive in the front-office who win ballgames. We are told by our agents, reinsurers and vendors that we have some of the best ballplayers in the business, which of course comes as no surprise to us.

A new strategic plan will be authored in 2020 – one that carries forward the best of our past and responds to the new challenges ahead. Our embrace of a relationship-driven business model has served us well and will be emphasized in future strategies as well. While analytics and innovation are changing the insurance game, we understand that ours remains a people business.

Our agents are more than an agency code on a profit and loss report. We are motivated to understand and meet their needs, as well as those of their customers. Personal touch matters and we take the time to get to know our agents, whether in group meetings or in their hometown office.

We look to our agents to weigh the merits of our relationship business model and our mutual company structure when placing business. Agents who value the following carrier attributes, which benefit them and their customers, help us sustain our business model by supporting us with growth and good business:

• A company solely focused on policyholders, agents and employees
• Local management/employees who understand operating territories
• Access to an executive management team that they know and one that knows them, too
• The ability to have a merit-based conversation on decisions impacting their agency
• Consistency in underwriting approach
• A claims team that dependably earns high service marks
• A carrier always seeking ways to make the experience better for its agents and policyholders

We appreciate that business is earned and that the effort required to land an account is significant. Penn National Insurance offers an upside beyond price. We may not take the time to reflect enough on the upside, but we ought to. We will do our best to win business, and will look to agents to support our business model, which has worked so well for agents, policyholders and employees.