President’s Letter

Despite experiencing one of the largest catastrophic events in our history, I’m pleased to report the financial impact on PLM was limited. Hurricane Ida was one of the top five most damaging hurricanes in history (estimated at $35 billion). Fortunately, we were able to serve our policyholders in need with manageable impact on our bottom line.

Claims from the storm triggered our catastrophe reinsurance program and limited the overall negative impact to our financial picture. With 90 claims received and $17.5 million in gross loss reserves established, at the end of the day, less than 20 percent of the gross loss will show up in our financial statements. The remainder will be handed off to our reinsurers. Following last February’s winter freeze, this was the second large catastrophe event that we have endured this year and as such, we are forced back into the marketplace to buy “reinstatement” on the first layer of our reinsurance program. While this will cost us roughly $1 million, it will provide protection for any late arriving storms or early winter weather that could impact us.

The overall financial result for the year remains fair. Although, we at PLM are slightly behind our stretch goals, we are at a very good place to finish the year strong, and on pace to achieve more than $300 million of gross written premium.

New business continues to be robust with renewal retention north of 90 percent. This suggests that many customers in the wood niche understand the value of allowing PLM the privilege of providing for their property casualty insurance and risk management needs.

With a Net Promoter Score rating above 63, as I write, we are above the insurance industry average for this key metric. We believe it is based on the strength of the insurance professionals who come together as the PLM team. Our friendly customer service reps, the underwriting, claims, business development, and loss control professionals interact with customers, their brokers, and prospects on a day-to-day basis. With each interaction, they are delivering superior service and products that differentiate us from our competitors – in part because they specialize in and understand the unique needs of the wood niche.

In terms of profitability, again, we believe that despite the CATS that we endured this year, we still have a fair chance of finishing on target. Surplus growth was very strong in August and surplus reached a record high of more than $181 million.

One of the things we noticed recently is the release of late quotes from our competitors causing an increase in last minute submissions from brokers. While we are more than happy to entertain any last-minute submissions, it requires us to gather all the necessary information to provide an accurate quote quickly. We ask for cooperation from our brokers to respond promptly to any requests for materials.

I’m proud to say 99 percent of our employees are involved in continuing insurance education to help develop and enhance the skills that allow us to provide exceptional service and comprehensive solutions specifically designed to meet your business needs.

Earlier in the year, we informed you of the loss of our much beloved Operations Assistant Vice President Kathleen Dalton. In the wake of this loss, we restructured the Customer Service and Operations areas of the company, placing both under Assistant Vice President Traci Barber. For the last 10 years, Traci has been focused exclusively on Customer Service. There is an accompanying article that overviews this change including the promotion to Customer Service Supervisor for Erin Keyser and Maria Lubbers to Operations. Both will report to Traci (tbarber@plmins.com).

We continue our efforts to avoid cyber incidents with ongoing required training for all of the PLM team and utilization of constant reminders in huddles, meetings and town halls. Additionally, we are providing employees with a plethora of interesting cyber articles aimed at maintaining cyber awareness, not only for our employees as they relate to PLM, but also from our own personal vantage point. We want to both avoid a cyber liability problem at the corporate level and help our employees avoid encountering cyberattacks in their personal lives.

We cannot encourage you enough to spend some time (and money) gaining an understanding of your potential cyber exposures and encourage your clients to do the same. We are seeing a steady flow of cyber claims reported from our insureds. This is a bigger exposure than many producers or insureds might recognize. In most states, our coverage package includes limited cyber liability coverage, but perhaps more importantly, it provides your clients with access to an online “cyber liability toolbox” that can assist them in developing a cyber risk management program.

Elsewhere in the Lumber Memo we will be discussing the impending retirement of one of our long-term Vice Presidents, Chris Crucitt, who has decided to face that new adventure.  We wish him well.

Additionally, we are very pleased to announce that the Board of Directors has recently approved a dividend to one of our group plans involving members of NEMEON. Keep in mind that if your client is a member of the following groups, they too can enroll in a dividend plan:

• ABS (Allied Building Stores)
• LBM Advantage
• LMC (Lumber Merchandising Corporation)
• NEMEON
• NAWLA (North American Wholesale Lumber Association)

In closing, I find myself asking more frequently, where has the year gone?  By the time you receive and read this, the Thanksgiving holiday will be around the corner.

Recently, PLM launched its annual United Way campaign. While throughout the year we support a number of volunteer efforts by our employees, it always amazes me that the vast majority of our people (more than 99 percent last year) recognize that no matter what their circumstances are, they have much to be thankful for. They understand there are always others that are less fortunate or have problems whose scope and breadth are more significant than any one of us face. We are proud of their favorable response to our request to support The United Way and its member agencies.

I think you would agree that it has been a challenging couple of years due to the COVID-19 pandemic. The U.S. and world economies have absorbed another shock and there has been robust political debate, yet we find ourselves moving forward, as I hope you do.

I would like to take this opportunity to wish you, your families, and your entire team of associates a very happy and enjoyable holiday season.