Day on Torts
State Volunteer Mutual Insurance Company (SVMIC) had another outstanding year in 2010. Here are some highlights from its "2010 Report to Policyholders:"
- Surplus (think: net worth) increased almost 20% to $444 million, up from $364 million in 2009.
- Earned premiums dropped to $218 million, due to a significant rate reduction (average: 23%) and a decrease in the number of policyholders secondary to increased competition in the marketplace.
- Despite a decrease in earned premiums of over 15% (totaling over $43M), post-tax net income declined only a little over $4M to $67,668,000.
- Profits as a percentage of revenue were extraordinarily high, at over 25%.
- The unpaid loss and loss adjustment expense reserve actually dropped for 2010, a very unusual result.
- On February 22, 2011, the company declared another $20M dividend to its policyholders. This will decrease rates by an average of about 9%. This follows a dividend of $20M in 2010.
SVMIC’s 2011-12 rate filing will be available shortly and, I predict, will show further rate declines.
Of course, the tort reform measures virtually certain to be enacted into law in the next couple weeks will further enhance this company’s profits.
SVMIC has done an excellent job capturing a significant portion of the market for medical malpractice insurance in less than 40 years.