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President's Message

Richard J. Zick
President and
Chief Executive Officer

Utica First is a much different company than it was back in 2002 when we were downgraded to a "B++", had approximately $15 Million in Surplus and $67.9 Million in Writings. We finished 2015 with a Combined Ratio of 99%, added $2 Million to Surplus and reached an all-time high in Writings ($144 Million) and Surplus ($120 Million). Were it not for the unrealized losses in the Equity Portfolio, this would have been $8.0 Million.

Utica First was recognized by Wards as a Top 50 Company again in 2015. In 2014, Utica First was recognized by Wards and then by Conning as the 7th Most Profitable Carrier in the United States over a 10-year period with a Combined Ratio of 92% (companies under $500 Million in writings). This is three years in a row as a Wards Top 50 Company.

Early in the year, the weather was not our friend and our Combined, even through June, was anything but impressive. At the time, my thought was that if we could get this under 100% by year-end, it would be quite an accomplishment. This is now three years in a row with a poor weather start. Hopefully, this year, El Nino is our friend.

You build a good book of business that is priced correctly and absent extreme weather, you should be able to produce a profit. There has been no shortage of companies that seem to think they can operate 20-40% below Market Price. In the end, it fails every time. Rates go up, business is no longer desirable, or they are gone, period. In this business, you can only outrun Reserves for so long. Here at Utica First, we run at a redundancy and plan to continue to do so. As many companies released reserves to boost their results, we wanted no part of that. If the Rate sounds too good to be true, it usually is. We have a wall full of plaques from companies that were run on the theory that they could underwrite better and charge less and now they have disappeared. We would certainly hope that the various Insurance Departments are diligent in their rate analysis of foreign carriers trying to buy their way into the US market.

Our Core Value here at Utica First is to treat people right and charge a fair price. We saw some impressive growth this year in all lines of business with the overall Written Premium up 8% and our New Business count up 3.4%.

Rates will move up a bit this year but the rate rise is probably done and we do not expect too much rate activity in 2015, other than the Apartment class. The reality is there is much alternate Reinsurance Capital out there and the Renewal cycle should be relatively soft again in 2016. Last year, I was wondering, "when will the hammer hit on the underpriced business out there?" Well, it hit and it is part of the reason we are seeing so much business.

We continue to make this the best company we can from all perspectives. This year, Utica First will complete a $2.0 Million state-of-the-art addition and also finish a $1.7 Million Claims Technology project.

We thank all of our Agents, Policyholders, Industry Partners and the staff here at Utica First who work so hard to make this Company successful.