Richard J. Zick
President and
Chief Executive Officer

2010 - 107^th Annual Report

The weather of 2010 has certainly impacted Northeast carriers, including Utica First. This all started with a major event on March 13, 2010 and just seemed to continue monthly. I have always said it is always someone's time in the gun and right now the states we write in are on that radar screen. Very few areas of the country escaped in 2010.

The soft market continued throughout the year. There was little to no upward rate movement and there still are times we look at an account, see someone at half the price, just shake our heads and walk away. There is a break-even price line and some companies just think they are smarter than the rest of us. 2011 will be interesting as we all read the same industry news; reserves depleted, Catastrophes are up and Combined Ratios up and set to rise even more in 2011. We underwrite to make money here at Utica First.

With a 99% Combined Ratio, we have had enough pain and we will start to raise some rates minimally in 2011. Not all was bad news in 2010. We did increase our Surplus $7.4 Million to a new all-time high. Our Assets crossed the $200 Million mark, which is quite an accomplishment considering in 2000, our Assets were $69 Million.

As the market has favored price-conscious Carriers, we have made a point to spend a considerable amount of time and money to improve our back-end processing to the point that we can compete with anyone on service to our Agents and Policyholders.

From a Written Premium perspective, we ended the year just about even. The good news has been that the last four months have shown some very positive progress on New Business. Our Restaurant Business has increased almost four-fold since 2007. Our Retention Ratio remains very strong and even in a prolonged soft market, it did not drop off. The Artisan product is a challenge, which is well documented in New York. Most of the small contractors have downsized and that results in less premium per policy. The Court system has been brutal, particularly in some well documented districts, on some cases where there should be no liability. The "deep pocket" syndrome seems to come in play.

No one spends more time at working to improve our level of professionalism than Utica First. For the last three years, we have had close to 200 exams taken by our people. I have been at this a long time and this is the smartest group of people we have ever had. They know SERVICE to our Agents and Policyholders is key.

Our mission remains unchanged: we write niche products, keep them at competitive prices, underwrite to make money, ensure that we have great service, and treat our Agents and Policyholders with the respect that they deserve.