Corporate & Financial Information

Energy Insurance Mutual Limited ("EIM") recorded income of $24.0 million for the year ended December 31, 2019 compared to a loss of ($33.7) million for 2018. EIM recorded a loss from underwriting of ($77.2) million compared to income of $34.0 million in the prior year. Current year underwriting results were impacted by unfavorable loss development on prior year claims in the general liability and director and officers lines of business.

Income from dividends, interest, unrealized gains on securities, alternative investments and sales of traditional investments totaled $202.9 million and $80.8 million for the years ended December 31, 2019 and 2018, respectively.

Investments performed well during 2019, contributing $106.5 million to investment income due to mark-to-market increases. During 2019, EIM implemented certain accounting principles requiring mark-to-market changes in value of securities to be recognized through the income statement.  In prior periods, mark-to-market valuations were recorded as a component of other comprehensive income, net of tax.  For comparative purposes, investments contributed ($97.9) million in gross mark-to-market decreases in value in 2018.

Highlights from 2019 include:

• Distribution of $50.0 million (an increase of $10.0 million from the prior year) paid to members of record at December 31, 2018.
• A supplemental distribution of $50.0 million (an increase of $25.0 million from prior year) paid to members of record at September 30, 2019.
• Policyholders’ Surplus of $1.2 billion, an increase of $17.8 million for the year.
• Return on surplus of 8.5% before distributions.
• Combined ratio of 145.7% for the year ended 2019 as compared to 78.2% for the prior year.
• Membership retention of 100% was achieved.

EIM’s return on investments of 12.37% compared to a benchmark return of 12.16%.  The return is a result of gains on US equities of 31.48%, international equities of 22.21%, alternative investments of 6.29%, tax-exempt bonds of 7.26% and taxable bonds of 7.56%.