Corporate & Financial Information

3rd Quarter 2022 Financial Commentary

Energy Insurance Mutual Limited (“EIM”) recorded a loss on surplus of ($143.7) million for the nine months ended September 30, 2022 driven by investment market volatility. This is compared to a gain of $59.0 million for the same period in 2021. EIM recorded income from underwriting of $44.2 million compared to a loss of ($0.2) million in the prior year.

EIM saw an improvement on its net loss ratio, currently 73.7% for the nine months ended September 30, 2022, steadily decreasing over the last three years and more in line with budget.

EIM had an investment loss of ($230.4) million from unrealized market losses for the first nine months of 2022 compared to income of $71.3 million for the same period in 2021. Current year investment results were impacted by unfavorable market performance across most asset sectors.

Highlights from 2022 include:

• Distribution of $50.0 million paid in March 2022 to members of record at December 31, 2021.
• Policyholders’ Surplus of $1.1 billion, a decrease of $143.7 million or (11.5%) for the year.
• Combined ratio of 78.9% for the first nine months 2022 as compared to 100.1% for the same period prior year.
• Membership retention of 99% was achieved in the first nine months of 2022.

EIM’s return on investments of (12.00%) compared to a benchmark return of (12.00%). The return is a result of losses on US equities of (21.76%), international equities of (27.35%), fixed income securities of (10.27%) and slightly offset by gains on alternative investment securities of 0.56%, lead by strong returns on our real estate investments.

While the first nine months of 2022 saw a 12% negative investment return driven by a drop in equity markets and fixed income securities, EIM remains confident, based on the diversity and allocation of its investment portfolio, that the long-term investment returns are on track and achievable, with 10-year average above 4%.