INSURANCE MATTERS Quality results By Gary Buckner Executive Vice President and General Manager, Oklahoma Farm Bureau Insurance
s projected in the annual policyholders meeting, we began 2021 with a surplus of $151 million, which included the outstanding surplus loan of $12.8 million as well as conservative business goals for the year. As the year progressed, our storm season began sooner than normal with the historic “Uri” ice event in February and came to a late end in October with a catastrophic hail event. The time in between seemed to disappear more quickly each day as all employees and agents were busy assisting members and counties with the challenges presented by the economy. At one point in the year, the cost of goods sold was changing faster than we could assess the claims being presented. In total, the 2021 storm season produced roughly $45 million in losses, and we anticipate this number to grow in 2022 as we continue to work through inflation issues. In addition to an unusual storm season and challenges in the construction environment, we witnessed the escalating cost of auto repairs, auto replacements and injuries sustained in auto accidents. Through experience and time, it became evident that neither Oklahoma Farm Bureau Insurance nor the insurance industry could attribute these cost increases to any one factor. Overall auto claims recorded an unprecedented record high in severity with some aspects increasing above 30%. Even with all the challenges presented last year, we were still able to do what we strive to do best: provide exceptional service, honor our financial promises and improve our company’s financial outlook for its continued success. So, as we close the book on 2021, I’m thankful to report that despite the hurdles, OKFB Insurance was still able to produce solid results. We ended 2021 with a policyholder surplus of
$166 million while retiring $9 million of surplus notes, which is a record-high surplus. Our agents played a critical role in this endeavor by producing a much-welcomed policy count increase – a first since 2007. All in all, everyone’s commitment to OKFB Insurance not only brought 2021 together but pushed us further ahead in our recovery. If you reflect over the past six years, we have improved our capital position by 77% while paying off $31 million in debt. It is amazing what we can accomplish when we communicate and work together. I am also pleased to report that our hard work and stamina has been recognized by a globally respected — Gary Buckner entity in the insurance industry. OKFB Insurance received an upgraded long-term credit rating of bbb+ (good) from A.M. Best, a credit rating service that specializes in insurance. I am especially proud that OKFB Insurance is the first U.S. company to get four full upgrades and two outlook changes in less than 10 years. As we try to predict what 2022 will bring our way, our ultimate focus will be protecting our capital position. Whether it be storms, COVID or increasing inflation, we will do whatever it takes to keep moving the company forward and take care of our members. I appreciate your continued support of our great company and thank you for allowing me to serve as your Executive Vice President and General Manager.
Whether it be storms, COVID or increasing inflation, we will do whatever it takes to keep moving the company forward and take care of our members.
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