SUMMERSIDE - P.E.I. Mutual Insurance Company has ended its fiscal year with a net income of $1.1 million.
© Submitted photo
The new executive of P.E.I. Mutual Insurance Company was elected following the companyâ€™s 2014 Annual Meeting held on April 8. Incoming president, Gordon Vessey (right) accepts the gavel from outgoing president, Brian Annear.
Rudy Smith, corporate treasurer, said a large increase in claim payments had a significant negative impact on the financial results, as compared to the previous year.
He said the majority of this increase resulted from damage caused by the perils of fire and water escape. The board of directors has declared a 10 per cent mutual rebate for 2014, to be given as a discount or reduction in premium at the time of policy renewal.
Company CEO, Terry Shea, said that water and sewer backup claims have been consistently increasing over the past ten years. He said this is mainly attributed to the manner in which new homes are being designed and used.
Laundry facilities are now being placed on the upstairs level of the home resulting in significant damage to the dwelling when a water pipe bursts. Basements that were once left unfinished are now finished and furnished with very expensive materials that are damaged when water migrates to the basement, he said. In 2013, P.E.I. Mutual paid a total of $2.33 million for 307 water escape claims.
Shea stressed that there are many effective ways for homeowners to reduce their risk of loss when it comes to water damage.
In the 2013 annual report, P.E.I. Mutual included a two-page educational insert as a means of bringing more awareness of the risks, costs and measures to protect against water and sewer back up damage.
Outgoing President, Brian Annear, was generally pleased with the companyâ€™s financial results for the 2013 fiscal year.
He said the company continues to grow its policyholder base, which now exceeds 32,000 policies under the companyâ€™s farming, fishing, residential, and commercial lines of insurance.