Although our business model is evolving, the overall strategy of providing insurance coverage to middle-market businesses one policy at a time and doing what we say we will do has stood the test of time and helped us succeed for more than 60 years. When it comes to managing our investments, we are very conservative, as evidenced by a bias toward owning high-quality debt instruments or bonds. This limits our exposure to market downturns and ensures our ability to meet our obligations to policyholders and claimants under a wide range of conditions.

The predictable stream of investment income derived primarily from our bond portfolio is our second largest source of revenue and a critical supplement to our insurance operations. Because we are not solely dependent on premiums, we are able to provide insurance coverage at competitive rates while also building policyholders’ surplus to support future growth and handle large events, such as hurricanes.