There was a quiet sense of accomplishment as the 2018 annual meeting of the MCIT membership was convened. This year’s gathering celebrated not only the accomplishments of 2018 but more notably, the successes of the past 40 years of the organization.
Shortly after calling the meeting to order, Chair Scott Sanders asked MCIT Finance Manager Cheri Donovan to present the financial status of MCIT. Donovan’s message reaffirmed the benefits of members’ commitment to manage risk and control losses as represented with rate stability and the multiyear trend of aggregate rate reductions in both divisions.
In addition, careful investment strategies and positive financial policies of the board continue to return dividends to members. Although not guaranteed, the board is committed to returning funds to members when appropriate.
Donovan reported that MCIT has again received an unmodified audit opinion for 2017 from the independent audit firm of Eide Bailly LLP.
Items of note from the financial statement include:
- Member contributions of $35.1 million represent a $1.9 million decrease from 2016. The difference was influenced by aggregate rate decreases for both divisions.
- Net investment activities yielded $4.5 million in income, an increase of $1.7 million from 2016.
- Claims paid and changes in reserves decreased significantly from $19 million in 2016 to $16.3 million in 2017. The decrease is a result of reserve adjustments at year end from the actuarial analysis, which reflects fewer DPPA claims and the corresponding decrease in the Trust’s monetary exposure and larger liability claim payments in 2016.
- Reinsurance premiums paid in the amount of $4.5 million remained fairly constant compared to $4.6 million in 2016.
- 2017 revenues were $39.9 million compared to $29.7 million in expenses. MCIT’s 2017 year-end fund balance was $83.9 million.
- A dividend of $10.332 million was returned to members.
Donovan also provided a report on the unaudited financial statements of MCIT as of Sept. 30, 2018. Of particular note:
- Member contributions of $25.1 million are $600,000 less than at that time in 2017, which is influenced by rate reductions in 2018.
- Net investment activities total $3.1 million, which is comparable to earnings at the same time in 2017 at $3.2 million.
- Decreases in total paid claims of $13.9 million compared to $15.5 million as of Sept. 30, 2017, which can be attributed to several large property claim payments arising from wind, water and fire damage in 2017.
- Total revenues year to date are $23.9 million, and total expenses year to date are $24.2 million.
- A dividend of $11.75 million was declared earlier in 2018 and paid in November.
40 Years Strong and Counting
Following the board election (see page 2 article), MCIT Executive Director Robyn Sykes congratulated the membership on its 40th anniversary. She highlighted decisions and events that have contributed to the success of the organization, such as:
- electing a board that is representative of the membership.
- constructing the MCIT headquarters.
- changing MCIT’s name (“insurance” to “intergovernmental”).
She reminded the group that MCIT’s efforts in serving the membership have caught the attention of several national associations, which resulted in staff presenting at national conferences and MCIT’s being honored with national awards.
With the financial strength of the organization and responding to member input, Sykes announced three coverage enhancements for 2019:
- General liability is expanded for use of drones for all county operations.
- Liability coverage is introduced for Class III dams as defined by the DNR.
- Coverage limits for data compromise and cyber liability increase for counties from $50,000 to $100,000 (for each of the four areas of coverage). Also, members have the ability to purchase higher limits if desired.
Sykes attributed the success of MCIT to members’ engagement and loyalty during the past four decades. For the immediate future, she focused on opportunities to engage MCIT in 2019.
With members’ continued commitment and support of MCIT, Sykes said she sees no limit to the future success of the organization.