2016 WAMIC Directors Seminar Strategic Planning Dreams to Delivery 2016 WAMIC Directors Seminar Madison WI –November 9, 2016 Wausau WI – November 16, 2016

Kimberly Ersland Reinsurance Regional Marketing Manager Grinnell Mutual Reinsurance Company “Flaming enthusiasm, backed by horse sense and persistence, is the quality that most frequently makes for success.” --Dale Carnagie «««««««« ««««««««

Disclaimer NOT LEGAL ADVICE Variance by company

Objectives Developing a business plan Establishing & Monitoring Benchmarks Evaluating Organizational Risks Importance of Disaster Recovery & Business Resumption

WHY?

Strategic Planning How well do you know your company? Why are you in business? In what areas are you most profitable? Who are your customers? Who do we want our customer to be? What are consumer expectations How do we meet those expectations What products/services set us apart from our competition? What were your goals for 2016? How viable are we for the future? What is the future of our industry? Can we survive doing “What we’ve always done”? How do you make competent decisions that keep your mutual financially strong and viable?

What Strategic Planning is NOT It is not another task for management It is not a one time, short meeting endeavor It is not a check mark in the “to be completed” column It is not eliminating all risk

Participants Facilitator Board of Directors Management Team Members Optional: Agent &/or Consumer representatives Keep to manageable number of participants

HOW?

SWOT Analysis Strengths Weakness Opportunities Threats

Critical Issue Method THREE QUESTIONS 1) What are the critical issues facing our organization today? 2) What are the desired outcomes of those issues? 3) What do we need to do to accomplish the desired outcome?

1) Critical Issue Company Situation Market Consumer Agency Force Opportunities Weaknesses Strengths Threats Company Situation Market Consumer Agency Force

2) Desired Outcome Financial Strength Product/Service Technological Advancement Will be unique to company

3) Plan to Accomplish Path Resources Financial Talent Responsibility

WRITTEN PLANS, PLEASE!!

7 Sections of Business Plan 1) Executive Summary Highlights Mission & Objectives Keys to Success 2)Company Description Board of Directors Company History Past Performance Location & Facilities

Business Plan… 3) Products & Services Description of Products & Services Competitive Comparison Sales/Promotional Literature Technology Future Products & Services Planned

Business Plan… 4) Market Analysis Market Segments Market Analysis Business Associations Agency Force Reinsurance

Business Plan… 5) Strategy & Implementation Marketing Strategy Positioning Pricing Promotion Growth Strategy Strategic Alliances Services & Support

Business Plan… 6) Management Summary Organizational Structure Manager Team Members

Business Plan… 7) Financial Plan and Projections Historical Data Projected Data Analysis of Financial Data Trend Analysis Ratio Analysis Premium forecast Total By policy/product type Personnel Plan

Benchmark Definition Establishing Monitoring Point of reference from which measurements can be made Establishing Monitoring

Key Performance Indicators for Mutual Industry Gross Written Premium/ Surplus Net Written Premium / Surplus Loss Ratio Expense Ratio Combined Ratio May be unique to your mutual and goals

Plan Act Adjust Review Measure & Evaluate progress TIMELINE Benchmark Analysis Resource Alignment Implementation Strategy & Goal Setting Plan Act Adjust Review

Disaster & Recovery Are all disasters storm related?

Business Resumption Loss of building Temporary Location Contact Information for Board of Directors Team Members Reinsurance Vendors Contractors Utilities/Services Method of mass communication to policyholders Data Access/Availability Have a written plan that has been reviewed with board, management and staff

Business Resumption… Employee Vacancy Death/Illness/Injury Termination Other Written Succession Plan is Imperative Associated Agreement Temporary Hire Key decision makers

Business Resumption… Catastrophic event CAT provider agreement prior to event Reinsurance Notification Staff Notification influx Claims processing for dissemination to adjusting team Claims payments Updated forms manual to provide to all adjusters Notice to policyholders in effected areas Have a WRITTEN PLAN that team members can refer to during the event.

Business Resumption… Technology/Cyber Attack Be proactive! Cyber security training Cyber insurance policy Coordinate with vendors and have a written plan in the event breach or attack occurs.

Identification of Organizational Risks Strategic Planning Business Planning Business Resumption Planning

REMEMBER

Kimberly Long Ersland 608.584.5383 kersland@gmrc.com