2020 Annual Report

President's Message

President’s Annual Message to the Members


I am happy to report that the Society is thriving despite the global pandemic’s challenges this past year. Our staff transitioned to working from home with no furloughs, layoffs, or Payroll Protection Plan (PPP) Loans; we implemented paperless billing to make things easier for our members; and, even with increased storm losses and higher construction materials costs, our surplus at year-end hit another all-time high. Below are the highlights of our performance in 2020.

Balance Sheet

  • Admitted assets, as of December 31, 2020, were $355 million, representing an increase of $32 million or 10% over 2019. The performance in our equity portfolio drove this increase.

  • The Society’s domestic investment portfolio realized a total return of 14.9% in 2020. Our domestic equity portfolio, comprising 97% of our total equity portfolio, increased 18.4% compared to the S&P 500 return of 18.4% and the Lipper Large Cap Core Equity Index return of 16.7% for 2020. Since January 1, 2000, our domestic equity portfolio has had a cumulative return of 270.3%, compared to the S&P 500 cumulative return of 254.9% and the referenced Lipper index cumulative return of 171.6%. The 3% of our equity portfolio allocated to international stocks, through two Vanguard index funds, returned 12.2% on a weighted average basis during the year.

  • The fixed income portfolio returned 6.5% for the year, compared to the Barclays Intermediate Government/Corporate Index return of 6.5% and the Barclays Intermediate Treasury Index return of 5.8%.

  • Since January 1, 2000, our fixed income portfolio has had a cumulative fixed income return of 238.9%, compared to those of the referenced Barclays indices of 152.4% and 128.8%, respectively.

Income Statement

  • Gross premiums for 2020 increased by 2.3% to $52.4 million and, based on our assessment model, net premiums earned grew to $10.3 million for 2020, an increase of 9% from the prior year.

  • Incurred losses totaled $13.8 million, an increase of 83% over the prior year. This increase was mainly due to several storms and large losses. It was also caused by a rise in residential construction costs from building material production delays caused by the pandemic, and higher material and labor demand from increased home improvement activity.

  • Of the $13.8 million in losses in 2020, the nature of the events giving rise to the losses are as follows: 44% from windstorm or hail, 22% from water damage from plumbing, heating, and air conditioning systems, 20% from fire, and 14% from all other causes.

  • We realized capital gains (net of taxes) of $4 million from our investment portfolio and used this amount to offset much of our increased expenses and losses. As a result, the Society experienced a net loss of only $1.5 million for the year, as compared to a net gain of $3.6 million from the prior year.

  • The Society has been assigned a Financial Strength Rating of A (Excellent) from A.M. Best Company and a Financial Stability Rating of A from Kroll Bond Rating Agency.

2021 Assessments

  • Our strong investment performance offset our increase in claim frequency and severity. Therefore, our 2021 base annual assessment rate remains at 22%.  An additional assessment of 22% will apply to secondary residences, and an additional assessment of 10% applies to coastal properties located in designated territories.

  • Due to the rise in construction costs, our insured property values are being increased by 5% on a state-wide basis for 2021 based on E2Value’s residential construction cost indices for Virginia. If you feel your coverage needs to be adjusted, we are always willing to re-inspect your property and re-evaluate the amount of coverage you need.

As always, we appreciate your cooperation and support and welcome any questions you may have about the Society or this Annual Report.

Sincerely, 

Jeffrey S. Wrobel, Sr., CPCU, A.U., AIT
President

Income & Expenses

Additional Points of Interest

  • The frequency and severity of water damage losses remain high. The Society continues to partner with FLO by Moen to provide members with a smart leak detection and prevention device at a discounted price of $225 (plus tax) installed. Visit meetflo.com/MASOV to learn more and purchase your device.

  • Annually, we remind you of the optional property coverage endorsements available for purchase from the Society. Click here for more information.

  • One of our goals for 2021 and beyond is expanding membership in the western cities of Virginia. If you have friends or family living in towns like Warrenton, Harrisonburg, Roanoke, Salem, Lexington, or Winchester, we hope you'll recommend us to them. Referrals are the highest compliment and help strengthen the Society now and in the future. Click here to see how you can help.

  • If you haven't already subscribed to our monthly newsletter, you may sign up here. We present helpful articles on maintaining the security of your home, update you on coverage options and current offers, and fill you in on Society news. The newsletter has garnered some high praise from the over 8500 members that are currently receiving it.

  • We continue our members to consider using our paperless options for your billing and general correspondence. You can sign up by following these instructions.

  • We have recently begun offering UM/UIM (uninsured motorist/under-insured motorist) coverage as an add-on to your umbrella policy (PULP) with us. You can learn more about it here, or contact us for more information.

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