ANNUAL REPORT 2007
Richard J. Schinler
President and CEO
Celebrating 25 Years of Service
In 2007 Integrity weathered several storms, both literally and
figuratively. Yet through it all our associates met the challenges
Board of Directors
head-on and achieved success. Integrity’s direct premium writings for
the year were $100.1 million. This was a slight drop from 2006, but a
strong showing none the less considering the competitiveness of the
property and casualty marketplace. It also represents the balance
that can be achieved between personal and commercial lines.
Our personal lines premiums grew by 16.4% in 2007, hitting
$57.0 million. At the same time, our commercial business dropped
by 16% to $43.2 million.
Personal lines new business exceeded $10 million for the second
consecutive year and renewal premiums grew by 33.8% over 2006. Douglas P. Buth Alan Brannan Roger A. Formisano
Commercial renewal business was impacted by both economic and Retired CEO President Vice President Strategy
market conditions, but we wrote 15.4% more new business policies APPLETON Property and Casualty
University of Wisconsin - Madison
and attained 7% more new business premium than 2006, a
tremendous accomplishment in the current market.
Profitability was challenged by a number of factors in 2007.
Summer storms and a higher than expected number of large losses
put pressure on both personal and commercial lines combined
ratios. Despite that pressure, Integrity ended the year with a pooled
combined ratio of 100.9.
Beyond the numbers, 2007 was a year of accomplishments at
Integrity. We launched our new subsidiary company, Integrity
Property & Casualty Insurance Company. This company will be
used to write new products in both our commercial and personal
Franklin C. Jesse, Jr. Michael V. Parrott Richard J. Schinler
business segments, expanding new business opportunities for the Vice Chairman of the Board President President and CEO
independent agencies that represent us. Principal ICON, Inc. Integrity Insurance
Gray, Plant, Mooty
We celebrated our fifth anniversary as an affiliate of the Grange
Mutual Casualty Group in 2007. This affiliation continues to pay
huge dividends to Integrity in a whole host of ways. Our pooling
arrangement with Grange enabled us to post profitable results for
2007 despite the challenges noted above. We continue to offer our
agents award-winning technology and expanded products brought
to us by Grange. Internally, integration opportunities contribute to
greater operational effectiveness. Looking ahead, I believe this
relationship will continue to benefit Integrity, our agents, and our
policyholders for years to come.
2008 will hold special meaning for both Integrity and for me,
personally. Integrity will celebrate 75 years in business and I will Thomas S. Stewart Philip W. Stichter Philip H. Urban
reach my 25th anniversary with the company. Looking back, I am The Ohio State University
The Griffith Foundation for
Chairman of the Board
President and CEO
impressed by the evolution of Integrity. We’ve successfully Insurance Education Grange Insurance
weathered market highs and lows, changing economic cycles,
and Mother Nature. We moved into a new corporate headquarters,
technology has become critical to our daily operations, and
premiums have increased five-fold. While the changes are
remarkable, I think I’m most impressed by what has remained
constant over the past 25 years. Our associates have always been
the lifeblood and spirit of Integrity – their steady commitment has
translated into strong relationships with, and a high level of service
to, our independent agency partners, policyholders, and community.
As we look to 2008, we can be proud of what was accomplished
in 2007, but we are also aware of the increasing challenges that our
industry faces. Market conditions, weather risks, and the current
economic downturn all will create pressure on both the top line and
bottom line. Integrity is positioned to successfully cope with that
pressure and maintain our course.
“Thank you for all your help after my injury. Thank you for pushing my
appointments and helping me get back to work.” - Policyholder Comment
Integrity Work Comp Claims Rep
The atmosphere at Integrity is driven by a simple
inherent philosophy: Ease of Doing Business (EODB). We measure our success based
on this guiding principle, and we are happy to report that in
2007 Integrity’s agents rated our personal lines and marketing
departments easier to do business with than our competition
for the second consecutive year. Integrity agents selling Grange Life
insurance ranked Grange better than the competition in seven out of
eight categories. We are pleased to report that all departments
showed marked improvement.
Integrity was also ranked third in the annual survey conducted by
Deep Consumer Connections, Inc. The company asked more than
8,000 independent agents to assess the performance of more than
200 property/casualty carriers on eleven EODB factors, including
underwriting responsiveness, handling claims promptly, providing
effective technology, and acting with the agency’s needs in mind.
“As a regional, Integrity is close enough to note loss
trends, and flexible enough to make adjustments that work
to everyone's advantage.
They're also easy to work with on every level. The Integrity
people never stop thinking of ways to make things user-friendly
for agents, and are always inventing new ways of doing business
that help me help my clients. Their claims service is fast and fair.
And, they're eager to write business.
United Insurance Agencies The fact that they're 100% committed to the Independent Agent
Iowa Network makes Integrity easy to recommend to agents and
Ease of Doing Business® is our goal.
A critical component of Integrity’s service philosophy is to provide our
agents with technology that helps them to be more productive, reduce
turnaround time, and deliver high-quality, personalized service. Our
accomplishments in this area were recognized when we received
the Interface Partner Award from Applied Systems, Inc. for being
one of the best at advancing agency-company interface.
Another EODB factor is providing our customers with competitive
products. Our personal lines department introduced a new dwelling
fire product in all states and expanded our motorcycle program to
Iowa and Minnesota. We strengthened our current commercial
product offerings by adding liquor liability coverage in Iowa and
Minnesota. Our new subsidiary, Integrity Property & Casualty
Company, will enable us to further expand our product offerings.
“The loss control representatives at Integrity range from
22 - 29 years of experience. That experience allows us to
provide customers with common sense insight based on
solutions beyond the books. We're not afraid to look for
alternatives, such as providing our CD/video program. We
feel it is important to provide our customers with tools to help
them, not just point them to safety websites. And, we believe
all customers deserve loss control services, not just the
Integrity Loss Control Manager
“First and foremost, I want to thank you for all your efforts. It amazes
me that it is easier working with an insurance company than with local
repair shops. You have made this as painless as possible, and I greatly
appreciate this. Please feel free to share this with your supervisor as you
deserve a pat on the back!” - Policyholder Comment
Integrity Property Claims Rep
Integrity literally weathered the storm in 2007, as we paid
out more than $7.2 million for storm-related claims. Our associates received a flurry of
claims during June, August, and October. The vast majority of
storm activity took place in Minnesota in the form of hail damage.
Our affiliation with Grange Insurance allows us to financially
weather these storms. We pool our financial results and spread the
risk as a member of a $1.1 billion enterprise; thus protecting the
financial security of our policyholders. Integrity partners with the
Grange Catastrophe Team, which has consistently
outperformed its competition with strong service,
even in the most devastating situations. No matter
the storm, we will be there to fulfill our promise.
In order for the Integrity claims department to
gauge our EODB, we hire third-party vendors to
survey both insureds and agents. Insureds expressed
their satisfaction with a 95% rating, stating they
would recommend Integrity to their family
“In 2007, we launched a claims website on
IntegrityAgent.com. Agents can now report a
claim on-line, find out what action is being taken,
and contact the appropriate claims representative.
We also added a claims center to our newly
designed public website, IntegrityInsurance.com,
Jennifer Bohlmann to help our insureds learn about the claims
Integrity Claims process.”
A year of many weather-related claims.
Claims associates work to maintain this high satisfaction level. They are
quick to respond within a three-hour initial contact goal, and are ready
with a vast array of technology-based tools to aid our policyholders with
fast and fair service.
Based on feedback from our agents, they wanted more online access to
their insureds’ claims information and we delivered just that. At the end
of 2007 we unveiled a new claims website. Agents can now view their
insureds’ claims and email the adjuster directly from a web link. Agents
also have access to claims milestones which include:
• Loss received
• Initial contact
• Payment history
Whatever the weather holds, our claims associates have proven they
have the service philosophy, technology, and resources to excel in
“I joined the Integrity Agency Council in 2007.
I’ve had the opportunity to get to know the
management at Integrity and they really listen
and then make things work.
Everyone we work with has gone above and beyond
what is expected to position our Agency for success
with Integrity Insurance. I really like their
The Vincent Group
commitment to making our job easier.” Wisconsin
“I wanted to let you know that Keith at the auto body shop had
good things to say about you. He said you did a better job on this
claim than most of the adjusters he works with. I just wanted to say
thanks! Not only does that make you look good but it makes our
agency look good too and we appreciate it! Thanks again.”
- Sue Anderson, Core-Vens & Company
Integrity Auto Claims Rep
The month of February 2007 commemorated the
five-year anniversary of the affiliation of Grange Mutual Casualty Company with Integrity
Mutual Insurance Company.
Our two companies agreed to create an innovative partnership
using a merger model that was new to the insurance industry.
We sought improved financial stability and automation capabilities,
while Grange looked to expand geographic operating territory.
As part of the affiliation, we pooled underwriting results, allowing
us to achieve a shared AM Best rating of “A” Excellent, while also
sharing technology and other benefits across the two organizations.
In the five years of affiliation, we’ve seen tremendous benefits
and reached important milestones. We’ve added new products
and enhanced shared technology. We’ve reached $100 million
in direct written premium for the first time in company history,
while Grange celebrated reaching the $1 billion mark.
“The affiliation between Grange and Integrity
has truly been a win-win for our agency and our
customers. The new technology we’ve gained
access to makes it easy for our staff to work
smoothly, efficiently, and professionally, which
in turns helps our clients.”
New products on the horizon.
As we reflect back on 2007, it is exciting to look forward to the
beginning of a new year. In 2008 Integrity will offer a new monoline
commercial auto product, AutoAccel®. We will also be introducing
a new commercial property policy.
In personal lines, we will be busy preparing for the launch of new
products later in the year. These new products will expand our market
position, creating new business opportunities for agents in all three states.
Along with the new products will come a new easy-to-use format on
our Integrity agent quoting system, GAINWeb®.
Integrity is poised and ready to start a new day, a new chapter in
our history. As we celebrate 75 years of service in 2008, we’ll continue
to build on the tradition of service set forth by our forefathers,
“Insurance founded on the Golden Rule.”
“Integrity understands the important role training plays
in EODB. That's why we provide support to our agency
partners, helping them utilize our technology. We offer
training via WebEx, an online program that allows
participants to join a training session right from
Balance Sheet (000 omitted)
Financial Results Dec. 31, 2007 Dec. 31, 2006
Bonds $ 46,126 $ 43,696
Stocks 9,033 8,631
Real Estate 2,176 2,347
Cash and Short-Term Investments 5,511 3,173
Agents’ Balances/Premium Due 7,869 7,697
Accrued Investment Income 483 486
Other Assets 1,421 3,006
Total Admitted Assets $ 72,619 $ 69,036
Liabilities & Policyholders’ Surplus
Reserve for Losses
and Loss Expenses $ 20,773 $ 20,884
Unearned Premiums 15,901 15,802
Accrued Expenses, Accounts
Payable, and Other Liabilities 6,278 5,389
Total Liabilities 42,952 42,075
Policyholders’ Surplus 29,667 26,961
Total Liabilities and
Policyholders’ Surplus $ 72,619 $ 69,036
Statements of Income (000 omitted)
Dec. 31, 2007 Dec. 31, 2006
Premiums Earned $ 43,890 $ 41,926
Losses (23,201) (22,174)
Loss Adjustment Expenses (4,990) (4,808)
Other Underwriting Expense (16,025) (14,110)
Net Underwriting Gain (Loss) (326) 834
Net Investment and Other Income 3,467 2,783
Dividends to Policyholders (96) (167)
Federal Income Taxes (1,056) (1,239)
Net Income $ 1,988 $ 2,211
Statements of Changes in Surplus (000 omitted)
Dec. 31, 2007 Dec. 31, 2006
Beginning of Year $ 26,961 $ 24,438
Net Income 1,988 2,211
Change in Unrealized Gains 154 400
Change in Net Deferred Income Tax 177 (34)
Change in Non-Admitted Assets 387 (54)
Policyholders’ Surplus, End of Year $ 29,667 $ 26,961
Senior Management Team
Mary Jo Buchberger - VP Finance, Richard J. Schinler - President and CEO, Cathy Beaudin - VP Marketing,
Gary Gudex - VP Commercial Lines Underwriting, Carolyn Peterson - Personal Lines Underwriting Manager
(Front) Cindy Heindel - VP Human Resources, Jon Match - VP Claims
30 120 120
25 100 100
20 80 80
15 60 60
10 29.7 40 40
24.4 27.0 96.4 100.3 100.1 94.4 97.8 100.9
19.3 22.3 87.0 95.2 98.1 93.7
5 20 20
0 0 2003 2004 2005 2006 2007 0 2003 2004 2005 2006 2007
2003 2004 2005 2006 2007
Surplus Direct Written Premium Combined Ratio
(in Millions) (in Millions)
To protect the financial security of our policyholders.
To build financial strength for the benefit of our
policyholders and independent agents by leading
our industry in profitable growth.
At Integrity we will:
Operate within a high-performance culture.
Sustain successful relationships with our agents.
Provide the right products, for the right risks, at the right price.
Seek opportunities to increase our market share.
Deliver exceptional service and technology.
Produce the highest levels of quality and efficiency.
We will measure our performance by maintaining a combined ratio
of 97 and growing at a rate equal to or greater than the industry.
2121 East Capitol Drive, P.O. Box 539
Appleton, Wisconsin 54912-0539
A Member of the Grange Mutual Casualty Group