Insurance Group | 2 President’s Message When we began the new year in January of 2021 we did so with a renewed sense that we were turning the corner and life would soon return to a more normal rhythm. Perhaps it’s better we did not know that the challenges of the global pandemic would linger on for the entire year! These challenging times provide a clear reminder of the valuable role relationships play in every part of our lives. Our team has spent the last 21 months working initially full- time remote and more recently splitting time between office and home to keep our office population at safer levels. We have successfully minimized any negative impact in service levels to members and agents, but doing so has added complexity and strain on our employees and leaders. As we turn the corner to a new year we anticipate the return to a more typical, albeit modified, office environment and a renewed sense of community. In this report we will be providing combined results for the Goodville Mutual Insurance Group, which includes both Goodville Mutual Casualty Company and Reamstown Mutual Insurance Company. Our vision for these companies, managed collectively, continues to be to serve a broader group of members through the mutual insurance model. Mutuality – a community of members sharing risk together – continues to be our guiding purpose! Fortunately, the year brought relatively mild weather and solid underwriting results across our eight states. Driving patterns continued on a slow return towards normal activity as the year progressed, providing favorable loss experience, but a recognition that the reduced claims during the pandemic have likely run their course. Our multi- year efforts to increase our commercial and farm business provided strong growth in those segments and reinforced our resolve to continue on a path that will provide a more balanced book of business. Diligent underwriting, along with good stewardship of expenses and solid investment returns added $31 million to surplus and position us well for continued growth in the coming years. The “A” (Excellent) rating with AM Best, extended to both Goodville and Reamstown, and twelve consecutive designations the Top 50 property and casualty companies in the country reaffirms the long-term financial stability of the company! In addition, we are proud to be recognized among the “Best Workplaces in Lancaster County” during 2021 by our talented team of professionals who diligently work to deliver on our mission. The world we live in and the members we serve continue to change rapidly, requiring us to continue to adapt if we want to thrive well into the future. What does not change is our focus on the guiding principles and values that define us: • Enduring Relationships • Outstanding Service • Competitive Products • Financial Stability In the following pages you will find more detail on our initiatives to continuously improve and deliver on each of these principles. Our vision since 1926 has been to provide stability and protection for our members, while doing business in a way that reflects our deeply held values. I’m especially proud of the way our committed team remained focused on fulfilling our mission during a challenging year. We sincerely appreciate the long-term relationships we hold with agents and members alike. As we begin a new year we are focused forward and fully invested in our mutual success! David Gautsche – President & CEO3 Corporate Objectives – Our Guiding Principals Over the course of our 95 years we have worked diligently to stay true to our mission, vision and purpose. We expect to deliver sustainable and profitable results, but first and foremost we hold ourselves accountable to conducting our business with our member’s interests in mind. We value the trust our members, employees, agents and business partners place in us and make every decision with that trust in mind. The four pillars of our annual plan: Enduring Relationships, Competitive Products, Outstanding Service, and Financial Stability, focus our investment of resources and talent throughout the year. Significant accomplishments for the past year include: • Our marketing team is constantly on the lookout for new agency partners that align with Goodville’s mission. This past year 19 new agency relationships were added with an intentional focus on agencies who can help the group grow our Commercial & Farm business. • Consistent growth, as well as the changing nature of the business, requires us to expand and diversify the talented group of 153 employees that make up the Goodville team. The team now reflects a healthy blend of institutional knowledge and external experience. • Continued growth and investment in the organization, its people and the technology resources will allow our employees to seamlessly adapt to a hybrid work environment, offering our team members more flexibility and the company a more resilient infrastructure. • Town hall meetings, small group meetings with the President, new employee orientation, employee appreciation lunches and company outings connect us as a community and allow for healthy communication of our strategy and vision. • Commercial class offerings were expanded to include new classes of business and coverage endorsements to better serve our existing commercial clients. • Significant investment in developing a more segmented and sustainable personal automobile rating model designed to reward longevity and exceptional driving behavior. • Premium written grew by 5.2% in spite of the fact that personal auto rates were reduced in every state. Commercial lines business was an especially bright spot with growth of 16.5%. • External validation of financial strength evidenced by the “A” (Excellent) rating from AM Best and the inclusion in the Ward’s Top 50 for the 12th consecutive year, which recognizes the 50 most efficient, effective and financially stable property and casualty companies in the country. • A comprehensive evaluation process, with a goal of selecting our next generation policy processing and billing platform, will be completed before year end and move into implementation during the coming year. • Based on our commitment to member experience, Claims Service was identified as the first priority in our corporate digital strategy upgrade. The new Claims system is in final testing stages and will go live in the first few weeks of the new year, providing both members and agents an improved claims experience. • Our Digital Strategy is purposefully driven by a quarterly planning process to support a more agile organization as we ensure our resources are focused on the most critical priorities.4 CHARITY OF CHOICE Relationships and local reputation are essential to help Independent Agencies gain and grow brand awareness within their communities. At Goodville Mutual, we want to support agencies with community engagement efforts. We’ve learned from our Safe@Home Campaign during year one of the pandemic just how important it is for agencies to connect with essential community resources. That is why Goodville continued the momentum gained in 2020 to launch the Charity of Choice campaign in 2021! Donations were made through local independent agents to food banks, shelters, children’s homes, and churches or a specific ministry, such as a local food pantry. Together with our agents, the Goodville donations touched many lives with checks delivered to 52 charities. Below are just a few of the many photographs collected and shared on social media during the three months of contributions. 5 Employee Milestone Anniversaries Employee Designations 45 35 30 25 20 15 10 5 45 Years Barb Dessen — Office Specialist - Mailing - June 1 35 Years Karen Gingrich — Product Development Specialist - Sep 29 30 Years Sharon Foor — Claims Supervisor - Apr 22 25 Years Scott Myers — Senior Claims Representative II - Jan 15 20 Years Denise Hefflinger — Claims Representative I - May 2 Amber Trausch — User Acceptance Testing (UAT) Analyst - May 7 Lisa Hoover — Senior Claims Representative I - Sep 12 15 Years Mike Zimmerman — Vice President of Claims - Oct 30 LeAnn Hartzler — Senior Agent & Member Support Specialist - Dec 29 10 Years Thelma Stoltzfus — Personal Auto Underwriting Processor I- Jul 14 Paul Styer — Farm Underwriter - Jul 25 Wilma Ebersol — Accounts Receivable CSR Supervisor - Jul 25 Melanie Zeiset — Staff Accountant - Dec 12 5 Years Kevin Filler — Vice President Underwriting - Jan 25 Andrew Jarvis — Software Development Manager - Apr 4 Tina Zimmerman — Actuarial Analyst - May 2 Chase Boian — Desktop Support Specialist - Sep 6 Scott Hershey — Senior Software Developer - Oct 3 Mike Eby Senior Claims Representative II 35 years — June 2021 Jerry Goodpaster Vice President Underwriting 46 years — July 2021 Elmer Landis Senior Actuarial Analyst 38 years — October 2021 Employee Retirement YEARS Phyllis Knape — Product and Compliance Support Associate in Regulation and Compliance (ARC Designation) - Feb 2021 Associate in Personal Insurance (API Designation) - Dec 2021 Ryan Sheckler — Controller Accounting and Finance (AIAF Designation) - Sept 20216 PENNSYLVANIA GOODVILLE 80 REAMSTOWN 96 OHIO 54 INDIANA 20 ILLINOIS 17 KANSAS 19 OKLAHOMA 6 VIRGINIA 29 DELAWARE 6 Headquarters Great Lakes Branch Office New Holland, PA Napoleon, OH OUR INDEPENDENT AGENTS BY STATE We partner exclusively with independent agencies who are active in their communities, selective frontline underwriters and who are a good cultural fit for Goodville. Below we display our agency coverage across our eight state footprint and highlight new agency appointments for Goodville in 2021. DELAWARE: $5,965,249 New Goodville Agents in 2021: Blue Hen Insurance, LLC ILLINOIS: $6,591,765 New Goodville Agents in 2021: Insurance Consultants of Knox, Inc. INDIANA: $7,101,728 New Goodville Agents in 2021: Terri Kelso Insurance Synergy Insurance Group Martin Insurance Group KANSAS: $19,619,762 New Goodville Agents in 2021: Ryan Insurance Rezac Insurance OHIO: $39,269,991 New Goodville Agents in 2021: Sheridan Insurance Agency Heffelfinger Insurance East Side Insurance Agency, Inc. OKLAHOMA: $10,248,064 PENNSYLVANIA: $103,873,843 New Goodville Agents in 2021: Allen A. Shaffer Insurance Gannon Associates Kish Insurance Tompkins Insurance Agencies, Inc. Warren A. Gingrich Insurance Agency, Inc. Dott Insurance Group, LLC VIRGINIA: $16,841,354 New Goodville Agents in 2021: Sanford Insurance RBI Services Creekside Insurance Advisors, Inc.7 OKLAHOMA: $10,248,064 PENNSYLVANIA: $103,873,843 New Goodville Agents in 2021: Allen A. Shaffer Insurance Gannon Associates Kish Insurance Tompkins Insurance Agencies, Inc. Warren A. Gingrich Insurance Agency, Inc. Dott Insurance Group, LLC VIRGINIA: $16,841,354 New Goodville Agents in 2021: Sanford Insurance RBI Services Creekside Insurance Advisors, Inc. Being ‘Back Together’ for the 2021 Partnership Council made for a memorable event! After last year’s virtual format, we were keen to host an in-person meeting to reconnect with those long-term, established relationships and welcome some newcomers into the Partnership group. With 32 Partner agencies represented, we were appreciative that many could join us in Williamsburg, Virginia, despite pandemic-related concerns and travel limitations. The business sessions were informative, with high agent engagement, including Goodville’s Digital Strategy, Product Development update, and new Claims system demo. Tom Torcia from Mutual Capital Analytics provided a personal lines auto update and what the collaborative efforts from MCA and Goodville will deliver to the marketplace in 2022. Of course, time with Dave Gautsche, President/CEO, and interactions with other members of the President’s Team is a perpetual agenda item. With 2021’s location in Historic Williamsburg, the history buffs were in their glory! We also found time for a variety of afternoon activities, including a historic team scavenger hunt and opportunities to explore Williamsburg, Jamestown and Yorktown. The event’s conclusion was the GALA Awards dinner; some of the winners are pictured below. PARTNERSHIP COUNCIL GALA AWARD WINNERS Lehman Insurance Agency, Inc. - PA Rodney Lehman Most New Commercial Lines Policies Most New Personal Lines Policies James L. Bond Ltd. - OH Jim Bond Agency Most New Farmowners Policies Paul I. Sheaffer Insurance Agency Inc. - PA Largest Premium Growth <$1.5M Loman-Ray Insurance Group, LLC - IL Brian Loman Largest Premium Growth >$1.5M Portland Insurance Agency - IN Kyle Champ Lowest 5 yr Uncapped Loss Ratio Franconia Insurance & Financial Services - PA Chad Yoder Longest Continuous Period of Partnership Status Earned Tom Torcia, Chief Analytics Officer at Mutual Capital Analytics8 FRONT ROW FROM LEFT TO RIGHT: James M. Harder, Chairman, Bluffton, Ohio, Miriam E. Shirk, Goshen, Indiana, Carlton L. Miller, Vice Chairman, Boalsburg, Pennsylvania, David C. Gautsche, President/CEO, Lancaster, Pennsylvania, Glennys H. Shouey, Mt. Crawford, Virginia, Lori B. Miller, Archbold, Ohio, Jeremy C. Shue, Goshen, Indiana. SECOND ROW FROM LEFT TO RIGHT: Donald L. Nice, Perkasie, Pennsylvania, Scott Miller, Defiance, Ohio, Allon H. Lefever, Treasurer, Lancaster, Pennsylvania, A. Pete Wyse, Wauseon, Ohio, Andrew Dula, Lancaster, Pennsylvania. THIRD ROW FROM LEFT TO RIGHT: Sanford L. Alderfer, Harleysville, Pennsylvania, Gregory A. Edwards, Napoleon, Ohio. PRESIDENT’S TEAM BOARD OF DIRECTORS Vince Zaffiro Chief Information Officer Philip Shirk Chief Financial Officer Michael Zimmerman Vice President Claims David Gautsche President & CEO Kathy Good Vice President Product Development Kevin Filler Vice President Underwriting Maryfrances Cooper General Counsel Bruce Brizzi Vice President Marketing9 2021 FINANCIALS Assets20212020 Bonds$315,831,562 $281,027,797 Stocks90,839,640 86,427,351 Real Estate6,196,447 6,439,468 Cash & Short-term Investments11,954,599 7,172,945 Premiums Receivable27,703,177 27,404,842 Other Assets3,593,951 2,901,899 Total Assets$456,119,376 $411,374,302 Liabilities & Policyholders’ Surplus20212020 Reserve for Unpaid Losses$72,899,242 $65,420,692 Unearned Premiums82,598,927 78,579,499 Other Liabilities26,861,385 24,890,178 Total Liabilities$182,359,554 $168,890,369 Policyholders’ Surplus273,759,822 242,483,933 Total Liabilities & Surplus$456,119,376 $411,374,302 Underwriting Income20212020 Premiums Earned$189,907,411 $182,579,020 Loss & Loss Adjustment Expense117,858,369 111,869,593 Underwriting Expense56,913,175 53,789,980 Underwriting Gain/(Loss)$15,135,867 $16,919,447 Net Investment Income$17,317,171 $14,033,901 Other Income(51,111) 352,080 Federal Income (Tax) or Credit(4,331,440)(5,013,364) Net Income/(Loss)$28,070,487 $26,292,064 Operating Ratios20212020 Losses Incurred to Premiums Earned62.0%61.2% Expense Incurred to Net Premiums Written29.3%29.0% Combined Loss and Expense Ratio91.3%90.2% $250 $200 $150 MILLIONS $100 $100 0 2017 2018 *2019 2020 2021 $209 ,511, 75 6 $154,437 ,267 $168,345,679 $191,524,448 $199 ,229 ,497 2021 2020 *2019 2018 2017 0 Millions 50100150200250 300 $179,283,622 $187,009,524 $208,444,872 $273,759,822 $242,483,933 Direct Premium Written Policyholders’ Surplus Net Income (Loss) Expense Ratio / Combined Ratio 2021 2017 2018 *2019 2020 $7 ,462, 703 $26,292,064 $16,431,459 $9 ,404,392 $28,070 ,487 70 60 50 40 30 20 10 0 MILLIONS 2017 2018 *2019 2020 2021 140 120 100 80 60 40 20 0 PERCENT AG ES 91.3% 96.2% 92.9% 98.9% 27 .7% 27 .7% 28.0%27 .3% 90 .2% 29 .0% 29 .3% * Reamstown included in Goodville Mutual Insurance Group for 2019 and forward. 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