As we reflect on the past year, I am proud of the strength, discipline and purpose that continues to define our company.

In a year marked by a volatile marketplace, evolving customer expectations and increasing risk complexity, we remained focused on what matters most: protecting our policyholders and delivering long-term value. Our financial results reflect that focus. We maintained a strong capital position, disciplined underwriting performance and prudent investment management, enabling us to meet our obligations today while preparing for the challenges of tomorrow. Total property and casualty change in premium written grew by over $1.1 billion, or 8%. The Auto-Owners Life Insurance Company also had another solid year and received over 35,700 life, disability and annuity applications. We are thankful for the business from our independent agency partners.

In-force policy count decreased by 1.7%, bringing the total number of policies in force to more than 6.2 million. This shift reflects a more competitive environment and a continued focus on maintaining a healthy, profitable book of business. Aided by an excellent year of returns from our investment portfolio, policyholder surplus increased to more than $18.2 billion. We have all the capacity we need to support premium and policy count growth for years to come.

All three of our affiliates enjoyed another outstanding year:

• Atlantic Casualty Insurance Company (our excess and surplus lines subsidiary) continued to implement a strategic plan to address market volatility in the excess and surplus market.
• Concord General Mutual (our affiliate operating in the four northern-most New England states) experienced its second year in a row with profitable growth.
• Capital Insurance Group (our subsidiary in the five Western states) had its fifth consecutive year with profitable growth.

Looking ahead, we remain optimistic and prepared. While industry competition and other external challenges emerge, our mission will not. We will continue to manage risk responsibly, adapt thoughtfully and act in the best interests of those who place their trust in us.

Jamie P. Whisnant, Chairman & CEO