An Overview of Delaware Grange Mutual Insurance Company

Delaware Grange Mutual Insurance Company (DGMIC) is a regional property and casualty insurer providing coverage exclusively in Delaware. This article will provide an overview of DGMIC including its history, leadership, financials, products, and operations.

Company History and Background

DGMIC was originally chartered by the Delaware legislature in 1887. The company operates under a perpetual charter granted in 1924.

As a mutual insurance company, DGMIC is owned by its policyholders rather than shareholders. This structure helps align the interests of the company with providing good service and products to its members.

Headquartered in Dover, DE, DGMIC maintains a network of independent insurance agents throughout the state. The company is focused primarily on personal and commercial property and liability lines.

Leadership and Management

DGMIC is overseen by a 14-member board of directors. The board includes a mix of current and former independent agents who sell DGMIC policies as well as other outside directors.

Key executives include:

• President – Warner J. Clark
• Vice President – William J. O’Day
• Treasurer – Ronald Martin
• Secretary – Janice Mayo

There are several committees that report to the board including Audit, Underwriting/Products, Personnel, and Executive.

Financial Overview and Performance

As a smaller regional insurer, DGMIC has an admitted asset base of $1.8 million as of 2020. Surplus stands at $1.5 million.

The company has seen consistent net underwriting losses over the past several years offset by investment income. The net loss in 2020 was $46,663. Surplus levels have remained steady.

A.M. Best, a leading insurance rating agency, currently assigns DGMIC a Financial Strength Rating of B (Fair) and an Issuer Credit Rating of bb. The company faces challenges from its geographic concentration and exposure to weather-related losses.

Products and Premiums

DGMIC writes approximately $1 million in direct premium annually. Policyholders are located across Delaware.

Major products include:

• Homeowners Insurance – 55% of premiums
• Commercial Multi-Peril – 8%
• Farm Insurance – 3%
• Other liability – 4%
• Fire Insurance – 29%

To manage risk, DGMIC cedes about 70% of its premiums to reinsurers. This provides a buffer against potential losses. The company maintains aggregate reinsurance protection.

Operations and Distribution

DGMIC exclusively serves customers in Delaware through its network of independent insurance agents. This provides consumers local expertise and choice in providers.

The company has increased its retention limits in recent years to allow for growth. It also has introduced new product options such as mobile home and business owners policies.

DGMIC aims to balance growth with maintaining adequate surplus and reinsurance protection. Company underwriters monitor results by territory and make adjustments as needed.

Competitive Advantages and Challenges

As a local mutual company, DGMIC focuses closely on the needs of Delaware residents and businesses. Its small size allows for nimble decision-making. Policyholders also may be eligible for dividends in profitable years.

However, limited scale and resources poses challenges in areas like technology and marketing compared to national insurers. The company’s business concentration in one state also leaves it vulnerable to specific regional weather risks and judicial decisions.

DGMIC will need to continue striking a balance between growth, financial stability, and serving its core Delaware market. Its local knowledge and reputation provides advantages but must be coupled with prudent operations.

Conclusion

For over 130 years, DGMIC has provided specialty insurance products to its members residing in Delaware. It fills an important niche focused exclusively on the needs of local policyholders. The company has remained financially steady in recent years but faces both opportunities and challenges looking ahead as a smaller regional insurer.