The Subscribers' Advisory Committee Chairman
Dear Fellow Members,
When I started to think about this letter, the Northeast was gripped in a historic cold spell, and our insurance company was actively engaged with us to prevent as many water damage losses as possible. From a claims perspective, 2017 was marked by unprecedented hurricane landfalls in Florida and Texas and record-setting wildfires in California. Throughout these events, the PURE Subscribers’ Advisory Committee (SAC) was highly engaged with management and their Claims team. I am most proud of the diligence and collaboration of this group.
We all take great pride in our affiliation with PURE. The past 12 years have been an extraordinary success story for PURE—to have played a small part in that success is deeply satisfying to everyone on the committee. By our committee name and by statute, our role is largely advisory; we take seriously the opportunity to share our views with management on behalf of PURE members, assuring their commitment to a strict alignment of interests with members and the delivery of a service standard that is the nonpareil in the insurance industry.
Our principal statutory responsibility centers on procuring an audit, and that is where we made great progress in 2017. We formed an Audit Committee composed of four members of the SAC with financial and regulatory experience. We developed and affirmed our charter and laid the groundwork for future skill-building to make us even more effective. As we have shared briefly in the past, PwC began working with the parent company of our Attorney-in-Fact (i.e., PURE’s management team) on tax matters in 2016, while we maintained our longstanding audit relationship with EisnerAmper. By all accounts, the PwC tax relationship has been a great success. For the parent company, they identified ways to improve all of the various state tax obligations, and, most important for PURE, they identified a tax treatment election that would allow PURE to participate in a combined tax filing with the holding company, resulting in a tax benefit of nearly $20,000,000 to PURE. In 2017, we had every expectation that we would extend the relationship with PwC from tax to audit. However, the Audit Committee of the SAC, along with management and the Board of Directors of the holding company, made the decision to extend our successful audit partnership with EisnerAmper for at least one more year and retain PwC as our tax partner. Throughout the selection process and ongoing review and oversight, our Audit Committee and the full SAC met frequently and demonstrated strong, independent judgment. I reflect on the many hours my SAC colleagues and I worked on these matters as some of the most positive contributions we’ve collectively made to PURE and the membership.
2017 was also a year in which we enjoyed many encounters with the PURE membership, none more satisfying than when we met in December for our quarterly meeting at the Ocean Reef Club in Key Largo, Florida, just two months after Hurricane Irma’s landfall. With the help of our Chairman Emeritus, Bill Wilson, we met with nearly 100 active PURE members and their family and friends for a very engaging evening. We heard stories of praise for the PURE Claims team, the outreach of the Member Advocates and the resiliency of our membership in the face of a historic storm. Mostly, though, we had the opportunity to make a personal connection with the very insightful, talented and accomplished men and women who make up the PURE membership.
Over the course of the year, we had detailed quarterly operational reviews with management. We met with hundreds of independent insurance brokers who represent PURE and other insurance companies. These professionals are a powerful network and consistently praise PURE for their commitment to an exceptional member experience. We also meet annually with the Board of Directors of the holding company as part of our commitment to ensuring all stakeholders’ interests remain aligned. I can report with confidence that the owners of the for-profit entities within the PURE Group of Insurance Companies are in sync with the members of our committee.
While insurance can be complicated, this alignment is straightforward: the fee-based Attorney-in-Fact attracts capital and capital flexibility that makes PURE stronger than it would be on its own. The capital efficiency of this reciprocal structure gives PURE a competitive advantage over stock-owned insurers. Most important, PURE’s members are at the center of the equation, where service comes first.
I look forward to the opportunity to meet many of you this year and beyond. I thank you for choosing PURE for your family’s insurance needs and hope that your satisfaction with PURE will make you an enthusiastic ambassador for this extraordinary company.
James H. McLaughlin
Chairman, Subscribers’ Advisory Committee