Constellation Financial Highlights: 2016

Bill McDonough, President and CEO, Constellation

Constellation, Inc., the largest medical professional liability organization in the Midwest and Mountain States, completed 2016 in a strong financial position. For the year, we reported increased members’ surplus, strong net income and outstanding customer retention. In addition, each of our three insurance companies received an “A” (“Excellent”) rating from A.M. Best, the leading insurance industry rating agency.

Our ongoing financial strength enables us to deliver superior service to our members while also investing in opportunities to drive future growth. Ultimately, our solid financial position enables us to achieve our mission to help physicians and all those who devote their lives to health care attain their dream — to help, heal and serve.

Increased members’ surplus

For 2016, members’ surplus, an indicator of financial strength and stability, totaled $346.4 million, up 3.5 percent over 2015. These funds are available to cover future obligations and invest in new opportunities to increase value for our members.

Strong net income despite market pressures

For the past several years, increased consolidation and competition in the health care industry, along with high levels of available capital that is placing downward pressure on premiums, have contributed to a challenging market. In 2016, net premiums earned were $140.0 million, down from $145.1 million in 2015. Despite these market pressures, Constellation reported net income for the year of $11.0 million.

Strong customer retention

Nearly 99 percent of Constellation’s insurance clients chose to continue their policies with one of our companies rather than switch to a competitor in 2016. We take pride in the trust our clients place in us — and are committed to providing personalized service and innovative offerings that will continue to earn their trust and loyalty.

“A” rating

Industry rating agency A.M. Best affirmed the financial stability of our insurance companies with an “A” (“Excellent”) credit rating after reviewing our 2016 financial results. It announced “A” (“Excellent”) ratings for MMIC, Constellation’s founding member company, which has a leadership position in the Midwest; UMIA, the leading professional liability insurance provider in the Mountain States; and Arkansas Mutual Insurance Company, which serves physicians in Arkansas.

A partnership strategy to drive growth and extend service

In 2016, Constellation marked its sixth year as a mutual holding company. As the U.S. health care market continues to change, we remain committed to the strategy that led to our formation: to bring together strong partners, such as MMIC, UMIA and Arkansas Mutual, to extend our reach, drive growth, achieve efficiencies and invest in innovative risk management solutions that meet the evolving needs of our customers. Ultimately, by supporting physicians and other providers in their quests to improve patient care, reduce costs and enhance the patient experience, our vision is to make a positive impact on the delivery of patient care — and ensure the collective success of all our partners. We are grateful for the opportunity to serve our valued clients and the broader health care community.

2016 Financial Highlights

Bill McDonough
President and CEO