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Celebrating 40 Years of Lawyers Mutual: 2016 Year in Review

Lawyers Mutual was founded 40 years ago with a mission, lawyers helping lawyers. Our motto continues to be “here today, here tomorrow” as we serve the lawyers of North Carolina.

As the practice of law is changing, we are responding — collaborating with innovators in the profession to provide our insureds with valuable tools. We continue to ask, what will the practice of law look like in 5, 10, or 20 years?

To commemorate our 40th anniversary, we put together a special interactive 2016 Annual Report website with interviews from current and former Board members, staff, and members of the legal community. You can view the interactive 2016 Annual Report here.

Here are some highlights from the report:

President’s Message

In the late 1970s, the lawyers’ professional liability insurance market was in turmoil. In January 1977, the North Carolina Bar Association’s Insurance Committee met with the Insurance Commissioner to discuss the feasibility of forming a mutual insurance company. Once the need arose, the response was swift.

Our founders, all members of the North Carolina Bar, had the vision to create a mutual insurance company. As a mutual insurance company, our sole obligation is to our policyholders. It is our founder’s vision that helps ensure we will be here for generations to come.

Back in 1977, over 1,400 lawyers contributed capital. Those lawyers trusted our founders and our mission. If not for that trust, we would not be here today.

Thank you for trusting us to do the right thing for you for the last 40 years and giving us the opportunity to earn your trust each day. We look forward to celebrating many more anniversaries and to a bright and bold future.

Claims Report

Forty years ago, one of our insureds called to report Lawyers Mutual’s very first claim. I suspect that first claim was set up on either a manual or an electric typewriter and might have involved carbon paper.

Today, we live in a different world. We now get calls and e-mails from our insureds who tell us that their computer systems were hacked and they were tricked into sending real estate closing funds to cyber criminals. These technology and cyber fraud claims are what keep us up at night today.

While many of the claims we see today are the same as the ones we saw forty years ago, others could not even have been imagined back then. But our approach to handling these claims has never changed. Our first priority has always been to see whether there is a way to fix a problem when a mistake is reported.

No other company has provided forty years of uninterrupted service to North Carolina attorneys. And no other company offers the level of proactive risk management assistance that Lawyers Mutual is able to provide in a rapidly changing practice environment.

Client Services Report

The passion we feel for our insureds is contagious, whether it’s the work we do in underwriting their firms, educating them about current risks, working with them on claims, writing dividend checks or providing health insurance benefits, everyone is dedicated to providing excellent customer service.

We look for new ways to bring value. Visit our website at www.lawyersmutualnc.com for infographics and more than 50 practice guides containing form letters, checklists and best practices.

We care about the Lasting Legacy of Lawyers Mutual and we are proud to be a part of the Bold Future of the Company.

We invite you to join in the discussion. Join us at one of our community programs or #LastingLegacyBoldFuture.

Underwriting Report

Think “Lawyers Mutual,” and you think history. You think service. We are stronger than ever after 40 years because we excel at one thing: insuring North Carolina law firms and providing exceptional service to our policyholders.

As is often said, there is nothing permanent except change. Lawyers are looking at new models for the provision of legal services, new arrangements, and new relationships with non-traditional legal providers locally and nationally.

We use historical data and trends to assess future losses, but Lawyers Mutual is also looking at these changes in the legal profession and facing new challenges in underwriting these new risks. We often engage in one on one, private conversations with our policyholders about potential ethics issues, coverage, and risk management associated with these new arrangements.

The future is uncertain, and we are facing many changes in the profession, but what will never change is our focus on our relationship with, and commitment to, our policyholders.

Finance Report

Each year management sifts through hard data such as real estate metrics, unemployment rates and inflation figures as well as soft data such as consumer and business owners confidence. The goal is to determine how best to provide Lawyers Mutual’s insureds with insurance coverage to protect their practice.

Company management and directors have been sifting the data described above for forty years since its inception in 1977. In 1977, The FED’s discount rate was 5.75% and quality corporate bonds were yielding 8%. The current FED discount rate is 1.5% and quality corporate bonds are now yielding below 3%. Through the various changes in business cycles that have occurred during the last four decades, Lawyers Mutual has weathered the challenges and become stronger with time.

Fiscal conservatism remains a basic tenet of the Company’s management philosophy and positive results over the years have served to build the Company’s safety net (Surplus) as well as to provide the ability to issue substantial policyholder dividends.

With positive underwriting results combined with other increases in surplus, the Company declared a 5.7% policyholder dividend for 2016. The dividend for 2016 is payable upon the expiration of year-end in-force claims-made policies.

Lawyers Insurance Report

At Lawyers Insurance, we pride ourselves on service to the customer and bringing to the table unique and innovative solutions to the needs of North Carolina law firms.

In 2016, the NC Bar Association Health Benefit Trust entered its 15th year of operation. Under the guidance of Lawyers Insurance, the Health Benefit Trust has been an invaluable benefit to over 1,000 law firms.

Lawyers Insurance continues to hone its expertise in the coverage of cyber liability and crime exposures. These areas intersect with constantly evolving schemes to steal funds and personal client data. Law firm managers must know what policies cover what risk in order to safeguard the firm.

From employee benefits, to disability and life, to business and property coverage, we only have one set of customers, and that is the lawyers of North Carolina. We are committed to understanding your needs and providing you the highest level of service.

You can download the PDF of the full report here.

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