Key Quotes from 1974 Shareholder Letter

1. "The costs of the product we deliver (auto repair, medical payments, compensation benefits, etc.) are increasing at a rate we estimate to be in the area of 1% per month... However, rates virtually have been unchanged in the property and casualty field for the last few years."

2. "Our efforts to expand Home and Automobile Insurance Company into Florida proved disastrous. The underwriting loss from operations in that market will come to over $2 million."

3. "Many insurance organizations, major as well as minor, have been guilty of significant underreserving of losses, which inevitably produces faulty information as to the true cost of the product being sold."

4. "We consider the insurance business to be inherently attractive. Our overall return on capital employed in this area — even including the poor results of 1974 — remains high."

5. "Many of our competitors are in a substantially weakened financial position, and our strong capital picture leaves us prepared to grow significantly when conditions become right."

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Source: Full Letter