2024 OMIA Annual Report : simplebooklet.com

2024 ONTARIO MUTUAL INSURANCE ASSOCIATION ANNUAL REPORT6OMIA Chair, Neil Shay welcomed delegates to OMIA’s 142nd Annual General Meeting and Convention. There was an excellent turnout with over 640 attendees.Convention Keynote, Clara Hughes provided a stirring address covering not only her success in Olympic competition but also the challenges she met and overcame with the help of others. Clara’s theme in life, as shared with attendees, is, “Nothing is done alone.”Neil’s theme for the year was, “Always Building.”During Neil’s year, there were many opportunities to reect on mutual “building” projects, past, present, and future. Throughout the year and at Convention, Neil cited historic mutual success stories where collaboration and goodwill created mutual advancement at the local, provincial, and national level. Neil also highlighted ongoing projects where mutuals are working together to adapt to emerging trends in technology, society, and nancial services. In summing up the essence of mutuality, Neil referred to a denition rst noted by 2009 Chair, Tim Shauf:“As mutual insurers, whose ultimate purpose is to act for the collective benet of our member policyholders, we always have the freedom to do the right thing.”Neil also thanked outgoing Group C Director, Terry Knight for his service and contribution to the OMIA Board. John Taylor provided a report on OMIA’s 2023 activities and the important work that mutuals do in promoting a unique form of cooperative organization. He also reviewed the 2023 mutual results and reported on a range of activities including the 2024 Queens Park Day, the Mutual Emerging Leaders group, work on adapting to new nancial reporting requirements for insurers, and a record year for OMIA’s educational programs.OMIA Treasurer, Sharon Dittmer provided a report to delegates including the nancial statements.The following motions were brought forward:1. APPROVAL OF THE MINUTES OF THE 2023 OMIA ANNUAL GENERAL MEETINGTHAT, the Minutes of the Annual General Meeting of the Ontario Mutual Insurance Association as held March 23, 2023, be approved.Moved by: Frank Barretto (Dufferin)Seconded by: Warren Burger (Erie)Carried2. APPROVAL OF THE 2023 FINANCIAL STATEMENT & AUDITORS REPORT THAT, the Financial Report and Auditors Report for the Ontario Mutual Insurance Association for the year ended December 31, 2023, be adopted as presented.Moved by: Bill Rhodes (Kent & Essex)Seconded by: Steve Graham (Halwell Dumfries)Carried3. APPOINTMENT OF AUDITORSTHAT, Clarke, Starke and Diegel be appointed auditors for the Ontario Mutual Insurance Association for the year 2024.Moved by: Eric Harrop (Nova)Seconded by: Randy Gilliard (Lambton)Carried2024 ANNUAL CONVENTIONMarch 20th to 22nd, Sheraton Hotel, TorontoChair, Neil Shay 2023/2024

Page 7

Page 8

2024 ONTARIO MUTUAL INSURANCE ASSOCIATION ANNUAL REPORT82024 PRESIDENTS & MANAGERS MEETINGOctober 27th to 29th, Ottawa, OntarioThe 2024 Presidents and Managers meeting took place at the Fairmont Chateau Laurier in Ottawa from October 27th to 29th.Chair, Marg Torrance welcomed delegates back to Ottawa for the rst time since 2019.Marg remarked on our opportunity to honour the past as we met in the nation’s capital, to take advantage of the many present opportunities the next few days would provide, and to lean into the future with networking and education among peers.Opening keynote speaker, Sam Goodwin, spoke on his harrowing life experience as a prisoner in Syria and his strategies in winning through the uncertainty of an experience that we could only begin to imagine. The business session included reports from Chair, Marg Torrance and OMIA President, John Taylor. Marg talked about OMIA’s strategic pillars, and the tremendous response received through the member strategic survey over the summer. Marg also thanked her mutual colleagues for their support in raising money for Indwell, a charity dedicated to providing supportive housing that transforms lives. In his President’s Report, John Taylor spoke on themes including compliance and active regulation, adapting to new nancial reporting, leveraging data strategy, promoting mutuality, and planning for sustainability of the mutual system.Fire Mutuals Guarantee Fund (FMGF) Chair, Sharon Hollister convened the Guarantee Fund meeting. She spoke on the important work of the Financial Review Committee in monitoring mutual solvency. This has become more important than ever following the discontinuance of the Financial Examination Committee in the Spring of 2024.Financially, FMGF expenses declined in the previous 12 months to $264,000, about the same level as in 2022. Sharon Hollister conrmed that no individual company posed a solvency threat to the fund. Catherine MacLellan was recognized for her 30 years of service as Chair of the Financial Review Committee and provided with a retirement gift in appreciation. Andrew Cartmell was congratulated on moving into the Chair role on the committee.Andrew Cartmell gave the Financial Review Committee update and reported on nancials to the end of June 2024. He also reported on developments across the industry in reconciling IFRS-17 key metrics into nancial ratios that allow comparison to past performance. The nal session of the business meeting was an update from Tyler Kroetsch on the Ontario Mutual Automobile Plan, including developments in rates and protability, as well as the introduction of the telematics product, DriveMutual. Afternoon educational sessions included an update from EY on Climate Risk Disclosures on mutual nancials, a panel with Bennett Grant LLP that spoke to Director-Regulator Conversations, and a panel of Alec Harmer, Stephen Matusiak and Greg Martin on how Articial Intelligence and Generative Intelligence have been used within our mutual system in pilot projects.On Monday evening, attendees enjoyed a “dress as a decade” reception and hospitality event. There were many creative costumes and prizes were awarded. The evening included a fundraiser for Indwell. Tuesday’s program began with Farm Mutual Re’s Information Session which included insights from Chair, Kevin Konecny, CEO, JP Gagnon, CFO, Amy Butler, Chief Claims Ofcer, Lisa Fazzari and AVP Actuarial, Janeth Fernandez. Key topics included Chair, Marg Torrance2024/2025

Page 9

Page 10

Page 11

2024 ONTARIO MUTUAL INSURANCE ASSOCIATION ANNUAL REPORT11Here is the award citation as presented at the 2024 Annual Convention. Our 2024 Presidential Merit Award recipient is Jeff Consitt. Jeff has since retired, but was the Senior Vice President and Chief Operations Ofcer for Farm Mutual Re and led the IT, Innovation, Data and Insights, Project and Change Management, and the Business Operations groups, in addition to quarterbacking the strategic planning process. Jeff’s long road to his leadership role dates well back into the now shadowy days of the 1980’s. In 1988, after a 6-month contract stint at Ayr Farmers Mutual, Jeff joined what was then known as the Farm Mutual Reinsurance Plan in 1988 as a Junior Claims Examiner. Under the formidable leadership of Bob Brenner, Jeff advanced through the ranks and was promoted to Assistant Claims Manager in 2000 and to Claims Manager in 2006. Given the unique relationship between Farm Mutual Re and member companies, claims functions at Farm Mutual Re have always played an outsized role in the life of a mutual, with extensive involvement and problem solving on large or unusual claims. Jeff built many friendships and much admiration through his long and diligent work in claims, including stops along the way at each new Farm Mutual Re ofce, whether it be Eagle Street, Bishop Street, or the current mutual world headquarters at Pinebush Road. Over the years, Jeff moved into broader and more senior roles. The most signicant were the moves to Vice President of Operations in 2010 and to Senior Vice President and Chief Operating Ofcer in 2015. In these roles, Jeff directed the mutuals’ approach to system-wide strategic planning. From 2016 to 2020, Jeff led the team that organized the COMPASS Planning Sessions, bringing mutuals from across the country together to tackle emerging strategic threats and opportunities. At the same time, Jeff joined the board of the Canadian Association of Mutual Insurance Companies (CAMIC) providing energy and sound guidance as CAMIC recruited and hired a new CEO. Jeff served as CAMIC Chair from 2020 to 2022, during the most challenging days of the pandemic.Through the years, Jeff was also a contributor and panelist at numerous events and meetings, including Presidents & Managers Meetings, Annual General Meetings, and OMIA educational events. Leading by example, Jeff completed his Masters of Business Administration from the Ivey School of Business in 2015, and at Farm Mutual Re, he fostered an environment of life-long learning, mentorship, and opportunity for a generation of emerging mutual leaders. Jeff has been a leading proponent of mutuality, alignment between mutual organizations, and solving problems with a practical yet ambitious desire to innovate and create mutual sustainability.PRESIDENTIAL MERIT AWARDEach year the Presidential Merit Award is presented to an individual who exemplies the best elements of the mutual system. Winners of this award have demonstrated a long-term commitment to mutuality, service to the Association, and accomplished leadership. Presidential Merit Award winners are generous contributors to their fellow mutuals and have a favourable inuence on other members of the Association.

Page 12

2024 ONTARIO MUTUAL INSURANCE ASSOCIATION ANNUAL REPORT12Here is the award citation as presented at the 2024 Annual Convention. North Blenheim Mutual was founded 162 years ago on August 15th, 1861, in the then thriving hamlet of Chestereld, Ontario located in Oxford County. In 1861, Board meetings were few and far between and Annual Meetings were held above a blacksmith’s shop. Chestereld is only known today as one of Ontario’s ghost towns. North Blenheim Mutual, however, long ago moved a few miles south on Oxford County Road 22 to Bright, Ontario where it continues to be a hub of that thriving community. North Blenheim Mutual has made many contributions to their community but has also made many contributions to our Ontario Mutuals. North Blenheim Director, Len Seegmiller was OMIA Chair in 1995; Terry Knight, OMIA’s Group C Director, served as OMIA Chair in 2020 and 2021, moving into that position in the early days of the pandemic. Terry’s leadership and resilience as Chair was a shining example to the OMIA board, staff, and membership as the Association helped mutuals work together through the toughest days of COVID-19. Terry was a Director and Chair of SEH Computer Systems and has chaired multiple OMIA committees. He currently sits as a Director on the Collectivde board. Terry was also one of the pioneering OMIA CAT team adjusters who worked in Eastern Ontario for months after the ice storms of 1998. North Blenheim Mutual has many strong mutual contributors. • Shelley Deyo is the Chair of and SEH Computer Systems director and serves on the Auto Rate Filing Committee.• Teresa Martin served on the OMIA Benets Committee and is currently a Farm Mutual Re Director.• Caitlyn Wyatt is on CAMIC’s Youth Committee and the newly formed Mutual Emerging Leaders Committee.• Gavin Stewart was involved with Tri Mutual Financial, the Ontario Mutual preferred contractor program, and the National Association of Mutual Insurance Company’s Claims Committee.• Jeff Dahmer is a key contributor to OMIA’s Towing and Storage Sub-Committee and is Chair of OMIA’s Claims Managers Roundtable.• Retired North Blenheim Director, Don Pruss and current Director, Denise Tew are Legislative Affairs delegates who have worked tirelessly maintaining contact with MPPs and MPs on mutual issues.• Former North Blenheim Director, Len Seegmiller, and Bruce Davis, North Blenheim’s former long-time Manager are past recipients of the Distinguished Service Award.It is through the efforts and generosity of mutuals such as North Blenheim that the mutuals can continue to grow and thrive in a competitive insurance environment.OUTSTANDING CONTRIBUTOR AWARDThe Outstanding Contributor Award is presented each year to a member company that has demonstrated leadership in supporting the mutual system. We were pleased to present the award to North Blenheim Mutual Insurance Company.North Blenheim Mutual CEO, Terry Knight & Board Chair, Terry Ross

Page 13

2024 ONTARIO MUTUAL INSURANCE ASSOCIATION ANNUAL REPORT13Here is the award citation as presented at the 2024 Annual Convention.Ross Lincoln came to insurance through the unlikely route of forestry management. In 1986, after six years “in the woods”, perhaps having decided he had seen enough of both the forest and the trees, Ross began his insurance career working with the Cooperators in Ottawa and Guelph.Ross joined Grenville Mutual in Spencerville as an underwriter in 1992 and was appointed as General Manager in the year 2000. This was a period of change and growth, both at Grenville and in the mutual system. Ross stepped forward to become involved with other collaborative mutual enterprises including serving as an inaugural director of Farm Mutual Financial Services, and as Chair from 2000 to 2003. Ross joined the Board of Directors of Farm Mutual Re in 2008 and was instrumental to the organization’s governance during his tenure. Many will remember that 2008 and 2009 brought a global nancial crisis to our doorstep. For those on the Board, the lessons learned in the nancial crisis forged the path ahead to modernizing governance and risk oversight. While on the Farm Mutual Re board, Ross served on the Audit, Market Conduct, Governance, and Financial Review committees. He also served on the Farm Mutual Foundation Committee that reads and approves hundreds of student scholarship essays every year. As a rm supporter of continuing education and leadership development, Ross served on the National Association of Mutual Insurance Companies (NAMIC) Management Conference Organizing Committee for four years. Ross was the rst Canadian Chair of the NAMIC Management Conference when it was held at the Ocean Reef Resort in Florida in 2011.Ross’s career has been exemplied by energetic participation. As a mutual leader, Ross was a champion of mutual insurance and supported and developed the team at Grenville Mutual with a deep commitment to improving and creating mutual business models for today’s policyholders. At Grenville Mutual, Ross fostered an environment where board members and staff were empowered to participate in mutual events and committees and to contribute to numerous association projects and initiatives. Ross was also generous in making the Grenville network available to help the Ontario Mutuals keep a strong presence with Eastern Ontario organizations such as the Ottawa Valley Farm Show, the International Plowing Match, and 4-H Ontario. Ross was nominated by Grenville Mutual.DISTINGUISHED SERVICE AWARDThe Distinguished Service Award is presented to individuals who have retired from the mutuals after long and noteworthy careers. Created in 1987, this award recognizes that the mutuals’ legacy of resilience and dedication to mutuality was built through the efforts of remarkable individuals who had devoted their career to serving policyholders and their mutual colleagues.

Page 14

Page 15

Page 16

2024 ONTARIO MUTUAL INSURANCE ASSOCIATION ANNUAL REPORT16To assist member companies in meeting requirements for audit and nancial reporting.ACCOUNTING ADVISORY COMMITTEE REPORTChair, Jim DeJeu, Lambton Mutual2024 Committee Members Andrea Schaefer (Axiom), Christine Van Daele (Westminster), Dave Paterson (Ayr),Lindsay Zehr (South Easthope), Andrew Cartmell (FRC), Amy Butler (Farm Mutual Re),Garry Brenneman (Farm Mutual Re), Sharon Dittmer (OMIA), Jeff Ferguson (OMIA)Committee Focus The Accounting Advisory Committee monitors the accounting and nancial reporting environment and develops solutions and approaches for member companies to address new and changing requirements. The areas covered include International Financial Reporting Standards (IFRS), statutory nancial reporting forms required by the regulators, requirements of the General Insurance Statistical Agency (GISA), taxation (both federal and provincial) – essentially any topic where the information required must be delivered to, or extracted from, the member company accounting and nancial systems. The committee is a liaison with the Financial Review Committee, the Accountants’ Roundtable, and key partners and nancial reporting experts. The Roundtable is composed of member company staff and management who are responsible for nancial reporting and compliance.The committee also works closely with the Financial Review Committee in reviewing changes to solvency rules such as revised MCT calculations. This collaborative approach helps ensure that the implications of changes are understood and implemented consistently.In 2023 and into 2024 the committee focus continued to be on implementation and assessing the impact of IFRS-17. IFRS-17 – “Going Live” The development of IFRS-17 was a long, challenging, and often frustrating experience for Canadian insurance accounting professionals, as regulatory and standards’ bodies wrestled with creating the coherent and timely guidance required for implementation. This multi-year transition resulted in nance and accounting departments exerting maximum effort, not only in 2023 after the changes became live, but into 2024 as the impact and workows continued to evolve. While 2023 year-end was challenging for many companies, the committee continued to assist companies in navigating their way through their rst IFRS-17 year-end; this was the rst year-end for all parties involved, and the Accounting

Page 17

2024 ONTARIO MUTUAL INSURANCE ASSOCIATION ANNUAL REPORT17Advisory Committee was glad to play a productive role in assisting with companies seeing it through. While IFRS-17 created an intense conversion process for nance professionals, it also required focus by other areas of management, boards, and industry stakeholders and partners. Conversely, IFRS-17 has not resulted in any net benet for policyholders or consumers of insurance products. In 2024, the Accounting Advisory Committee continued to champion and lead an immersive and collaborative approach for mutuals, recognizing that the resources required for conversion were beyond the scope of individual companies. The Accounting Advisory Committee conducted a year-end survey to look for efciencies in the process moving forward. There is still much work to be done, and the committee continues to work with the group actuaries to streamline the path to providing more timely and clearer reports. The committee is working to improve the quality of data submitted to further improve the accuracy of the reports.Work also continues with the FRC to provide clarity on the P&C1 schedules. The committee is also working with the FRC and OMIA to better understand the new IFRS-17 metrics and the value they provide to our organizations. Using the Accountants Roundtable, special workshop sessions, and targeted research through OMIA, the Accounting Advisory Committee created access to expertise and capacity that provided economies of scale and consistency. While IFRS-17 was an “unwanted” gift from international standards bodies, and challenging in the extreme, we should not lose sight of the fact that mutuals successfully and professionally navigated this transition. This is an accomplishment we should all be immensely proud of.The committee will continue to provide this “open source” approach to problem solving as nancial reporting and analysis continues to evolve. Climate Risk DisclosureDuring 2024, the committee turned its attention to how best to tackle the issue of “climate risk disclosure” in mutual nancial reporting.This will be one of the earliest specic areas to take on as it relates to a larger Environmental, Social, and Governance (ESG) strategy. The Ofce of the Superintendent of Financial Institutions (OSFI) has published guidance, but whether that guidance will change or will extend to provincially regulated insurers is an open question. The committee felt it was important to begin the process sooner rather than later. Even though FSRA does not require companies to implement OSFI B-15 at this time, it is anticipated that international sustainability requirements may force the issue in the coming years. In addition, International Standards bodies have published guidance which, while similar, is not fully consistent. The rst phase of readiness research has been completed in partnership with EY. A readiness report has been completed based on four test mutuals. The results have been presented to the committee to determine mutual companies’ readiness and develop a high-level roadmap for Climate Risk Disclosure. Those results and road map were presented at the P&M meeting in Ottawa and at the Accountants Roundtable in October 2024. The baseline research will be used to consider reporting models that make sense in the mutual context. The committee will also continue to provide input and insight to OMIA in its ongoing work in sharing with our provincial regulator the problematic elements of areas of these reporting standards. We believe a well researched and pragmatic approach is important in developing a standard that makes sense for small insurers and their policyholders. Looking AheadThe Accounting Advisory Committee anticipates continued change driven by international regulatory pressures and will continue to create solutions and scale on a group basis that benet member mutuals.

Page 18

Page 19

Page 20

2024 ONTARIO MUTUAL INSURANCE ASSOCIATION ANNUAL REPORT20To develop OMIA’s position on auto insurance issues and communicate that position to the appropriate legislative and regulatory authorities.AUTOMOBILE COMMITTEE REPORTChair, Kevin Inglis, Howick Mutual2024 Committee Members Kelly Jackson (Westminster), Linda Pereira (Lambton), Rocco Neglia (HD), Lisa Fazzari (Farm Mutual Re), Jon Hodson (Farm Mutual Re), Tyler Kroetsch (OMAP),John Taylor (OMIA), Susan Baker (OMIA) Background The Automobile Insurance Committee provides formal input to government consultations on potential changes to Ontario’s automobile insurance product. In reforms dating back over 30 years, Ontario’s automobile insurance product has been affected, often radically, by changes to either statute or regulation. Each of these changes has required detailed study and comment from the insurance industry, including OMIA.The reforms of the 1990s focused on enriching the Statutory Accident Benet Schedule (SABS) and creating more stringent claims handling regulations, while at the same time creating a “no-fault” regime that placed limits on the right to sue for damages in tort. The result was the creation of Canada’s most generous auto insurance product combined with stringent rules governing pricing, selection, policy terms, claims processes. This combination of factors led to a complex environment for both insurers and policyholders and more involvement by legal counsel on behalf of policyholders and an adversarial environment for auto claims. More recently, the pandemic period from 2020 to late 2022 created a downward trend in driving patterns, accident rates, and claims volume. This removed upward pressure on rates but nonetheless, the cost of auto insurance remained a signicant expense for Ontario households and drivers, and affordability of auto insurance remained a public and political ashpoint.By late 2022, new threats to insurance affordability emerged including rampant ination on the cost of vehicle repairs and replacement, the advent of high cost automotive “smart” technology, and a booming trend in high-end vehicle theft and claims costs. By late 2023, auto theft had become such a top-of-mind consumer issue that both the federal and provincial governments began prioritizing a policy response. These developments have kept the pressure on the government to continue to look for ways to “x” Ontario Auto. These efforts have been less of a system-wide approach to reform than a narrow “issue by issue” approach. The report that follows summarizes the committee’s analysis and input to these issues in 2024.

Page 21

2024 ONTARIO MUTUAL INSURANCE ASSOCIATION ANNUAL REPORT21Territorial Rating In Ontario, insurers are allowed to charge differential rates based on “territories.” They can only use a limited number of territories and must dene these in rate lings made with FSRA. The use of territories has generally been considered an appropriate and fair way to identify and charge for the higher risks associated with driving in areas where accident frequency and severity is higher. Over the last several years there has been a loud debate led by MPPs representing the higher cost Toronto and GTA areas for auto insurance. The government has repeatedly indicated they wish to address territories but have not been specic as to whether this will involve banning the use of territories or whether it will allow an expanded and exible use of territories that might better represent risk allocation. OMIA has strongly advocated for the continued use of territories as banning them will result in drivers in rural, lower trafc areas subsidizing drivers in higher risk urban areas. By the end of 2023, FSRA announced they would accept applications from insurers who wished to propose and use a “modernized” approach to territory rating in the GTA. If an application is accepted as reasonable, an insurer could operate in a “Test and Learn Environment” for a period of two years. This may be a very good rst step in addressing the question of territory, but the stringent requirements for an insurer to operate within such an environment should not be underestimated. The future of territorial remains unknown, but FSRA’s publication in September 2024 of Proposed Guidance on Automobile Insurance Rating and Underwriting Supervision seems to indicate a move away from narrow discussions on rating variables, such as territories, to a principles-based approach covering a broad spectrum of supervisory activities. As mutuals look to remain competitive in the auto product and with the advent of principles-based auto regulation, the Ontario Mutual Automobile Plan (OMAP) has introduced telematics under the “DriveMutual” brand in 2024. Towing and Storage – Fraud and AbuseExorbitant towing and storage fees following an accident have long been a concern to both vehicle owners and insurers. This has only escalated in recent years with highly publicized incidents of coercion and illegal activity in the towing sector. In 2022, the Ministry of Transportation introduced a series of pilot measures in Toronto and the GTA to address concerns over fraud when towing and storage services are forced upon drivers at accident scenes. The Towing and Storage Safety and Enforcement Act was passed in 2023, replacing the existing municipal oversight framework with a provincial framework requiring towing and storage operators to have a provincial certicate. The insurance industry, including OMIA members, played a critical role in highlighting the issue and moving the government to action. While the overall intention is to create a safer and less costly environment for drivers, there is much work still ahead in enforcement and cleaning up towing and storage. OMIA created a Towing and Storage Working Group, including mutual claims professionals who have monitored and reported on local developments. This group has been instrumental in helping form our submissions and plan effectively to reduce fraud. This group held a one-day forum in September for members on coping with towing and storage issues under the new Act. Optional Coverage for Direct Compensation Property DamageDirect Compensation Property Damage (DCPD) became an optional coverage on January 1, 2024. In announcing this change, the government cited an objective to allow consumers more choice and give them the chance to reduce the overall cost of their insurance.OMIA’s position is that allowing optionality would not save signicant costs for drivers and would result in consumers who may most need the coverage deleting it without understanding the implications. To date this change does not appear to have made a material difference in the cost of automobile insurance and most policyholders have kept the coverage in place.

Page 22

2024 ONTARIO MUTUAL INSURANCE ASSOCIATION ANNUAL REPORT22Proposed Changes to the Statutory Accident Benet ScheduleIn the spring 2024 Ontario Budget the government announced an intention to change two elements of the Statutory Accident benets Schedule (SABS). (SABS is the part of the auto policy that pays rst party claims for income replacement and expenses arising from auto accident injuries on a no-fault basis. The policyholder claims these from their “own” auto policy.) The rst proposed change involved making SABS benets outside of medical, rehabilitation, and attendant care optional benets. The second change was to make the auto policy the rst “payor” ahead of any other benets available through private coverage or a work-place plan. OMIA had signicant concerns with the implementation of these changes and that the benets to consumers are overestimated. In September, detailed submission letters were provided to the Ministry of Finance on these points. Optionality of SABS benets will become effective July 1, 2026. The effective date was pushed due to the industry meticulously setting out the programming and administrative work that will be required to ensure that consumers are getting an accurate quote and thorough advice. The details on how auto insurers are to become “rst payors” remain to be provided by the Ministry. As these changes move ahead there will be signicant time and cost involved in making policy system changes, quoting and rating systems changes, training agents and brokers, and developing information for consumers on how to make an informed choice. Fair Treatment of Consumers – Market Conduct Examination for Automobile Insurance In 2022, FSRA launched insurer examinations on automobile insurance market conduct. This involved requesting comprehensive documentation from selected insurers with an assessment of the adequacy of each insurer’s policies, procedures, and controls as related to ensuring that all aspects of automobile insurance, from application through to termination, were fairly handled. An Ontario mutual was selected as one of the companies to be assessed. While complying with the examination was time consuming and resource heavy, the results were generally positive and through the generosity of the mutual in sharing lessons learned, fellow OMIA members have had an opportunity to identify opportunities for improved practices, processes, and documentation. To maintain a clear line of sight with FSRA, OMIA hosted FSRA speakers as guests at our November Compliance Roundtable.It was expected that FSRA would undertake further examinations in 2024, but it appears the target is now to complete two from across the industry in Q1 2025. Fraud Reporting Service – FSRA Proposed Guidance On July 15, FSRA published Proposed Guidance on a mandatory requirement for auto insurers to

Page 23

2024 ONTARIO MUTUAL INSURANCE ASSOCIATION ANNUAL REPORT23report fraud events involving automobile insurance to a Fraud Reporting Service to be developed and operated by FSRA. Automobile insurance fraud has been highlighted as a key cost element in the cost of auto insurance for many years and the industry has requested greater enforcement and public service focus. While a more complete database of fraud events may have long term benets in combatting fraud, there remain many questions as to the cost/benet of a fraud reporting service that puts the cost directly on auto insurers as the victims of fraud, without a corresponding investment in enforcement or deterrence. OMIA has drafted a response to FSRA’s consultation pointing out our concerns on the effectiveness of this measure. Small MattersThroughout the course of the year there are many smaller matters that arise. In 2024, the Ministry of Finance proposed some minor changes to the Insurance Act to modernize the denition of the “Minor Accident Reporting Threshold” and for the use of electronic communication between insurers and insured persons. The Auto Committee supported these changes, and although they are minor in scope, they do serve to improve the experience for drivers in Ontario. Although not “small”, FSRA also published three consultations on reviews of the Statutory Accident Benet Guideline, the Health Service Provider Framework, and the Health Claims for Auto Insurance (HCAI) System. The committee attended FSRA information sessions and provided detailed feedback on each of these reviews, particularly those with an expected cost impact to policyholders. Right to Repair The issue of “right to repair” arises when a manufacturer of a product has sufcient proprietary technology to restrict who can provide repairs to a damaged product. With the advent of smart automotive technology, this has become a key cost driver and has the potential to create “monopoly” collision repair situations. The Auto Committee has discussed the impact of “right to repair” and supports federal MPs legislating a fair approach to the right of vehicle owners to have a choice in how and where a damaged vehicle is repaired.Looking Ahead Ontario’s automobile insurance market remains difcult to navigate due to uncertainty on costs and a complex regulatory and legal environment. Many of the changes noted in this report are incremental in nature and fall short of substantial reform. The Auto Committee will continue to research issues as they arise and provide a mutual perspective to regulators and legislators on proposals for Ontario Auto.

Page 24

Page 25

2024 ONTARIO MUTUAL INSURANCE ASSOCIATION ANNUAL REPORT25phase of the study looked at the design of the Plan based on how contributions funded the plan and how pensions were “earned” by beneciaries. As a result of the second phase of the study, changes to the OMIA Dened Benet (DB) Pension Plan were made effective January 1, 2022. In the nal stages of the study, asset allocation is being changed, and asset cases such as long-term bonds, infrastructure, and private debt are being introduced to best match the assets in the Plan against anticipated liabilities of the Plan.Pension Plan TextThe Plan Text was restated January 1, 2021, incorporating all prior amendments to the previous plan text. In addition, claried terms and references were added to the text to ensure compliance with Canada Revenue Agency interpretations on payment of pension benets.Annual Plan Review – Dened Benet Pension PlanThis review is completed by OMIA, as Plan Administrator, and TELUS (previously LifeWorks), as Plan Actuary. The annual plan review ensures that the OMIA Plan is compliant with Ontario pension statutes and regulations. It also provides a formal review of governance practices to measure the Plan’s policies and processes against best practices in the pension eld. Member companies were provided with written conrmation of the OMIA Plan’s compliance in September 2024. Stewardship Review – Dened Contribution Pension PlanOMIA, as Plan Administrator, and Canada Life, as Plan Manager, review the Dened Contribution (DC) Plan annually for stewardship and compliance. This report provides feedback to OMIA on the design of the Plan and the services available to employees in the Dened Contribution Plan, as compared to pension industry trends and best practices. The November 2024 review conrmed OMIA’s DC Plan design and processes met best practices. The next review will take place in the fall of 2025. Total employee pension assets in the DC Plan were $87,111,916 as at December 31, 2024.Pension ValuationIn 2024, the OMIA Board of Directors elected to le an “early” valuation due to the signicant improvement to the funded position of the Plan based on guidance from the actuaries, the interest rate environment, the Plan membership information as of December 31, 2023, and various other actuarial assumptions and legislative changes with respect to the funding of pension plans. Results of that valuation revealed a surplus on a solvency basis; therefore, no special payments were required. The December 31, 2023 valuation also indicated a required decrease to the employer normal cost, effective January 1, 2024, to 3.57%, bringing the total employer contribution rate to 12.57% (9.0% + 3.57%) down from 13.82% (9.0% + 4.82%). The next mandated valuation must be led in 2027 based on the period ending December 31, 2026. Transfer Status of Dened Benet Pension PlanAt the onset of the COVID-19 pandemic in 2020, nancial markets suffered a decline in equity values. As Dened Benet pension plans have signicant exposure to equity markets, the decrease in underlying asset values drastically reduced the funded status of pension plans. In response, the Financial Services Regulatory Authority of Ontario (“FSRA”) introduced regulations that restricted the ability of any plan to transfer lump sum pension entitlements to terminating members. The OMIA Plan was subject to that restriction initially but is not currently affected. Our plan actuaries continue to monitor our transfer ratio quarterly.Rate of Return – Dened Benet Pension PlanThe 2024 annual return on assets as at December 31, 2024 was 9.78% (10 year average return of 5.99%). Assets Under Management currently total $241,242,864.Employee Benets Health and Dental CoverageThe OMIA Health and Dental Plan operates on an ASO (Administrative Services Only) model. In an ASO model, participating companies essentially self-insure and fund claims through direct premium assessment to member companies. Services to

Page 26

2024 ONTARIO MUTUAL INSURANCE ASSOCIATION ANNUAL REPORT26administer claims under the plan are purchased from a life and health insurer. This model provides the most cost-effective basis for the benet plan, while also ensuring claims are adjudicated at arm’s-length on a condential basis. The OMIA Benets Committee monitors the ASO claims experience history, changes in participation levels, and claims utilization data. The committee also provides input on benets issues that are brought forward by member companies and monitors the ASO target reserve. The target reserve is currently set at 20% of the previous year’s annual claims. Items and trends of interest this year have been:• Long Term Disability (LTD) premiums and claims continue to increase; 2024 saw an increase in new active LTD claims, a large increase in LTD claims reserves compared to 2023, and a large increase in LTD claim payments compared to 2023. The number of claimants decreased from 2023 to 2024; however the LTD claim amounts have increased, resulting in higher claims costs and higher reserves. Additionally, the actively managed claims have increased slightly and the long duration claims (claims beyond the 2-year own occupation clause) are slowly increasing as well. Top diagnoses for 2024 were cancer (40%), mental health (20%) and musculoskeletal (20%), followed by accident, neurological and other (7% each). • ASO: Large Amount Pooling (LAP) increased from $35,000 to $40,000. This is also referred to as stop loss coverage. It is designed to help protect the plan against signicant and negative nancial consequences of catastrophic or expensive health claims. For in-Canada claims, if the total claim amount for any one claim exceeds the limit of $40,000, Sun Life will reimburse the OMIA Plan for the excess amount. It is being increased at this time to reduce the stop loss premium rate and as a way to smooth out future rate increases to avoid a situation where a large LAP increase is needed in one year. • Health and Dental claims costs increased substantially in 2023 and the trend continued in 2024. In 2023, the ASO was in a decit position as claims exceeded premiums by approximately $450,000. The ASO reserve has been funding the additional claims costs in months where premium income has been insufcient to pay H&D claims. As of December 31, 2024, premiums are exceeding claims by approximately $146,000, however this does not include claims incurred prior to December 31, 2024 that have not yet been submitted to Sun Life. The OMIA Board approved a 7.5% increase to the H&D premiums effective January 1, 2025, to help fund the premium decit in 2023, cover estimated claims increases in 2025, and to build back the ASO reserve to 20% of the prior year’s claims costs.• Health and Wellness education continues to be a major focus through wellness newsletters and by providing information on lifestyle choices that promote long-term health.Lumino Health Virtual Care Members are reminded of the Lumino Health Virtual Care coverage. Lumino Health Virtual Care gives members and eligible dependents (including spouses) access to healthcare professionals via a mobile or web app. Members can speak with a nurse about health questions or consult a doctor via a secure video if a diagnosis or prescription is required, completely free of charge. Members can also consult other health professionals (e.g., Nutritionists) for an additional fee that may be covered by insurance. This service is available 24/7. Health Spending Account (HSA) Since January 2021, 19 companies have taken advantage of the option to enroll in a Health Spending Account (HSA) through Sun Life and the OMIA Benets Department. The overall experience for those that offer the HSA has been positive, with companies and members appreciating the ease of administration and claims submission. Companies have the option to enroll their staff in the HSA every January 1st; please contact the OMIA Benets Department for additional information.Member Education SessionsOMIA provides benets and pension education sessions to employees, agents, and directors.

Page 27

2024 ONTARIO MUTUAL INSURANCE ASSOCIATION ANNUAL REPORT27If your company is interested, OMIA staff are available to provide virtual or in person presentations on the OMIA Benets and Pension plans at no cost to your company. Companies wishing to schedule a presentation should contact the OMIA Benets Department. Company Benets Agents Errors and OmissionsThe Agents Errors and Omissions program renewed with a 3.5% increase in premium rates in 2024; this is the rst rate adjustment since the 2015-2016 renewal. Please refer to the E&O renewal mailout sent in August 2024 for complete details. Directors and Ofcers InsuranceThe Directors and Ofcers Insurance program continues to be well utilized with 39 companies participating in 2024. Cyber Liability InsuranceCyber Liability Insurance was introduced late in 2015. Currently, 36 companies have added this coverage. In 2019, a new Cyber ERM (Enterprise Risk Management) policy was introduced. The Cyber ERM policy is designed to address evolving regulatory, legal, and cyber security standards. In 2024, Kidnap Ransom Threat Enhancement and a Workplace Violence Expense Coverage Endorsement were added as optional coverages. OMIA will continue to share policies and templates on cyber protection and security measures as they are developed. Implementing and documenting these measures is a key factor in being eligible for the more comprehensive levels of coverage available through Chubb. We continue to see an increase in premiums due to the frequency and severity of cyber events in general.DocuSign Applications In 2023, the OMIA Benets Department introduced DocuSign applications for both Employee Benets and Pension. Links to these applications are available on the OMIA members’ website. Compensation & Benets Survey The bi-annual Compensation and Benets Survey was completed in 2023 with 45 companies participating. The survey will be offered again in 2025. HR Roundtable The Association provides members with the opportunity to participate in an HR Roundtable, held twice a year. The HR Roundtable provides education and discussions on HR trends and challenges. Over the last couple of years, topics covered at the HR Roundtable include managing LTD & STD claims, learning about generative AI, building a culture of safety as employees return to the workplace, psychological health and safety in the workplace, managing virtual teams, employer accommodation requirements during the COVID-19 pandemic, and navigating the hybrid work environment. OMIA Website Some key features of the OMIA members’ website include the ability to send a secure message directly to the OMIA Benets Department without going over the worldwide web, a library of application forms, HR document samples, HR manual samples, company administration manuals for Benets and Pension, HR Leadership Forum newsletters, prior mailouts, and links to various government and benet carrier websites.The company administration manuals for Benets and Pension are updated annually and can be found on omia.com under Member Resources > Information for HR Administrators.Looking Ahead The Benets Committee monitors and provides guidance on issues relating to programs that are currently offered. The three primary strategic priorities developed by the committee and incorporated in OMIA’s organizational strategic plan are:• Evaluating and enhancing plan user knowledge of the benets program;• Providing cost-effective, labour market competitive benet plans for member mutuals; and• Upgrading OMIA’s current benet software to improve efciency, adopt best practices, and meet data reporting requirements.

Page 28

Page 29

2024 ONTARIO MUTUAL INSURANCE ASSOCIATION ANNUAL REPORT29Vision – Better Data. Better Decisions. Knowledge Beyond Intuition.Mission – To facilitate data driven decision making.DATA STRATEGY COMMITTEE REPORTTo determine the courses that OMIA will provide and to deal with other issues related to training.EDUCATION COMMITTEE REPORTChair, Steve Quinn, Cayuga Mutual2024 Committee Members Jerrod Boyse (Ayr), Dan Hill (Germania), Bil Graham (Howick), Dave Rutherford (HTM),Elizabeth Baker (Farm Mutual Re), Christine Senior (OMIA)Training – Information Transfer OMIA’s Strategic Plan recognizes the work of the Education Committee as a key priority of our resource centre strategic goal. Our committee is attentive to our responsibility to move information out to member companies in an effective and timely manner. Knowledge is shared through the collaborative efforts of OMIA, OMAP and Farm Mutual Re teams, as well as staff from member companies and third-party subject matter experts. Topics cover the full gambit of insurance-related subjects, human resources issues, regulatory requirements and information technology support. We appreciate the generosity of member companies in supporting their staff as roundtable chairs and knowledge providers. 2024-2025 Education Program Please consult the online provisional education calendar on OMIA’s website for live online, in person and hybrid courses and roundtables. We have delivered several new courses throughout 2024 in the areas of cyber, sales, claims, loss prevention and emotional intelligence. New for 2025, members will have the opportunity to participate in IT, Actuary/Data Scientist and Data Quality roundtables to network, learn, and collaborate on common issues. Certicate Programs OMIA administers several certicate programs and has been working hard to refresh and offer current and relevant topics. The Directors certicate continues to be popular along with several discipline-based approaches and the Beyond Certication is being developed in tandem with the Mutual Governance Framework project. In addition to the existing Mutual Service, Agents, Underwriters, and Director’s certicate programs, in 2024 OMIA launched a new Claims certicate program. New for 2025, OMIA will introduce a Leadership Certicate in partnership with University of Waterloo and other vendors as well as the Loss Prevention Certicate. Please note some courses are still under development and based upon the topic they are offered in a variety of modalities, including live online, in person and hybrid.On-Demand Courses We continue to grow our portfolio of On Demand Courses with 24 currently available with more in development for release in 2025, plus nine Educational Resources that support products such as cyber, earthquake and OMIA wordings. Members are using On Demand courses to create onboarding programs for new staff and Directors. A full listing of courses is available on the On Demand website. Please contact elearning@omia.com for user access. Road Shows & Other In-House Training When there are impactful changes, such as Auto Reform, OMIA will deliver training at centralized locations to accommodate member needs. If a member has a specic request for in-house training on other topics, please email registrations@omia.com.Professional Development Coaching OMIA is offering coaching sessions for members who would like some assistance in formatting plans for training gap analysis, onboarding, and individual professional development. Email registrations@omia.com to set up a virtual session.

Page 30

2024 ONTARIO MUTUAL INSURANCE ASSOCIATION ANNUAL REPORT30Legislative Affairs at OMIA The Ontario Mutuals have a unique place in the insurance landscape in Ontario. This is demonstrated by our mutuals’ commitment to the economic health of rural Ontario, local community causes, and direct policyholder participation in their mutual. Our commitment and mutual value system are well recognized, as MPPs see mutuals as an important part of a healthy and sustainable insurance system. The Legislative Affairs delegate at your mutual has a vital role in maintaining our prole with MPPs and MPs. These delegates act as ambassadors to the legislature and communicate effectively on the impact of proposed legislation. In some cases, our delegates provide an informal sounding board for MPPs and provide feedback on how government policies relating to insurance will affect policyholders. This is especially important during difcult markets, or when the availability and affordability of insurance coverage becomes an issue. Legislative Affairs delegates also provide information back to OMIA and fellow mutuals on prominent issues in their ridings that will have an impact either locally or provincially. These early discussions on local issues can lead to broader discussions as issues migrate to other areas of the province. Local road safety concerns and trespass and activism on family farms are good examples of this type of issue. Delegates participate in two roundtables each year. The spring event takes place in early March with a visit to Queen’s Park. Roundtable topics focus on areas of developing interest. In addition to roundtables, individual delegates are also expected to be active in attending local political events within their communities. An effective Legislative Affairs delegate has a keen interest in the democratic process, a down to earth approach in communicating with MPPs, and a sincere interest in promoting mutual insurance.Queen’s Park Day Summary On March 5, 2024, OMIA returned to Queen’s Park for our annual visit. Meeting space at Queen’s Park To communicate the Association’s position on legislative issues to our elected representatives.LEGISLATIVE AFFAIRS COMMITTEE REPORTChair, Kevin Inglis, Howick Mutual2024 Committee Members Allan Hedley (Cayuga), Brad Vanstone (West Wawanosh), Doug Crockett (Westminster), Ross Lamont (Trillium), Scott Roung (HD Mutual), Dave Leyser (Tradition), Ed Forbes (Dufferin/Farm Mutual Re), John Taylor (OMIA)

Page 31

2024 ONTARIO MUTUAL INSURANCE ASSOCIATION ANNUAL REPORT31continues to be at a premium and we optimized our program to include a brief roundtable meeting, followed by a lunch hour/early afternoon reception for MPPs and staff. Forty-ve mutual delegates made the trip this year. Our Legislative host for the day was Guelph MPP Mike Schreiner, Leader of the Green Party.The luncheon reception had a good turnout of 36 MPPs and numerous staff from their ofces. The number of MPPs attending may have been higher as many do not pre-register and simply attend if their schedule permits. This year, 27 of our delegates were invited to a 30-minute meeting with the Premier in his ofce for a wide-ranging discussion. Recognizing that many newcomers to our mutuals are not familiar with our legislative affairs program, and the importance of staying connected with MPPs, we prepared “Why We Go To Queen’s Park”. This background document provides insight for boards and management teams on how their efforts at grassroots advocacy can keep our prole high as mutuals and support mutual values when lawmakers are considering changes to insurance law and regulation. Ministers’ Roundtable Not long after our Queen’s Park Day, OMIA was invited to attend a Queen’s Park Roundtable hosted by the Honourable Nina Tangri, the Associate Minister of Small Business. The Minister was looking to hear about both successes and challenges for small business so the Ministry can consider policy to support small business. Other organizations from the nancial, payments, and securities sector attended as well. Among the issues OMIA brought were regulatory fees, regulatory expectations on insurer assessments, and the strain on resources for small insurers to deal with regulatory changes, guidelines, and reporting requirements. We will look to continue these conversations. This was an interesting opportunity to share with the government the challenges Ontario’s small business sector faces with increased provincial, national, and international standards and regulation.We hope the Ministry does a follow up and that some policies may come forward in a future round of “red tape reduction” activities before the next provincial election. Ministry of Finance – Amendments to Ontario Auto Insurance The background on potential changes to Ontario Auto are reported in the Auto Insurance Committee Report. From a legislative affairs standpoint, the key success for this committee is that the Ministry of Finance continues to request OMIA and mutual input and provides condential briengs to ensure that mutual perspectives are considered as auto policy changes are developed. In most cases policy ideas are not reversed or drastically changed, but they are often improved or claried, and subsequent implementation measures are also improved. Uniquely, mutual legislative affairs delegates, many of whom are policyholder directors, speak with a level of creditability about the impact on both insurers and policyholders. Our Queen’s Park Day provides a chance for one-on-one discussions with MPPs, and these are further strengthened when our delegates visit constituency ofces and riding events to keep contact with MPPs. Provincial Issues OMIA’s core provincial issues remain:• Ontario Automobile Insurance• Ontario Building Code Review• Tort Reform• Small InsurersThese are longstanding issues and issues relating to automobile insurance and tort reform should be familiar to many MPPs as these have been public policy topics for many years. On automobile insurance, our key message continues to be that true cost containment or improved affordability for Ontario drivers can only take place with signicant product reform. This has been a consistent industry message. With cost pressure due to rising ination and accident frequency, this will continue to be a challenging topic for both insurers, regulators, and MPPs. Tort Reform is an extension of this same dynamic.

Page 32

2024 ONTARIO MUTUAL INSURANCE ASSOCIATION ANNUAL REPORT32As related to the Ontario Building Code, our message continues to be that the province must take a leadership role in putting climate resilience features within the Building Code. This remains a difcult “sell” as there are other stakeholders who resist even nominal changes to the Building Code that may be seen to increase building complexity or impact the cost of housing. In 2024, national climate related severe weather events with ood, hail, and wildre have heightened the urgency for government leadership. OMIA’s creation of a provincial issue relating to small insurers reects the pressure felt both nationally and provincially as regulators continue to make more demands on data, governance, and operational reporting. In addition, regulators are placing increased scrutiny on insurers governance and market conduct controls. The increased pressure on small insurers can be seen in many ways, such as regulatory cost assessment almost doubling between 2020 and 2021. To meet increasing demands for reporting, insurers must add signicant additional resources. Mutuals also report concerns with having to choose between focussing on policyholders and meeting regulatory expectations. While there is room for improvement and progress in any sector, our key message is that additional costs brought by regulation will be borne by the policyholder and must be justied with a resultant benet to policyholders. Fall Roundtable 27 delegates met on-line on December 9th for a year-end roundtable discussion. Our guest speaker was Matthew Rae, MPP Perth Wellington and Parliamentary Assistant to the Minister of Municipal Affairs and Housing. In 2024, MPP Rae introduced a Private Members Bill, the “Growing Agri-Tourism Act”. This Bill made amendments to the Liability Act to reduce unwarranted litigation against farms for claims arising when visitors are injured on farm even after signing a waiver and assuming risks. The need for this litigation arose as the cost of defending nuisance litigation for on-farm incidents created an availability and affordability crisis for farm liability insurance for agritourism risks. The delegates also shared updates from their ridings and reviewed OMIA’s key provincial issues. Looking AheadAs this is written, in January 2025, it appears certain that there will be a federal election this spring, with a very strong possibility of a provincial election just ahead of that. The committee will be updating our provincial issues, and if a provincial election is called, will launch an election project for roundtable delegates to contact candidates in their riding and build the prole of our mutuals with them. If an election is not called, we will head back to Queen’s Park on Monday March 3rd. Moving to a Monday date has come at the suggestion of one of our delegates as the legislature’s Monday routine provides MPPs more opportunities to meet with visitors.At the end of 2024, the committee said farewell to long-time members Doug Crockett and Brad Vanstone and thanked them for their long efforts over many years. The committee welcomed new members, Lloyd McGillivray (West Wawanosh) and Janet Nauta (Salus). We urge each mutual to continue to stay involved locally, getting to know your MPPs, and continuing to inform and educate on the vital role of mutuals in local economies. And for mutuals onboarding new board members, we encourage discussion at your board table on how your mutual can play your part in this important work.

Page 33

2024 ONTARIO MUTUAL INSURANCE ASSOCIATION ANNUAL REPORT33Ination, Pricing, and Insurance to Value Ination and its impact on insurance is a two-fold threat that dominates discussion in both underwriting and claims. The issue in claims became acute in 2022 and 2023 with inationary impacts on repairs. This could be attributed to a range of factors but was largely a case of a mismatch in a shortage of both materials and labour. This restriction in supply was accompanied by increased demand created by claims frequency arising from heavy CAT losses and increased post-pandemic economic activity. In simple terms, it was costing a lot more to repair damaged property and it was becoming very difcult to adequately reserve for longer tail repairs. This began to show up very quickly in nancial results. 2024 has offered some hopeful developments as central bank tightening and higher interest rates have slowed ination. Hopefully, this will stabilize restoration and repair costs, but it is still early days, and these cost pressures can be exacerbated quickly due to surge demand following catastrophe events. On the underwriting side, much work remains to be done on achieving adequate insurance to value. While there are digital tools and technologies that can assist in assessing value, it is still not an exact science and may take several renewal cycles to reach adequate insurance to value levels, while managing price shocks for policyholders. For the unique element of the mutual portfolio that is focused on agricultural risks, the increasing sophistication of technology and building design in farm operations also requires close attention to keeping values up to date.At the global reinsurance level, assurance on adequate ITV at the primary level is a differentiating factor in being able to acquire reinsurance at reasonable terms and pricing. To gather and analyze industry market information that affects Mutuals’ ability to sell their product and serve policyholders, to disseminate this information to the mutuals, and to connect with industry groups. MARKET ISSUES COMMITTEE REPORTChair, Marg Torrance, HD Mutual2024 Committee Members Ed Forbes (Dufferin), Rob Moorehead (MutualONE), Ken Worsley (Nova), JP Gagnon (Farm Mutual Re), Tia Milnes (Farm Mutual Re), Susan Baker (OMIA), John Taylor (OMIA), Lisa Hunter (OMIA)The Market Issues Committee identies and researches issues that affect how, where, and when insurance products are sold to policyholders.The committee’s discussions on issues are shared with the membership through the Market Watch bulletin. The committee also helps OMIA plan subject matter and topics of interest for meetings, roundtables, and conferences. Perhaps the most important part of the committee’s process is to provide insight into what each emerging issue might mean to your mutual. In 2024, we saw the continuation of a hard market for insurance consumers, with uncertainty on risk selection, pricing, and capacity. This market dynamic has been driven by unpredictable protability, continued concern over exposure to climate related severe weather events, difculty in achieving and maintaining insurance to value, caution in the global reinsurance market, and increased regulatory activity in market conduct.

Page 34

2024 ONTARIO MUTUAL INSURANCE ASSOCIATION ANNUAL REPORT34Market Conduct- Fair Treatment of Consumers “Market Conduct” is a phrase most often associated with regulatory and transactional compliance as opposed to the insurance marketplace itself. Regulators, however, are becoming more aggressive in supervising how insurers interact with consumers. This takes several different tacks. Regulators are creating wide ranging guidance setting out expectations on how consumers should be treated throughout the insurance life cycle. These are created in a “principles based” framework, as opposed to the rules-based framework used in the past. Regulators are also dedicating resources and budget to assessing individual insurers on their policies, processes, controls, and practices. All of this has led to an environment where insurers must document how they are ensuring the fair treatment of consumers. This is a signicant departure from insurers’ previous interactions with regulators that were driven by consumer complaints to the regulator on a specic concern or transaction.This all creates a new set of expectations for mutual boards, management, and professionals. As small insurers, located in the centre of their policyholder community, mutuals have always enjoyed a uniquely direct and transparent relationship with policyholders. The focus has always been on customer service, fairness, and a simple approach to doing the right thing. This new regulatory environment, however, comes with a greater requirement to document and proactively prove fairness through formal policies, processes, reviews, and controls. A recent example of this was the completion of a thematic review by FSRA on homeowners claims experiences between 2019 and 2002. FSRA surveyed market leaders and did not impose any signicant requirements on mutuals to report for that period, but this is a new area of regulation and bears watching. We expect the potential for a FSRA Non-Auto Property Casualty Supervision Framework will be a hot topic in 2025. It remains to be seen whether this new approach will positively affect “fairness”, but an additional administrative burden will be created throughout the insurance policy life cycle, especially in the early years. This will particularly impact policyholder communication, sales material, product design, and rating, all of which are direct inputs to the insurance marketplace. A key goal for OMIA is to ensure regulators understand and allow for a proportional approach in how they ask for reporting on market conduct. FSRA also published a thematic review on the role of Managing General Agents (MGAs) and potential consumer protection gaps. Brokerage Consolidation The Canadian brokerage market has rapidly consolidated as small independent, often family owned, brokerages are purchased by larger corporate networks. These networks often are insurer-owned or funded by venture capital. This consolidation reduces the number of brokerage rms, although not necessarily branch locations. The long-term impact of fewer brokerage rms providing advice and markets to policyholders can create strong headwinds, particularly for smaller insurers. A consolidated broker channel reduces differentiation and can eliminate distribution opportunities for individual mutuals if they become just one of several mutuals in a broker network. To counter this, mutuals, both through Collectivde and independently, have been strategic in acquiring interests in the distribution chain to help maintain market share while also allowing broker operators to continue to operate on a scale and with a level of independence that best serves policyholders. Climate Change and Catastrophe Claims There are weather related catastrophes that impact mutuals and the insurance industry at large every year. Catastrophe (CAT) claims have always been with us. The last several years have shown an increasing severity and breadth of damage arising from catastrophes. 2022 was a record year for frequency and severity for mutuals in Canada, which resulted in a call to action on CAT response planning and being able to establish loss reserves accurately and quickly following a CAT event. Good work was done in 2023 on creating and updating CAT plans, but this will be an ongoing task. These plans must be stress tested

Page 35

2024 ONTARIO MUTUAL INSURANCE ASSOCIATION ANNUAL REPORT35and updated on an ongoing basis. One interesting discussion brought forward through the committee was a member survey as to whether mutuals could invest in a jointly owned restoration contractor network to supply repair capacity. While there is not sufcient interest at present, the potential for these creative ideas is important in our longer-term planning discussions. 2024 was a record setting year for loss events relating to ood, wildre, and hail. The claims cost of four large catastrophe events (Calgary hail, Toronto ood, Montreal ood, and Jasper wildre) will exceed $8B. CAT response planning is important, but we also need to consider how to make Canadian structures more weather resilient and how to ensure municipal infrastructure and building code requirements are adequate to mitigate severe water exposure. Research organizations such as the Institute for Catastrophic Loss Reduction (ICLR), which includes signicant mutual participation, play an important role in identifying and communicating practical actions that support resiliency. Generative Articial Intelligence The onset and advancement of articial intelligence (AI) has been in turns exhilarating and terrifying. As much of the early hype has settled down, organizations, including mutuals, have begun to look for ways to learn about and introduce generative AI on a risk managed basis. This technology will undoubtedly change how we do business, but the key element will be looking for opportunities that enhance processes safely, optimize and support mutual staff and leadership, and improve policyholder experience. This will continue to be a front burner topic. Looking Ahead For the nal meeting of 2024, the Market Issues Committee met jointly with the Marketing Committee, with the objective to discover if the important discussions generated at Market Issues could ow through to prioritization and action planning at the marketing and communication level. The committees will continue this pilot project in 2025. The committee will continue to publish Market Watch to members, highlighting how developing trends and ideas impact the market forces that mutuals face. And as always, the committee will identify those emerging issues that deserve a wider forum for discussion and education at mutual events.MARKET WATCHQUICK HITS FROM OUR JANUARY MEETINGIssue No.1 | February 2024Ontario Mutual Insurance Association Newsletter“Plans are worthless, but planning is everything.”-Dwight EisenhowerThis is a periodic update to members on the work of OMIA’s Market Issues Committee. Our mandate is to gather and analyze information on industry trends that affect a mutual’s ability to market their product and serve policyholders; to disseminate information to members and to connect with industry groups.Market Watch will highlight the top items of interest that come to the table at our Market Issues Committee Meetings. The hope is that these topics will offer a timely spark in conversations within your own company and with your network of mutual peers. These topics also guide OMIA planning when considering speaker sessions at our annual conferences.Strategic PlanningA new year inevitably brings questions about “the plan”. But what are the global trends in strategic planning? How do we best implement a plan that includes practical large project management when our day-to-day needs tending to? (And all of this in an ever-changing regulatory environment.)How do we stay fluid, knowing plans change as our governance, technical, and climate environments change?SMART Goals (Specific, Measurable, Achievable, Realistic,Timely) arising from the planning process still offer important grounding and direction, but we’re seeing that flexibility to shift goals is more important now than ever before.Another planning key is making sure all staff understand the “why”. Engaging staff in the process, with frequent reminders of your mutuals’ goals and strategic direction, becomes a critical element in maintaining momentum. It’s important that all staff can see a line between what they do and the organization’s mission. A session on this topic at the recent International Cooperative and Mutual Insurance Federation conference (ICMIF) was favorably reviewed by those who attended. This may offer a resource for future speakers or concurrent sessions at OMIA’s Annual Convention.MARKET WATCHQUICK HITS FROM OUR APRIL MEETINGIssue No.2 | June 2024Ontario Mutual Insurance Association Newsletter“In any given moment we have two options: to step forward into growth or step back into safety.”-Abraham MaslowThis is a periodic update to members on the work of OMIA’s Market Issues Committee. Our mandate is to gather and analyze information on industry trends that affect a mutual’s ability to market their product and serve policyholders; to disseminate information to members and to connect with industry groups.Market Watch will highlight the top items of interest that come to the table at our Market Issues Committee Meetings. The hope is that these topics will offer a timely spark in conversations within your own company and with your network of mutual peers. These topics also guide OMIA planning when considering speaker sessions at our annual conferences.Change ManagementIt may not feel like it all the time, especially as we settle into our day-to-day routines and processes, but change is constant. Indeed, the pace of change out in the wider world is accelerating each year. It’s a good thing our mutual system is well equipped to navigate this (we’ve been around longer than the car, for instance.) However, we know too well that being used to change and having the time to navigate change appropriately are two different things.Change management is a collective term for all approaches to prepare, support, and help individuals, teams, and organizations in making organizational change. In other words, setting yourself up with effective processes for managing change gives you a toolbox to pull from when the change hits the proverbial fan (so to speak). We recognize the many areas our mutuals are being affected by change, ranging from the not so little (amalgamations, new regulatory processes, and broker consolidations) to the still not so little (new staff, new online processes, and key retirements). Artificial Intelligence looms somewhere out there too. We’ll keep our eye on this topic for future conferences or education sessions, but one helpful article posted on Linkedin distills the idea down to the Five Cs: Communicate (clearly), take a Consistent approach, build Confidence by empowering staff, get Commitment from all levels of the organization, and Care about the people working together to make things better. MARKET WATCHQUICK HITS FROM OUR JULY MEETINGIssue No.3 | September 2024Ontario Mutual Insurance Association Newsletter“ere’s always another storm. It’s the way the world works. Some are erce and others are small. You have to deal with each one separately, but you need to keep an eye on what’s brewing for tomorrow.” - Maria V. Snyder, AuthorThis is a periodic update to members on the work of OMIA’s Market Issues Committee. Our mandate is to gather and analyze information on industry trends that affect a mutual’s ability to market their product and serve policyholders; to disseminate information to members and to connect with industry groups.Market Watch will highlight the top items of interest that come to the table at our Market Issues Committee Meetings. The hope is that these topics will offer a timely spark in conversations within your own company and with your network of mutual peers. These topics also guide OMIA planning when considering speaker sessions at our annual conferences.Intact Financial Corporation (IFC) is facing the 2024 wildfire season with a pilot project aimed at providing loss prevention and suppression services, at no additional cost, to eligible Intact Insurance, belairedirect, and Intact Prestige personal property customers (those whose property is threatened by wildfire fewer than five kms away). This is being described as a first-of-its-kind residential service in Canada to help reduce risk and damage to homes caused by wildfire. It also comes at a time when insurers, including the mutuals, are grappling with how to successfully introduce loss prevention tactics and services to homeowners in the face of increasing severe weather events.Our membership with the Institute for Catastrophic Loss Reduction (ICLR) and access to their resources will continue to play a helpful role in our ongoing approach.Intact’s Pilot Approach to Wildfirewww.iclr.org has a number of helpful resources for homeowners and insurers.MARKET WATCHQUICK HITS FROM OUR NOVEMBER MEETINGIssue No.4 | December 2024Ontario Mutual Insurance Association Newsletter“e best way to make things better is to begin. Create the conditions for others to join you. Persist.” - Seth Godin, AuthorThis is a periodic update to members on the work of OMIA’s Market Issues Committee. Our mandate is to gather and analyze information on industry trends that affect a mutual’s ability to market their product and serve policyholders; to disseminate information to members and to connect with industry groups.Market Watch will highlight the top items of interest that come to the table at our Market Issues Committee Meetings. The hope is that these topics will offer a timely spark in conversations within your own company and with your network of mutual peers. These topics also guide OMIA planning when considering speaker sessions at our annual conferences.As discussed in our previous issue, throughout 2024 the mutuals saw an increase in automobile premiums and new business growth. Some of the growth is considered healthy, and in some cases welcomed. An example of this would be auto polices where the mutual has the property. Another would be “new” business that may represent the “recapture” of young drivers whose parents are policyholders but left us in years gone by when our young driver rates were uncompetitive. Some mutuals reported very high growth rates and this raises concerns on the impact down the road in 18 months when loss ratios could climb. In late 2024, the Ontario Mutuals Automobile Plan (OMAP) worked diligently, both at the committee level and with CEOs, to understand the source of the growth and set a plan for rate adjustment sooner than later.Significant weather events cropped up again in the second half of this year, as we saw flooding in southern Ontario, wildfire in Jasper, hailstorms in Calgary, and flooding in Quebec. Those alone resulted in 228,000 insurance claims in the country. (In stark comparison, 2023 recorded 160,000 claims for the year.) “These four catastrophic weather events, which occurred over the span of four weeks this summer, have resulted in more claims in one summer than insurers have reported in any summer over the last 20 years,” IBC CEO, Celyeste Power stated to Thompson’s News. While 2024 weather events largely spared the mutuals, there is no doubt personal property rates will be under upward pressure well into 2025. The challenge of managing weather related losses from year to year underscores the importance of the farm mutual system’s unique reinsurance approach to reinsurance through Farm Mutual Re, who continue to risk manage our reinsurance relationships with the global market.Auto Growth - Still on the Radar Breaking Records (The Bad Ones)

Page 36

2024 ONTARIO MUTUAL INSURANCE ASSOCIATION ANNUAL REPORT36Promotional Materials The OMIA Marketing department was pleased to collaborate with members on multiple individual product and advertisement projects this year and continues to be available for requests.Printed brochure requests continue to increase towards pre-pandemic numbers.Some project examples include local advertisements, special event ads for social media, and brochure material for topics like, Home Systems, The Mutual Difference, Umbrella Liability, Cyber Coverage, and the new telematics product, DriveMutual.We encourage you to contact marketing@omia.com to support your promotional strategy. This service is part of your membership fee, and you only pay the cost of applicable printing and shipping.Priority Exhibitions OMIA was pleased to facilitate a booth at the London Farm Show in March at the Western Fairgrounds. Ontario Mutuals is the exclusive bag sponsor of the show and branded bags were handed out at each entrance. The booth was well-staffed by member company participants over the three days of this large industry event. The Ottawa Valley Farm Show took place the week following at the EY Centre. We were Red Ribbon Sponsors of “Ontario Mutuals Hall A”. Hall A serves as the show’s only dining hall, as well as the backdrop for the opening ceremonies and other events. We were pleased to have a booth at September’s Canada’s Outdoor Farm Show (COFS), the largest outdoor show in eastern Canada. The Ontario Mutuals booth was fully staffed by mutual participants, who greeted visitors over three very busy days. We also hosted representatives from 4-H Ontario in our booth, a mutually benecial tradition we hope to continue. The COFS continues to be a must-attend event for farm producers and suppliers, and we look forward to exploring how we can amplify our efforts there.The International Plowing Match (IPM), of which we were Presenting Partner, took place in Lindsay, Ontario from October 1st to 5th. Our co-branded yardsticks were a big hit with visitors, who also enjoyed a photobooth and a variety of musical acts To raise the prole of mutual insurance.MARKETING COMMITTEE REPORTChair, Kevin Inglis, Howick Mutual2024 Committee Members Deb Van Eyk (Lambton), Tim Wade (Westminster), Kristine Duench (HD), Julie McIntosh (South Easthope), John Taylor (OMIA), Lisa Hunter (OMIA)The committee continues to pursue a variety of marketing projects that communicate the advantages of mutuality to internal and external audiences. We are guided by OMIA’s Strategic Priorities and the needs of the membership.

Page 37

2024 ONTARIO MUTUAL INSURANCE ASSOCIATION ANNUAL REPORT37on the “Ontario Mutuals Main Stage”. The Ontario Mutuals tent was host to 4-H Ontario, as well as staff from The Commonwell Mutual, HTM Insurance, Bay of Quinte Mutual, and West Wawanosh Mutual. This year, we also hosted interactive displays from the local OPP and Fireghters. The 2025 IPM will take place in the Niagara Region in September 2025. We will continue to assess our approach to this large-scale event and ensure our efforts are of benet to all.Broker Conventions Once again, we provided sponsorship to the Young Brokers Conference, held in Niagara Falls in June. We also had the opportunity to facilitate an Ontario Mutuals trade show booth at this popular event. Thank you to HD Mutual for stafng this.The Insurance Brokers Association of Ontario (IBAO) Annual Convention took place in Toronto on October 23rd and 24th. We had an Ontario Mutuals trade show booth, hosted by a variety of mutual participants, as well as an Ontario Mutuals hospitality suite co-hosted by participating mutuals. This continues to be a popular exhibition and networking opportunity for the mutual community.Digital Marketing Many engaging videos promoting the mutual difference have been created over the years and can be found on the Ontario Mutuals YouTube channel as well as omia.com. Hover over Member Resources to see the heading “Video Library” under Marketing.We are encouraged by the view rate results during our campaign efforts as well as the positive reception from our mutual community. Our most recent video releases, “Spotlight on 4-H Ontario” and “Spotlight on AALP”, highlight two organizations that we’re proud to support through sponsorship. Our next release will highlight the efforts of the Rural Ontario Institute’s Rural Change Makers Program.Key Sponsorships We continue to maintain relationships with key partners in the agricultural sector as part of our initiative to remain top of mind in this community. Ontario Mutuals, supports:• the Ontario Plowmen’s Association (the IPM)• 4-H Ontario• the Rural Ontario Institute (ROI) and their Advanced Agricultural Leadership (AALP) and Rural Change Makers programs.• Farm and Food Care Ontario• AgScape• the Ontario Soil and Crop Improvement Association• the Advancing Women in Agriculture Conference• the FarmSmart and Ontario Ag ConferencesWe also provided sponsorship support to the Umbrella Project, the Grow Our People Summit, and the Ontario Cooperative Association’s Cooperative Young Leaders Camp.Market Issues Our committee had the opportunity to hold a combined meeting with the Market Issues Committee in late fall 2024. The goal was to work together to identify key market issues and begin to determine prioritization and action planning. We look forward to more combined meetings in 2025 as we focus our efforts on key issues impacting the mutuals. Looking Ahead The marketing committee will continue to explore opportunities to promote the mutual difference through sponsorships, events, advertisements, and digital streams. Our focus will be on exploring the most mutually benecial ways to support our rural community in the coming years, especially as we face changes in the general approach to large scale in-person events.

Page 38

2024 ONTARIO MUTUAL INSURANCE ASSOCIATION ANNUAL REPORT38Chair, Neil Shay, CTM Insurance2024 Committee Members John Miller (Mennonite – Alberta), Pat Ryan (The Commonwell), Pam Marson (Grenville), Jamie Ellis (PEI), Suanne Wettlaufer (South Easthope), Terry Knight (North Blenheim), Annette Dumbleton (Farm Mutual Re)Cynthia White (Farm Mutual Re), Susan Baker (OMIA)Jennifer Higuchi (OMIA)Composition of the Committee The committee is structured to provide an appreciation of member company perspectives from eastern and western Canada as well as Ontario, from companies whose distribution system is broker driven and those that are agent driven, vendor systems, and the points of view of professionals who look at insurance issues through a mix of underwriting, sales, and claims lenses. A Pivotal Piece of the Development & Updating Process The committee is an important cog in the wheel of activity that surrounds the updating of existing, and development of new, coverage and supporting reference documents for member company use. This committee has been meeting online monthly and has resumed our goal to meet at least once in the year in person. Each meeting includes a discussion of market issues involving current, future, and strategic looking topics, a review of Action Items, a review of projects that OMIA staff believe are ready to roll out and a discussion of requests and suggestions about coverage documents that have come from member companies.We continue to evolve our oversight function by identifying projects as ‘strategic’ or ‘maintenance’ and consciously assigning priority to them. We are improving our ability to track progress on the projects that member companies have identied as having signicant importance to their business. The oversight of the committee will continue to provide a member company’s eye view of insurance market issues around coverage forms.Forms Releases Forms Release webinars continue to follow the release of new and updated coverage documents, underwriting/risk selection guidelines, or information To monitor insurance product trends and provide guidance and, where appropriate, direction to OMIA on the selection, prioritization, and delivery schedule of development projects, to represent members’ interests by providing market intelligence and risk appetite continuums, and to provide oversight of the product development process.PRODUCT STRATEGY COMMITTEE REPORTProviding member companies with the knowledge they need to inspect, sell, underwrite and adjust the inevitable claim is part of the 360° vision we apply to our work of developing insurance coverage and supporting documents. Member companies are well served by the contributions of a wide range of Cambridge and member company staff. This includes the OMIA Insurance Services team and staff from Farm Mutual Re. Member company staff provide input to the development process in a variety of ways, from making the initial inquiry to reviewing coverage forms and supporting documents as a check for clarity and practical use at the company level.

Page 39

2024 ONTARIO MUTUAL INSURANCE ASSOCIATION ANNUAL REPORT39pieces and are well attended by member company staff. During the upcoming year we will continue to experiment with recording short audio les that contain an explanation of some new coverage documents. Based on member feedback that indicated a need for access to ‘just in time’ reviews of new insurance wordings, the plan is to post these sound les with the print version. We will be interested to hear our members feedback on the clips. Projects Since our report to the 2024 Annual General Meeting, the Product Strategy Committee has overseen a variety of projects to completion. A few examples of the updates and new documents are:• Updated 78 OMIA standard endorsements and reference documents, and created new reference documents where none previously existed, to create the 2024 Residential Policy wordings (released in September 2023) • Retired 11 documents from the OMIA Coverage Library of OMIA standard documents• Updated the Additional Conditions (Section III) of the core Residential Package wordings• Worked with Farm Mutual Re to determine which Statistics Canada schedules will reect more accurate Rebuilding Cost Ination gures for Personal & Commercial Lines going forward • Worked with Farm Mutual Re and HSB Canada to update the Home Systems Protection Endorsement, Service Line Coverage Endorsement and Equipment Breakdown Riders for Farm and other Commercial operations • Supported the distribution of updated CGL Rate Pages • Supported the renewal of the E2Value Valuation Tool • Supported the update of the Ontario Automobile updated and new Policy Change forms as needed The committee continues to focus on improving the speed-to-market of products.The challenge of course is to move quickly with development and get consensus on specic points from over 35 independent insurance companies. We have had some challenges, but remain committed to investing in the resources required to meet the demands.What is underway now? Our oversight role on a variety of on-going and planned projects includes:• Updating standard Farm Property Coverage based on current market scan• Updating the Farm Liability Coverage wording • Continue to collaborate with HSB and Farm Mutual Re for upcoming updates to existing Cyber coverage documents and risk selection guidelines as needed• Conduct market scan to determine any necessary updates to the Commercial Property coverage forms including the Additional Agreements• Continue to monitor and determine an appropriate insurance coverage and risk selection response for the insuring of the variety of power-assisted and motor assisted units available to member company policyholders• Support for analysis of exposures introduced due to the ‘Sharing Economy’ • Continue the process of retiring coverage documents that are not used or infrequently used by member companies from the posted Coverage Library• Continue to monitor and analyze current coverage documents based on recent court decisions• Gather from member companies and prepare for input on how to catalogue the OMIA standard coverage library on an updated OMIA member websiteAs always, in response to member company needs, the Product Strategy Committee works with staff to respond to immediate market pressures as they arise.

Page 40

Page 41

2024 ONTARIO MUTUAL INSURANCE ASSOCIATION ANNUAL REPORT41by the mutuals in developing tools to monitor the solvency of individual mutuals and at the mutual system itself. These tools have included the development of Early Warning Tests, the standardization of and education on P&C1 returns and Management Discussion Analysis Reports, and stress testing. Most importantly, it stems from the creation of the Financial Review Committee and subsequently the Financial Examination Committee. From the early 2000s, the Financial Examination Committee (FEC) has closely monitored mutual solvency and reported to the regulator on an ongoing basis to optimize policyholder safety. The FEC grew out of the mutuals’ own Financial Review Committee (FRC) system and members of the FEC were also members of the FRC, providing a cost efcient and effective window on the solvency of each mutual for both the regulator and the Fire Mutual Guarantee Fund members. The work done by the FEC/FRC, while solvency testing focused, also created an effective feedback loop to create best practices for the mutuals in adapting to developments across the spectrum of governance, resilience, and oversight of insurance. Lessons learned from the nancial crisis of 2009 and the global pandemic of 2020 have allowed mutuals to evolve along with the rest of the nancial services industry.In 2022, FSRA implemented a new supervisory framework, the Risk Based Supervisory Framework- Insurance (RBSF-I). OMIA, members of the Fire Mutuals Guarantee Fund (FMGF) Trustee group, the Financial Review Committee, and the membership at large provided a lot of feedback to FSRA on RBSF-I particularly with concerns about how it would operate on a practical level, and whether it would be as transparent, effective, and cost efcient as the previous oversight process. The rst assessment of a member company under RBSF-I began in late 2022 and was completed in Q4 2023. In the spring of 2024, the solvency oversight and ling process that had been delegated by the regulator to OMIA was transitioned back to the regulator. OMIA will continue to follow the solvency regulation process closely and work with FSRA and member companies to clarify process, guidance, and reporting under RBSF-I. In support of the FMGF, OMIA still collects quarterly lings from members for analysis by the FRC and reporting back to members on solvency matters. FSRA Guidance- Operational Risk and Resilience and Corporate GovernanceIn April, FSRA published these two Guidances, which set out their expectation for how Ontario insurers would ensure positive outcomes for policyholders. As principles-based regulation, these documents do not contain rules or prescriptive instructions for insurers but point to desired outcomes and corporate behaviours. The Guidances, when looked at together, require a holistic view of the whole organization, and can pose a signicant challenge for small insurers in developing a strategy to review and explain how current practices t into the broad guidance.In June, OMIA provided detailed submissions to FSRA on each of the Guidances, pointing out the unique perspective of small insurers, who by their nature and size, are well aligned with positive policyholder outcomes, but may feel compelled to create additional administration and cost to meet reporting requirements of the regulator. OMIA will continue to provide feedback to the regulator as these Guidances begin to show up in regulatory assessments of insurers. OMIA has launched a Model Mutual Corporate Governance Framework project to create reference material, examples, and education on how the FSRA guideline can be reected in smaller enterprises like mutuals.Own Risk Solvency Assessment (ORSA)In November 2024, FSRA published proposed Guidance on Own Risk Solvency assessment (ORSA). The initial review of the guidance by OMIA has been favourable and the guidance seems to align well with current mutual practice. OMIA will submit formal feedback to FSRA in early 2025.

Page 42

2024 ONTARIO MUTUAL INSURANCE ASSOCIATION ANNUAL REPORT42Fair Treatment of Consumers – A FSRA Priority AreaFair Treatment of Consumers is a priority area for FSRA. In June 2023, FSRA stated that it was building “supervision capacity and market intelligence in the P&C sector.” This means increased monitoring by the regulator and more reporting by insurers, both of which have cost implications. The current area of focus is FSRA’s Home Insurance Thematic Review Report that was published in June. This report was prepared by FSRA after requiring Ontario’s top 20 insurers to submit data on their home insurance claims practices and outcomes. The areas covered included the shelf life of claims, denials, proof of loss timelines, and complaints. FSRA’s report identies themes on insurer claim performance. We expect that FSRA will continue down this road and press insurers on claims performance. As the mutuals were not represented in the survey, OMIA is informally working with roundtable and member groups to do our own comparison, especially since mutuals’ smaller scale and volume is not an “apples to apples” comparison to the top 20. As of late 2024, it appeared that the ndings of that thematic review would result in FSRA publishing a Non-Auto Property Casualty Supervision Framework for consultation in 2025. Another market conduct initiative from FSRA is a study on how Managing General Agents (MGAs) operate with Ontario insurers. This led to the publication of a Supervision Plan for Property & Casualty Insurer and Managing General Agents Outsourcing Relationships. Further attention was drawn to MGA relationship risk when MGA TruStar Underwriting Inc was placed in receivership at the end of 2024. Although some mutuals have MGA relationships, they are not prevalent, and the risk management required should be relatively straightforward. Of greater concern is work by the Canadian Council of Insurance Regulators (CCIR) on broadening the denition of consumer complaints and creating yet more reporting requirements from insurers. OMIA’s position has been that the complaint system that has been in place for decades works well, and that regulators are blurring the lines into reporting customer satisfaction, which is distinctly different from complaints. FSRA Statement of PrioritiesEach year FSRA publishes its statement of priorities and invites feedback from all stakeholders. The Regulatory Review Committee provides a detailed response to that. FSRA also provides a business plan that sets out its expected budget. OMIA has been tracking the fees paid by members, and these have increased greatly since the creation of FSRA in 2019. Our responses to FSRA and others, including the Ministry of Finance, point out this escalation in fees and the ultimate increase in cost to policyholders. The OMIA Compliance Roundtable and the ERM ForumThe Compliance Roundtable was established to give mutuals an opportunity to discuss practical compliance issues and compare solutions to common problems. The Roundtable is well attended and has input from a working group chaired by George Malitsin of Howick Mutual. Topics in 2024 include Data Compliance, Operational Risk and Resilience, Ministry of Transportation site audits, and internal audit templates. This roundtable also invites FSRA to speak regularly on current topics. In addition to the Roundtable, an informal group, known as the ERM Forum, meets to discuss Enterprise Risk Management practices and problems. Environmental, Social, and Governance (ESG) FactorsAll our mutuals are familiar with this topic, as it has been discussed at a high level at industry events and is covered frequently in the business media. There is a global movement to have businesses of all types formally report on their progress, or intentions, to meet international standards of corporate behaviour for each element of ESG. The Regulatory Review Committee has added this as a standing agenda item, and working with others in the mutual community will assess how best to understand and respond to potentially complex regulatory disclosure requirements. OMIA’s Accounting Advisory Committee is playing a lead role in looking at climate risk reporting as this appears to be the area where actual regulatory activity will be focused.

Page 43

Page 44

Page 45

Page 46

2024 ONTARIO MUTUAL INSURANCE ASSOCIATION ANNUAL REPORT46GROUP AAxiom | Kent & Essex | Lambton | Maple | Salus | Westminster | YarmouthAxiom Mutual Insurance Company hosted the OMIA Group A Annual General Meeting at the Best Western Lamplighter Inn in London on November 21st, 2024. Axiom Mutual Chair, Bill Gibson, welcomed directors and staff from the Group A companies.Farm Mutual Re representatives, JP Gagnon and Kevin Konecny, and OMIA representatives, John Taylor and Marg Torrance, were in attendance. Andrew Campbell of Utensil was the guest speaker.Bill Gibson chaired the meeting during which CEOs from each Group A company introduced new directors and staff and provided updates on their year-to-date performance up to September 30th. All reported positive nancial results.Group A Directors, Tracy Wintermute (OMIA) and Christine Van Daele (Farm Mutual Re), addressed the attendees. OMIA Board Chair, Marg Torrance, praised member companies for their contributions and discussed the importance of OMIA-led education, the relevance survey, and the high level of participation. She also highlighted OMIA’s pillars: Solvency and Compliance, Promoting Mutuality, Resource Centre, Group and Afnity Services, and Data Strategy.OMIA President, John Taylor, expressed his appreciation for the reports from Group A CEOs and discussed the increasing regulatory compliance requirements. He mentioned OMIA’s efforts to simplify regulatory guidance and provide examples to help member companies understand regulations. John also touched on the new Climate Risk Disclosure standard (OSFI B15) and OMIA’s role in assisting mutuals with these requirements, as well as the need for data, upcoming leadership changes, and sustainability.Farm Mutual Re Board Chair, Kevin Konecny, thanked Group A for their support and discussed his activities throughout the year, including mentorship, travel to the UK, and the summer Board Meeting in Chatham. Despite a challenging year for Canadian Catastrophe activity, Farm Mutual Re has remained resilient. Kevin emphasized the importance of governance practices, strategy, and addressing the talent shortage, noting that several positions at Farm Mutual Re will soon be available.Farm Mutual Re President & CEO, JP Gagnon, discussed the active Canadian reinsurance year and its market impact including signicant rate increases by insurers. He stressed the importance of timely loss reporting and encouraged participation in the ICMIF Conference in Toronto in 2026.Shawn Durnin, CEO of Axiom Mutual, presented a report from CAMIC, covering their Strategic Plan and lobbying efforts.Bill Gibson introduced a video and commented on Axiom Mutual’s initiative, The Directors’ Cut which supports local food banks.Andrew Campbell of Utensil delivered an entertaining presentation titled “So…Your Client is a Farmer” and provided insight into trends in the business of farming. We look forward to the 2025 Group A AGM, hosted by Salus Mutual, with details to be determined.Andrew Campbell, the “Fresh Air Farmer,” presents to the Group A meeting.

Page 47

2024 ONTARIO MUTUAL INSURANCE ASSOCIATION ANNUAL REPORT47GROUP BAyr Farmers | BCM | Brant | CTM | Cayuga | Erie | HD | NovaNova Mutual Insurance Company hosted the Group B Annual General Meeting at MontHill Golf and Country Club in Caledonia on November 19th, 2024. Michelle Spoelstra acted as Chair of the meeting. She opened the meeting, welcomed members, and introduced guests and keynote speakers.Eric Harrop, Nova Mutual Chair, made brief remarks on behalf of Nova Mutual’s Board of Directors. Glenn Pick, acting as Group B Treasurer, provided an update on the Group B treasury funds and noted that a cash call of $1,500 will be requested from each Group B mutual in early 2025.Glenn also reported that several housekeeping changes had been made to the Group B Charter and approved by the Group B Executive Committee which took place immediately preceding the AGM. Marg Torrance, OMIA Chair, and John Taylor, OMIA President, each provided updates on OMIA activities.Marg provided a summary of OMIA’s highlights over the year, including seeking feedback from member mutuals on OMIA’s strategic priorities. During her update, she spoke on key issues facing the mutuals and several areas of ongoing OMIA focus, including:• Ensuring that OMIA remains relevant to the needs and concerns of mutuals of all sizes in light of continued amalgamations;• A focus on solvency;• A signicant number of sector submissions to government bodies;• The importance of CEO and Board succession planning with an expected increase in upcoming retirements;• Ensuring that mutual values are promoted;• Enhancing training and education initiatives;• The excellent performance of the funded pension and group benet plans; and• The need to continue to enhance data collection and business intelligence.Marg also noted the record number of qualied candidates for the OMIA Director at Large positions - a reection of a high level of member engagement. Marg shared her hope that the mutuals would continue to lean on each other, and the collaborative process, to meet the evolving needs of the sector and our members.John Taylor provided an update on current OMIA initiatives designed to strengthen the mutuals and enhance OMIA’s contribution. He shared some key messages from the recent OMIA member survey:• The need for enhanced support in relation to increasing compliance and regulatory requirements. John noted the regulator’s emphasis on the requirement for a strong corporate governance framework with their recently released Corporate Governance Guideline. OMIA supports the six core principles and will work to assist mutuals in interpreting and fullling these guidelines, including through enhanced training and education programs.• The expected new FSRA Guidelines on capital management/ORSA Guidance, including potential expectations relating to climate risk exposure and reporting. John noted that, while these provisions may not yet apply to the mutual sector, we need to ensure that we will be ready to meet these requirements as needed.• Conrmation of a good working relationship with the regulator, including a greater level of transparency and understanding.• More alignment on strategic data needs and data quality and reliability; and• The need to enhance efforts to promote mutuality.John stated that OMIA would continue to work with its member mutuals to ensure the long-term sustainability of the sector. He stressed that mutual collaboration is a sturdy foundation on which to continue to build.

Page 48

2024 ONTARIO MUTUAL INSURANCE ASSOCIATION ANNUAL REPORT48Kevin Konecny, Farm Mutual Re Chair and JP Gagnon, Farm Mutual Re CEO provided updates to the meeting on recent Farm Mutual Re activities.Kevin encouraged members to invite JP to attend mutual board meetings to facilitate ongoing communication between the membership and Farm Mutual Re.Kevin noted that the board now has its rst independent director and welcomes this new perspective. He indicated that three directors will reach their maximum term limits in 2028 and encouraged members to contribute to the board’s “evergreen list” when they become aware of well-qualied candidates, in particular, individuals who possess risk management, reinsurance, strategic planning, and Board/CEO performance management experience.JP Gagnon provided an update on Farm Mutual Re operations, noting that a detailed update in this regard took place at the October P&M meeting. He noted the signicant pressure on the reinsurance system with respect to rates throughout North America, with double digit increases being seen. He stressed that this environment should give mutuals the leverage they need to consider increasing primary premiums to meet increasing costs and assist in managing reinsurance costs.Ben Telfer of ICMIF and Joe Dietrich presented on the global view of a Modern Mutual, which highlighted the ICMIF and global landscape of mutual insurance, set out the strategic advantages of modern mutuality, and cited case studies on communicating the benets and differentiation of mutuality to members.At the conclusion of the presentation, meeting participants participated in a Q&A Session.Glenn Pick was joined by the Group B Mutual CEOs for a panel discussion on key issues facing the mutual sector in Ontario. A summary of the discussion points included:• Key takeaway messages from the recent Biennial ICMIF Conference;• How mutual’s can stay relevant to the ever-changing landscape and what that looks like for a mutual CEO;• The critical success factors of the next generation of CEOs and Boards to successfully lead mutuals into the future;• The impact of ever-increasing reinsurance rates on mutuals and how the mutual community is going to solve this problem;• Flexible work arrangements and its impact on talent management;• Whether insurance is becoming “unaffordable” and what can mutuals do to mitigate this impact;• The impact of AI on maintaining personal relationships with members; and• The impact of increased regulatory requirements on the role of both the board and the CEO.Each of these questions was addressed by the CEO Panel and lively discussion ensued.Michelle Spoelstra provided brief closing remarks, noting appreciation to the meeting organizers, participants, speakers and presenters. We look forward to next year’s AGM, to be hosted by Ayr Farmers Mutual. The Group B CEO Panel

Page 49

2024 ONTARIO MUTUAL INSURANCE ASSOCIATION ANNUAL REPORT49GROUP CMutualONE | North Blenheim | South Easthope | Tradition | Usborne & Hibbert | West WawanoshWest Wawanosh Mutual Insurance Company hosted the OMIA Group C Annual General Meeting at the Arden Park Hotel in Stratford, on November 22nd, 2024.Attendees were welcomed by Chair, Brad Vanstone and President & CEO, Cathie Simpson.There were approximately 60 people in attendance.Each company presented their 2024 3rd quarter year-to-date nancial results, projects, challenges, and an end of year outlook. We were joined by OMIA Chair, Marg Torrance, OMIA President, John Taylor, Farm Mutual Re Vice Chair, Jill Taylor and Farm Mutual Re CEO, JP Gagnon, as well as Group C representatives on the OMIA and Farm Mutual Re boards, Lloyd McGillivray (OMIA) and Teresa Martin (Farm Mutual Re). Cathie Simpson presented to the group on behalf of CAMIC CEO, Sangita Kamblé.Each guest gave updates and shared successes and challenges experienced over the past year and plans for the coming year.Susan McGeachie, Co-Founder and Managing Partner, Global Climate Finance Accelerator provided a presentation on “Effective ESG Governance for Corporate Boards.” This was a high-level presentation on the background of ESG and a discussion on how to best integrate into the investment strategy of the company. Susan took away three key issues/questions raised from the follow up discussion:• How do carbon taxes incentivize adoption of solutions in the absence of alternatives?• Who owns the benets of wind turbines on farmland?• How can carbon removal credits be simplied?Susan believes building an effective, socially inclusive climate-aligned market requires that everyone, from urban residents to rural farmers, have the tools and incentives to participate.After Susan’s presentation, there was an opportunity for general discussion and any questions from those in attendance before the meeting concluded.Following the lunch break, the Chairs and Vice Chairs of Group C took the opportunity to hold a roundtable discussion on topics of interest and commonality.We look forward to the next meeting to be hosted by MutualONE on November 21st, 2025, at the Arden Park Hotel, Stratford. West Wawanosh’s Brad Vanstone and Cathie Simpson bring the Group C Annual Meeting to order.

Page 50

2024 ONTARIO MUTUAL INSURANCE ASSOCIATION ANNUAL REPORT50GROUP DAlgoma | Edge | Germania | Howick | Heartland (Associate) | Peel | TrilliumDufferin Mutual Insurance Company hosted the Group D Annual General Meeting at the OMIA and Farm Mutual Re ofces in Cambridge on November 18th, 2024.There were approximately 60 attendees, most of whom attended in person. Video streaming was also provided for remote participants.Dufferin Mutual Chair, Guy Gardhouse, welcomed the attendees. Mike Fortuna, Group D treasurer, and CFO of Edge Mutual, provided an update on group nances. Individual Group D CEOs provided nancial and operational updates as at October 2024 YTD.OMIA Chair, Marg Torrance provided an update and discussed the ve strategic pillars for OMIA and how they continue to be relevant:• Solvency and Compliance• Promoting Mutuality• Resource Centre• Group and Afnity Services • Data StrategyOMIA President, John Taylor spoke briey on the following topics:• Compliance and regulator relationships• Internal controls/policies and procedures as a part of Governance• ORSA guidelines on capital management from FSRA• Adapting to Climate Change regulations and reporting• Data Volume – Quality and Timeliness• OMIA commitment to various themes impacting mutualsFarm Mutual Re Chair, Kevin Konecny gave an update on progress and topics that were addressed at the P&M in October:• Taking an approach to answer questions relevant to Mutuals• Engagement with Mutual Board Members • Open search for directors• Ongoing Improvement projectsFarm Mutual Re President, JP Gagnon spoke on a number of topics, including: • ICMIF Conference - Mutual sustainability/Focus on Business practices rather than regulations• Reinsurance Market• Renewal targets with increases in retention limits• Shortening reporting periods• Reorganization of IT for process improvements and increasing value to the Mutuals• Tactical ObjectivesDufferin Mutual CEO, Ed Forbes provided an update on CAMIC on behalf of CAMIC President, Sangita Kamblé. The focus of the presentation was on CAMIC’s Strategic Plan, including:• Member priorities and engagements• Stakeholder and People priorities with desired outcomes• Lobbying initiativesFollowing these updates, there were three afternoon breakout sessions available for attendees:• Ontario Auto (Tyler Kroetsch, VP OMAP)• Collectivde Update (Tony Ngo, President & CEO)• Risk Based Supervisory Framework (Stephen Grant, Bennett Grant LLP)Trillium Mutual will host the 2025 Group D meeting on November 17th, 2025.

Page 51

2024 ONTARIO MUTUAL INSURANCE ASSOCIATION ANNUAL REPORT51GROUP EAmherst Island | Bay of Quinte | The Commonwell | Grenville | HTM | L&ABay of Quinte Mutual Insurance Company hosted the Group E Annual General Meeting at Wild Lot Farm Distillery in Prince Edward County on June 4th, 2024.Bay of Quinte Mutual Chair, George Taylor welcomed 52 participants and shared his hope that everyone would have a good day, learn something, and actively participate in the break-out group discussions. OMIA Chair, Marg Torrance, OMIA President, John Taylor, Farm Mutual Re Chair, Kevin Konecny, Farm Mutual Re President & CEO, JP Gagnon, and CAMIC President, Sangita Kamblé joined us as special guests.The meeting was composed of two distinct sections: the business session and break-out group discussions. The business session included updates from the CEO of each Group E company and remarks from OMIA, Farm Mutual Re, and CAMIC representatives.The company updates included information about nancial results, current activities and projects, governance, and general industry concerns.OMIA Chair, Marg Torrance spoke about her theme of “Learning, Living & Leaning in”. In addressing “learning from the past”, she noted that in the aggregate, the mutuals in Group E have been providing insurance for approximately 800 years. In addressing “living in the present”, she referenced Group E’s active participation and leadership in the mutual insurance industry, and as for “leaning into the future”, she spoke of facing new risks and adopting necessary change, as we have many times before. Marg highlighted the strategic planning taking place at OMIA and the Association’s goal to evolve so it can continue to respond to the changing needs of the membership. OMIA President, John Taylor discussed recent nancial solvency oversight changes and the discontinuation of the Financial Examination Committee’s work with the regulator. The Financial Examination Committee will return to its previous role as the Financial Review Committee and will focus on overseeing the nancial solvency of the Fire Mutuals Guarantee Fund members and reporting to the trustees and member companies. Farm Mutual Re Chair, Kevin Konecny spoke about the strategic plan adopted by the board that provides a new direction for Farm Mutual Re. It contains three imperatives: gain member insights, increase the broker distribution business, and build resiliency. Kevin also noted that the board is focused on improving its governance. The rst independent director has joined the board and Kevin indicated that the board is beneting from this new director’s experience and insights. Kevin also discussed one of the issues that was raised when he met with Farm Mutual Re’s reinsurers in Europe: the need for data to illustrate activities by member companies to address reinsurer concerns.Farm Mutual Re President & CEO, JP Gagnon spoke of the large losses incurred in 2024. At the time of this meeting, there have been four losses ceded to their reinsurers, which is a concern.Wild Lot Farm DistilleryA unique meeting space

2024 OMIA Annual Report

Page 1

Page 2

Page 3

Page 4

Page 5

Page 6