Letter from the CEO

Constellation Inc., the largest medical professional liability organization in the Midwest and Mountain states, continues to grow. We ended 2015, our fifth year as a mutual holding company, in a solid financial position, allowing us to continue to help physicians and all those who devote their lives to health care attain their dream – to help and to heal. 

Industry rating agency A.M. Best again affirmed our financial stability with an “A” (“Excellent”) rating for MMIC, our founding member company with a leadership position in the Midwest, and for Arkansas Mutual Insurance Company, who recently joined the Constellation family on July 31, 2015.  A.M. Best also affirmed the “A-“ (“Excellent”) rating for UMIA, a member of the Constellation family since 2013 providing professional liability insurance in the Mountain states of Utah, Montana, Wyoming, Idaho and Oregon. The rating agency based its recent ratings on a review of the companies’ 2015 results. 

Continued strong members’ surplus

As 2015 came to a close, our members’ surplus, another indicator of financial strength and stability, stood at $335 million, up 1 percent over 2014. These funds are available to cover our future obligations and to invest in opportunities that will add further value for our members.

Extraordinary customer loyalty and retention

Further evidence of our stability was reflected in the extraordinary customer loyalty and retention we enjoyed in 2015. More than 98 percent of our clients chose to continue their policies with a Constellation company instead of switching to a competitor.  We are deeply honored by the trust our clients place in us and are privileged to serve them.

Consistent with the industry, Constellation companies faced continued pricing pressure in 2015 due to increased consolidation and competition in the health care market, along with high levels of available capital that drove lower premiums. Net premiums earned closed at $145.1 million. Though revenue was down, this was offset by fewer claims paid on existing policies, leading to a moderate decline in profitability. Net income, excluding a one-time asset impairment loss, was $22.8 million for 2015 compared to $35.5 million the previous year.

Growth to achieve our mission and vision

The addition of Arkansas Mutual Insurance Company to our family of companies in 2015 increased the value of Constellation and strengthened the capabilities of all our member companies. Bringing Arkansas Mutual and other successful companies into the Constellation family is fundamental to our long-term strategy to grow our presence nationally, increase operational efficiencies and develop unique solutions.  Ultimately, this strategy will enable us to achieve our mission of supporting physicians and our vision to be a collective of companies that has a transformative impact on helping deliver better patient care.  We look forward to another year of service.

Bill McDonough
President and CEO
Constellation