Each year the Board of Directors makes certain that adequate funds remain in the Company’s surplus account to ensure current and future obligations can be met. They also consider if sufficient funds are available for the Company to continue to grow and assume additional risk each year.
When the Board of Directors is satisfied these obligations can be met, they can declare a refund from the members’ equity account.
To learn more about Refund of Premiums, please click here.
How a Mutual Company Works
As a Mutual Company, we have two main sources of income – the premiums paid by Policyholders and our investment returns. Conversely, we also have two major costs – claim payments and operational expenses.
Premium & Investment Returns - These income sources are allocated towards the surplus, members equity, investing in the community, and refund of premiums.
Claims & Expenses - While we have control over certain premium incomes, operational expenses and investment returns, there is very limited control over the claims expenses.
A surplus ensures that we remain in a strong position for our Policyholders and that we have the ability to meet all our future obligations. As Ayr Farmers continues to grow, a larger surplus is required.