Dear Policyholders,

History will mark 2012 as one of the best years that MEMIC has ever experienced. We maintained our primary mission of outstanding service to our customers and their employees, while continuing to run a strong internal operation which contributes to the financial strength of the company. The year also marked premium growth and geographical expansion that now moves MEMIC into the category of a "super regional" insurer, and one to be proud of!

Let's look at some of the metrics that illustrate this success:

• Direct written premium surpassed $200 million for the first time in our history.
• Premium outside of Maine grew by more than 30% with business written in 45 states.
• A $56 million increase in our asset base brought us to the $900 million threshold.
• New offices opened in New Jersey and Pennsylvania, while finishing touches were applied to Florida in 2013.
• For our mutual customers, a hefty dividend was declared amounting to more than 10% of premium.

While I could go on, I don't want to lose sight of the tremendous contribution from you—our policyholders and your employees. Your continued commitment to a safe workplace is evidenced by the decline in on-the-job injuries recorded again this past year. Without your involvement in this effort, none of these achievements would have been possible. Truly, this is a productive partnership that we have created and the success is evident in so many ways.

So, 2012 is now part of our history and we look forward to the challenges which lie ahead. This is the culture we have built at MEMIC: "How can we do better?" Whether it means helping a customer improve their workplace, encouraging and enabling an injured worker to return to work, or working with an independent insurance agent to match our skills with their customers' needs, we are ready. As you'll see in the following pages, our employees simply love what they do and enjoy a tremendous level of satisfaction in a job well done. They love success and I love their commitment!

Thank you for the trust and confidence you have placed in this company. Again, without you, none of this success would be possible. I know that I speak for our Board of Directors as well as my fellow employees when I tell you that we will never let you down. We will continue to honor this commitment and deliver on this promise. Yes, the future has challenges but it also provides an opportunity for us to build upon the culture that has strengthened over the past 20 years. We're proud of our 2012 accomplishments but we know we still can do better. Working together guarantees an even brighter tomorrow.

Thank you.