To begin, we should look to the record success that National Catholic produced in its marketing efforts and results. More new shareholders joined the company in 1999, than did so in any other year of company operation. More specifically, eight new shareholders were added to National Catholic's membership in 1999: the Diocese of Beaumont, TX, the Diocese of Buffalo, NY, the Archdiocese of Miami, and five additional Florida dioceses, including Orlando, Palm Beach, Pensacola-Tallahassee, St. Augustine, and Venice. Several other prospective dioceses received quotes, and remain as very viable 2000 prospects.
National Catholic also took significant actions in pursuit of its goals of providing cost effective products, while simultaneously improving service on a consistent basis. In this vein, the National Catholic policy forms were enhanced through the additions of Teaching and Research Laboratory coverage and Lead Hazard coverage, and also, via liberalization of the Notification of Claims Condition. National Catholic additionally established a toll free number for improved access, and also, upgraded and updated its website.
Your company also took a major step toward its long range strategic objective to play a leadership role in financing and managing the liability risks of the Catholic Church, by expanding its staff through the addition of two new full-time employees - - a President/CEO and a Director of Underwriting. Further, a new home office was established which is better equipped to provide shareholder services, and also, to accommodate company growth and development.
Significantly, National Catholic made tremendous strides in the development of its VIRTUSTM initiative/program. VIRTUSTM will establish the "platform" and foundation for all of National Catholic's risk control efforts. Its elements will eventually include publications, audio/video assists, on-site training, web-based training, and "train the trainer" programs. Our goal is to provide an unparalleled package of loss prevention and loss control components, so as to maximally assist the Church with the protection of its human, physical and financial assets.
Finally, last but certainly not least, National Catholic produced excellent financial results in 1999. Your company generated a $1,174,415 operating profit, while simultaneously completing the fourth year of the five year return of capital program, by redeeming $1,459,574 of initially contributed capital shares, concurrent with a reduction in the initial capital contribution requirement, from 60% to 30% of first year premium. Meanwhile, year over year investment results improved, and the Board authorized a $5,027,303 share dividend, which was distributed to shareholders that were insured by National Catholic as of December 31, 1998.
All in all, National Catholic has very much to be thankful for. Similarly, the company and its shareholders have much to look forward to. We are committed to the development of VIRTUS™. We are dedicated to expanding National Catholic's services and products, and to constantly improving those that we provide. We are excited about growth prospects in 2000. Opportunities abound for National Catholic to assist the Church in the risk management and insurance arenas, and we intend to maximize those opportunities.
In closing, I want to thank all of our shareholders and friends for your support, confidence and encouragement. We at National Catholic feel blessed to have the opportunity to serve you and our Church.
Michael J. Bemi
President and CEO
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