2025 Rates and Declared Dividend Announcement
We are pleased to report that OMIC continues to perform as one of the most fiscally sound insurance companies in America. Our results through June 30, 2024, show policyholder growth has already exceeded our year-end projection of 6,300 insured ophthalmologists. And, once again, OMIC's strong balance sheet was referenced by the A.M. Best Company when they reaffirmed our "A" Excellent financial strength rating for 2024.
As we celebrate our achievements, we continue to monitor an increased level of claim activity in the medical malpractice industry. Both the number and size of claims are trending upward due to the same inflationary pressures seen throughout society. As always, we encourage you to contact your state legislators to express the need for sensible tort reform to control the cost of healthcare delivery.
The good news is that OMIC has successfully managed the increasing costs of doing business by improving efficiencies in our core functions. We remain laser-focused on containing claims expenses while at the same time vigorously evaluating, addressing, and defending claims against our insureds. We've streamlined our operations over the past three years, renegotiated service provider contracts whenever possible, and eliminated several identified redundancies in our processes and procedures.
In addition to these cost-saving measures, we have determined that we must prudently align rates with expected future costs of doing business. As a result, our 2025 rates will increase by an average of 6.7% nationally, with rates varying by state and coverage territory. We remain committed to only charging you the premium we project will be required to pay claims and operate OMIC responsibly.
We will also continue to return premium to our members above that which is necessary to prudently run the company. In keeping with that commitment, we are pleased to announce a 5% dividend credit, which will be applied to your 2025 renewal policy. Of 50 companies activity writing medical professional liability insurance, only 25% of them, including OMIC, issued dividends each year during the past decade. More than half issued no dividends at all during that period. Among the quarter of insurers issuing consistent returns, OMIC's average dividend of 15% significantly exceeded the industry average.
The net effect of this dividend will keep the cost of insurance flat (or close to it) through next year for most insureds. OMIC-insured ophthalmologists will need to be insured by OMIC on 12/31/2024, renew their policies in 2025, and, per OMIC's Bylaws, be a member of our sponsor, the American Academy of Ophthalmology, to qualify for this dividend.
OMIC is unique within our industry with regard to our continuing issuance of policyholder dividends during the current inflationary environment. With this declared dividend, OMIC will have issued dividends in 30 of the past 38 years and returned more than $105 million in cumulative policyholder dividends. Your support of our program has contributed immensely to the continued growth of our company and these consistent returns.