PTVCA Protective Insurance Corp.

Risks

• We compete with a large number of companies in the insurance industry for underwriting revenues.
• Changes in laws and regulations governing the insurance industry could have a negative impact on our ability to generate income from our insurance operations.
• A material decline in our financial strength rating could adversely affect our position in the insurance market and cause a significant reduction in our premiums and earnings.
• We have two classes of common stock with unequal voting rights that are effectively controlled by our principal shareholders and management, which limits other shareholders’ ability to influence our operations.
• We are subject to credit risk relating to our ability to recover amounts due from reinsurers.
• We may incur additional losses if our loss reserves are inadequate.
• The loss of our major customer could severely impact our revenue and earnings potential and A.M. Best rating.
• Our collateral held may prove to be insufficient.
• A material drop in interest rates, or disruption in the fixed income markets, could have an adverse impact on our earnings and, potentially, our financial position.
• Our investment portfolio is subject to market and credit risks, which could affect our financial results and ability to conduct business.
• Technological advances, including those specific to the transportation industry, could present us with added competitive risks.
• The failure of our information technology systems and other operational systems to operate properly or disruptions or breaches of our information systems could adversely affect our business, results of operations and financial condition.
• Changes in current accounting practices and future pronouncements may materially impact our reported financial results.
• We may be unable to attract and retain qualified employees and successfully execute our Chief Executive Officer transition.