Driving Forward
Like the public and affordable housing industry we serve, HAI Group has become adept at driving forward. Since our earliest days, when we came together to solve the insurance crisis that plagued public housing, we’ve continually sought new ways to meet our members’ needs.
Today, more than 30 years since our inception, we’re still driving forward.
In 2021, not only did we continue to navigate the evolving needs—insurance and otherwise—of the multifamily affordable housing industry, but we also, like organizations around the globe, grappled with the ongoing safety, health, and business challenges created by the COVID-19 pandemic. And drive forward we did, responding to these challenges with clarity, speed, and an unwavering dedication to our membership, racking up some notable wins along the way.
Driving Value for Members
Despite myriad unforeseen challenges, 2021 ended on a high note for HAI Group, driven largely by favorable investment returns and a combined ratio of 84 percent. The company posted a net income of $41.5 million, asset growth was 7.2 percent (totaling more than $53 million), topline revenue was $209 million, and total surplus growth was 10.5 percent ($41 million). The company also maintained excellent relationships with reinsurers, who help us expand our capacity, stabilize our underwriting results, and transfer risk, and who are critical to our success.
This strong performance in 2021 enabled HAI Group to declare $12 million in policyholder dividends, returning value directly to our membership. It also enabled us to increase our Loss Prevention Fund, which reimburses members for certain risk management initiatives, to $2 million (up from $1 million).
Driving Toward a Better Future
With an eye toward a better future, HAI Group awarded educational scholarships totaling $114 thousand to 19 students residing at properties we insure. This year’s recipients, who came from 16 housing organizations across 13 states, will use the funds to pay for their higher education as they pursue careers in accounting, biology, business, criminal justice, early childhood education, political science, and social work.
While the pandemic altered office life, employees once again voted HAI Group a Top Workplace in Connecticut, which will help us continue to attract the best and brightest talent. The organization also received national awards for:
• Formal Training
• Employee Value Proposition
• Work Life Flexibility
• Top Managers
• Diversity, Equity, and Inclusion.
Conventional business wisdom says that happy employees produce happy customers, and we’ve seen this bear out at HAI Group. In 2021, the company enjoyed a 98 percent customer retention rate, and, as noted, declared $12 million in policyholder dividends. More good news: AM Best, an independent credit rating agency that focuses on the insurance industry, reaffirmed our Financial Strength Rating of A (Excellent) and Issuer Credit Rating of a+. These independent, objective opinions, which address how well HAI Group will meet ongoing insurance policy and contract obligations, and ongoing financial obligations, respectively, should be welcome news to our members as they continue to depend on HAI Group for reliable, affordable insurance coverage tailored to their needs.
As always, HAI Group’s success would not be possible without the unwavering support and dedication of our members, board and committees, policyholders, and employees.
As the public and affordable housing industry continues to drive forward, HAI Group remains committed to serving you in your mission to provide safe, decent, and affordable housing for all Americans.
Letter from Ed Hinajosa
Chairman of the Board
Like most of you, I could never have imagined that 2020 would be as tumultuous as it was. The pandemic surged, the cost of climate- and weather-related disasters ran into the billions, and news of political and economic upheaval dominated the headlines. Because many of these challenges were new, they were extremely difficult for businesses to navigate. What a difference a year makes!
We now have COVID-19 vaccines, and we’ve seen a positive shift in funding and sentiment in the affordable housing industry with the current administration. Of course, we still struggled with the health and economic impacts of the pandemic, along with inadequate budgets and the devastation brought about by extreme weather, to name some of 2021’s bigger challenges. But as they’ve done in the past, even through tough times, and perhaps especially through tough times, HAI Group employees banded together to push the organization forward. Under the leadership of Ed Malaspina and his Executive Management Team, the organization remained committed to the membership as we continued to pursue our collective goal: promoting, protecting, and preserving affordable housing in our communities.
Clearly, Ed’s strategy and the company culture he and his team created is working. Despite all the ways the pandemic altered office life, HAI Group employees once again voted HAI Group a Top Workplace. The organization received a slew of other accolades as well, including awards for:
• Formal Training
• Employee Value Proposition
• Work Life Flexibility
• Top Managers
• Diversity, Equity, and Inclusion.
In 2021, as always, HAI Group acted quickly to adapt and support our members as we faced new challenges. Through a combination of strong leadership, an inclusive company culture, dedicated employees, and sound financial management, HAI Group continues to drive forward and be a true partner to the public and affordable housing industry as we navigate a new normal.
In the coming year, I look forward to continuing to collaborate with my fellow board and committee members, with Ed Malaspina and the hardworking team at HAI Group, and with our wonderful membership as we strive to ensure that all Americans have a safe, decent, and affordable place to call home. In this critical mission, let’s continue to do everything we can to make sure we’re always helping each other drive forward.
Letter from Ed Malaspina
President and Chief Executive Officer
In times of adversity or misfortune, you often find rudderless ships at sea. Of course, it’s natural for people to freeze under duress, especially when they’re panicked. Since we were living through a pandemic in 2021, many people were in constant crisis mode—a full-blown Code Red for 365 days. But at HAI Group, we thought, “How do we live with COVID-19? How do we overcome the challenges it poses? In other words: How do we drive forward?”
When I think back over the course of the year, I’m reminded of how much uncertainty was piled onto an already unstable time in our lives. Catastrophic weather events continued to unfold. Cybersecurity attacks occurred daily. And COVID-related economic struggles impacted more people than ever before. Throughout 2021, I feel as though HAI Group was a lighthouse for many, but especially for our members. We were stable. We offered guidance. We strove to be a beacon of hope.
During this time, the Executive Management Team and I did our best to plan for a future without the limitations of a pandemic. We thought, “How do we anticipate the ways in which our members will need change to meet this ‘new normal’ that we’re living in?” Our goal was to anticipate our customers’ needs while also understanding that their expectation of what they needed from us had changed. As a good business partner, we aimed to develop new solutions without our customers having to detail every nuance; we strived to ensure that our customers did not experience any insurance-related struggles as they managed unprecedented change.
People often talk about work/life balance. But when the two worlds become one, it challenges organizations to develop new ways of working while incorporating new communication tools. (You want to move pieces of the puzzle without anyone knowing and still having a complete puzzle at the end.) We found that balance in 2021 and were able to change the mechanics of what we do—and how we do it—without affecting the results. As HAI Group has done for many years, we were able to drive forward.
Our support network has—and always will be—strong. I’d like to personally thank our board of directors, committee members, employees, and business partners. There truly is strength in numbers, and each of you helped us achieve great success in 2021.
Our Companies
Housing Authority Risk Retention Group, Inc. (HARRG)
HARRG provides liability insurance to public housing authorities. Available coverages include general liability, public officials’ errors and omissions, employment practices, law enforcement, lead-based paint, employee benefit, auto, hired and non-owned auto, mold, and terrorism. HARRG is owned by the members it insures. HARRG is a nonprofit, taxexempt captive mutual risk retention group, operating under the Federal Risk Retention Act, licensed and domiciled in Vermont. HARRG began operation on June 1, 1987, and was incorporated on March 20, 1987.
Housing Authority Property Insurance, A Mutual Company (HAPI)
HAPI is a licensed insurer and reinsurer providing commercial property and liability insurance coverage to public housing authorities. Available coverages include property, inland marine, equipment breakdown, auto liability, physical damage, fidelity, crime, liability, and terrorism. HAPI is owned by the members it insures. HAPI is a traditional mutual insurer domiciled and licensed in Vermont. HAPI is licensed in 48 states and the
District of Columbia. HAPI began operation on August 1, 1988, as a mutual association captive. HAPI converted its charter in 2003 to a nonprofit, tax exempt, traditional mutual insurer and issues policies on a direct basis. HAPI was incorporated in Vermont on March 20, 1987.
Housing Enterprise Insurance Company, Inc. (HEIC)
HEIC is a licensed insurer providing commercial insurance and risk management programs to affordable housing providers. Available coverages include property, liability,
inland marine, hired and non-owned auto, equipment breakdown, and terrorism. HEIC is licensed in 48 states and the District of Columbia. The company is jointly owned by
HARRG and HAPI as a subsidiary. HEIC began operation in August, 2001, and converted its charter to a for-profit, admitted licensed stock insurer domiciled in Vermont on December 31, 2007. HEIC was originally formed as a sponsored captive insurer, Housing Enterprise Risk Services, Inc. (HERS), which was incorporated in Vermont on August 20, 2000.
Housing Specialty Insurance Company, Inc. (HSIC)
HSIC is an excess and surplus lines insurer that provides a non-traditional insurance program to public and affordable housing providers throughout the United States. The company is jointly owned by HARRG and HAPI as a subsidiary. HSIC is a for-profit property and casualty stock insurer domiciled in Vermont on January 15, 2014. HSIC was incorporated in Vermont on December 9, 2013.
Innovative Housing Insurance Company, Inc. (IHIC)
IHIC is a captive insurance company owned by HARRG. It engages in the business of insuring and reinsuring various types of risks. IHIC is licensed and domiciled in Vermont. IHIC began operation on November 1, 2015, and was incorporated in July 2015.
Housing Investment Group, Inc.
(HIG)
HIG is responsible for investing in opportunities that further the missions of HARRG and HAPI. HIG is a downstream, for-profit business serving as an investment holding company owned jointly by HARRG and HAPI. HIG owns two taxable subsidiaries: HAGL and HIS. The financials of for-profit ventures have been consolidated since January 1, 1996. HIG was incorporated in Delaware in June 1995.
Housing Telecommunications, Inc. (HTI)
HTI is responsible for delivering training and education programs via the internet. HTI began operations on December 28, 1995, and originally delivered services via satellite broadcast and converted to web-streaming technology. HTI is a nonprofit organization
incorporated in Connecticut in September 1993.
Housing Authority Insurance, Inc. (HAI)
HAI sponsors programs for its membership, including insurance and risk management programs, scholarship and internship programs, and charitable activities. HAI advocates and supports legislative and regulatory issues that help improve the public and affordable housing industries. HAI is a nonprofit association incorporated in 1987.
Public And Affordable Housing Research Corporation (PAHRC)
Our research center strives to be the nexus for current data and research on public and affordable housing. The research is used to support the efforts of affordable housing stakeholders and to enhance the quality of life for low-income families. PAHRC collects primary data from the industry and compiles data from a variety of secondary data sources. PAHRC generates industry-specific reports and frequently works in partnership with industry groups in support of its stakeholders. PAHRC is a nonprofit organization incorporated in Connecticut in March 2011.
2021 Board of Directors
Back row: Scott Bertrand (Vice Chair); Ed Hinojosa (Chair); Jane Smith; Fernando Aniban; Russell Young; Vince Pearson; Ed Lowndes
Front row: Jeffery Patterson; Duane Hopkins; James DiPaolo; Ed Malaspina; Doug Dzema; Kevin Loso; Richard Browne
Not pictured: Mary Smith
2021 Financial Statements
