2006 Annual Report

Investing where you get the Greatest Return

From my perspective, 2006 was a "validation year." We work extremely hard in developing and refining a business strategy that can be communicated and executed at all levels of the corporation. It contains the "normal stuff," like vision, benefit, focus, and motivation. We apply it to both internal and external decision making, opportunities that present themselves, and challenges which threaten or concern our operations.

As you read the reports on our operational areas, you will develop an understanding that each department has incorporated this strategy into business models that guide their day-to-day decisions and communications.

A model is really nothing more than a guide. It's a picture of what you would like your end work to resemble. Like most things in real life, and certainly like those plastic cars I used to build as a kid, the end result doesn't always turn out exactly like the model…but it's close. There might be a few parts left over here and there, but what you have is a lot better than proceeding without a plan, a picture, or instructions.

Central, like other businesses, expresses our desired results in terms of objectives and goals usually described in percentage points, dollars, or ratios. Truly, it's a way of keeping score and ultimately recognizing positive efforts in moving our company forward. A little internal competition and score keeping is healthy for any organization. We typically don't compare ourselves to our competitors, because we don't really care what they want to do with their companies; we care about our company.

We value things that are difficult to track and quantify:

• Integrity of our decisions and actions
• Relationships with our customers
• Excellence of our people and their ability to fulfill our promises to our agents and policyholders.

Daily, people at every level of the company make choices in their jobs that reinforce these values. Whether their job is in underwriting, information technology, claims, agency services, maintenance, or dozens of other jobs, they are part of a team that directs their time, energies, and knowledge toward being their best. These values provide a clear basis for the culture of our company and a solid foundation on which to build.

I started by stating that 2006 was a "validation year" for the Central team. Our 2006 results have validated our strategy - that our models are sound, and our objectives and goals were worth measuring. Most important, our results provide the confidence in continuing to value those things that are worth more than dollars and cents, percentages, or comparative data.

I seriously doubt that I will ever have an opportunity to introduce an Annual Report with finer results than those contained in this report. The men and women of this company have achieved financial results in 2006 that surpass any yearly results in our 130 year history. You have them to thank for the financial stability of this company.

I have you to thank for your confidence and support.

Since 1876…

F. W. Purmort
Chairman of the Board and President