Founded in 1920, Madison Mutual's fine service, competitively low premiums and excellent financial stability have established the Company as a leading provider of personal lines property and casualty insurance in the State of Illinois.

The primary objective of Madison Mutual is to provide low cost premiums and financial stability through efficient and effective underwriting and claims practices. This philosophy provides a continuity of operations and simultaneously lessens the need for significant price fluctuations caused by inflation and the traditional market cycle.

Madison Mutual's financial stability and strength, compared to the Property and Casualty Insurance Industry in general, is demonstrated in the following:

	MMIC	Industry
Assets to Liabilities	3.05	1.45
Surplus to Premiums Written	1.57	1.00
Surplus to Loss Reserves	4.51	0.81
Expense Ratio	20.6%	25.4%

Premiums written in 2006 were $32.7 million. With total assets of $71.4 million and policyholder surplus of $48.0 million, we are well positioned for 2007 and the future.

The Company's products and services are available in most of Illinois through 131 independent agencies. Affiliated with these agencies are 398 qualified licensed producers. Through these representatives, we provide insurance for automobiles, homes, and farms and the related personal effects.

We report our success with pride of accomplishment while being mindful that these opportunities are available through the loyalty and support of our policyholders, representatives and employees.

As we look forward, our objective is to continue to provide quality low cost personal lines insurance. To succeed, we must provide superior claims services, maintain our low operating costs and carefully screen potential policyholders.

We thank our policyholders, agents and employees for their continuing support and contributions to the success of Madison Mutual.

Rick D. Shoger
President