Policyholders approve American Family’s plan for organizational structure change
Mutual holding company conversion helps continue American Family’s commitment to its customers
Plan preserves policyholder ownership and provides American Family additional flexibility to pursue future customer-driven opportunities.
Policyholders of American Family Mutual Insurance Company (AFMIC) have voted to approve the company’s plan to convert its corporate structure to a mutual holding company. The conversion was approved today at American Family’s headquarters in Madison, where it received 84.5 percent support from votes cast by proxy or in person, surpassing the required 75 percent. The votes will be certified later this week.
The conversion to a mutual holding company, previously approved by the Wisconsin Office of the Commissioner of Insurance and American Family’s board of directors, will become effective upon issuance of a certificate of authority by the Wisconsin Office of the Commissioner, which is expected on or shortly after Jan. 1, 2017.
Under the new structure, American Family Insurance Mutual Holding Company will become the group’s new parent company, with AFMIC becoming a stock subsidiary company wholly owned by the mutual holding company.
“Today’s approval confirms our policyholders’ trust in us to be their reliable insurance partner – and for that American Family is extremely grateful,” said Jack Salzwedel, American Family chairman, CEO and president. “As a company, we remain deeply focused on building that trust in everything that we do, through exceptional service, products and a constant pursuit of innovation that fulfills customer needs for protection and value.”
“The approval of our mutual holding company plan is important for the future of American Family,” says Dave Holman, American Family chief strategy officer. “Not only does it preserve our legacy as a company owned by our policyholders, it also gives us the additional flexibility needed to quickly and smartly adapt to ever-changing customer needs and marketplace.”
Conversion provides flexibility
Today’s approval will provide American Family the additional flexibility it needs to pursue future customer-driven opportunities. These include investing in and/or acquiring non-insurance companies that specialize in products and services that proactively protect customers from accidents and injuries, such as smart-home technology and distracted-driving prevention. The conversion also better positions American Family to acquire other mutual insurance companies.
Preserving policyholder ownership
A mutual holding company also retains American Family’s nearly 90-year history as a company owned by its policyholders. Policyholders of AFMIC will have the same membership rights they have now, while membership rights will also be extended to policyholders of certain other subsidiaries who underwrite property-casualty products sold by American Family agents.
While a mutual holding company structure would allow American Family to consider the sale of stock to raise capital, it has no plans do so. Any initial sale of voting stock would require prior approval of the mutual holding company board and members, and the Wisconsin Office of the Commissioner of Insurance.
Coverage, premium rates and claims handling under existing American Family insurance policies are unaffected by the change to a mutual holding company. Company and agent operations are also unaffected.
Nearly 210,000 AFMIC policyholders voted on the conversion plan, for a response rate of approximately 6 percent. That response rate is consistent with proxy votes of other financial services companies, according to AST Fund Solutions, a firm that specializes in conducting and tabulating proxy votes and assisted American Family in its effort.
Policyholders with questions about the plan can call 1-800-MYAMFAM (1-800-692-6326).
About American Family Insurance
Madison, Wis. - based American Family Insurance is the nation's 13th-largest property/casualty insurance group and ranks 332nd on the Fortune 500 list. The company sells American Family-brand products, including auto, homeowners, life, business and farm/ranch insurance, through its exclusive agents in 19 states. American Family affiliates (The General, Homesite and AssureStart) also provide options for consumers who want to manage their insurance matters directly over the Internet or by phone. Web www.amfam.com; Facebook www.facebook.com/amfam; Twitter www.twitter.com/amfam; Google+ plus.google.com/+amfam/.