Madison,
03
March
2020
|
09:00 PM
America/Chicago

American Family Insurance group strengthened commitment to customers and communities in 2019

Policy and revenue growth up for national, multiline enterprise

Summary

American Family Insurance group today reported its 2019 financial results, including strong results in a number of categories. 

American Family Insurance group today reported 2019 results, including strong performance in the categories of growth, financial strength, and community investment.

“American Family is committed to being a trusted partner for customers and communities,” said Chair and Chief Executive Officer Jack Salzwedel. “That’s our tradition. We want to make it our legacy.”

The American Family Insurance group of companies released its 2019 financial results today at its annual policyholder-member meeting. The annual financial results provide year-end information on the group’s operating companies, which include:

  • American Family Insurance, based in Madison, Wisconsin, which offers multiline insurance products primarily through the company’s exclusive, independent contractor agents in 19 states.
  • Homesite, a national direct property insurance company based in Boston.
  • The General, a national direct non-standard auto insurance provider based in Nashville, Tennessee.
  • Main Street America Group, based in Jacksonville, Florida, which offers multiline insurance products through a national network of independent agents.
  • American Family Connect Property and Casualty Insurance Company, the proposed new legal name of the De Pere, Wisconsin-based insurer (Ameriprise Auto & Home Insurance), which American Family Insurance group acquired last October and sells through partners.

“We’re focused on delivering industry-leading insurance products and services, while being a great employer and corporate citizen that partners with organizations and communities to address social issues,” Salzwedel said. “Consumers expect this, and it’s the right thing to do.”

Enterprise growth continued

The American Family enterprise ended 2019 with 12.4 million policies in force, a 12-month increase of 10.6%, driven by the acquisition of Ameriprise Auto & Home and growth at Homesite. Since 2014, the group has added three million policies. Direct premium written for the entire group increased 16.4% from 2018, reaching $11.2 billion – an increase of $3.9 billion over the past five years.

Group revenue increased to $12.2 billion in 2019 from $10.2 billion in 2018. Group assets rose to $31.1 billion, an increase of $3.6 billion from 2018, and the amount of American Family Life Insurance Company insurance coverage in force increased to $100 billion from $98.9 billion last year.

The group achieved a net income of $456 million, an increase from $295 million in 2018, bolstered by realized capital gains of $467 million. Net income includes underwriting/operating results, investment income, realized gains (and losses) and taxes.

“In 2019, we continued to grow as customers placed their trust in us, and we welcomed policyholders and a new distribution partner through our acquisition of Ameriprise Auto & Home,” Salzwedel said. “We are collaborating across our companies as never before to deliver efficient, top-notch service to all our customers.”

Strong capital markets drive increase in policyholder equity

The American Family Insurance group of companies added $756 million to policyholder equity in 2019, bringing the group’s total equity to $9.8 billion, due in large part to strong performance of the capital markets.

Capital market gains for the enterprise in 2019 were $1.3 billion pre-tax, compared with a loss of $522 million in 2018. These gains were driven by increases in bond values due to decreasing interest rates, and an increase in the value of the enterprise stock portfolio.

Policyholder equity is an important measure of financial strength, ensuring the company has the resources to help customers recover from severe weather and other unforeseen events. The group’s policyholder equity has increased by $2.8 billion since 2014.

“As we’ve added new customers, our increased equity keeps us in a very strong position to protect our policyholders, regardless of the American Family group company they choose for their insurance needs,” said Chief Financial Officer Dan Kelly. “It allows us to be there for customers when they need us and to pursue improvements that benefit them.”

Increased claim losses contribute to underwriting loss

In 2019, we assisted hundreds of thousands of customers who had claims, in part from the harsh cold and wintry weather across multiple states during the first quarter. These claims, plus loss and expense reserve adjustments at recently acquired companies to align with the group’s reserving practices, contributed to the group’s property casualty (P&C) insurance lines net underwriting loss of $614 million in 2019. By comparison, the group had a net underwriting loss of $355 million in 2018.

The group reported a combined ratio of 105.7 for all P&C lines, which means it anticipates paying out $1.06 in claims and expenses for every dollar earned in premium, up from 104.0 in 2018.

Storm losses for the group reached $1.4 billion in 2019, down $39 million from 2018. Three hail and wind storms caused the most damage, the largest occurring in Minnesota in early August, resulting in $171 million in incurred losses, followed by a $106 million storm in the upper Midwest in late May and a $70 million storm in Colorado in early July.

Investing in communities

In 2019, the American Family Insurance Dreams Foundation distributed $9.1 million in grants, scholarships, donation matches and other charitable donations across 47 states. The foundation was established in 2016 and has distributed more than $30 million since its creation.

In addition, the American Family Insurance Championship, a PGA TOUR Champions event hosted by Wisconsin golf legend Steve Stricker, raised a record $2.4 million for charity in 2019. Half of the tournament proceeds were given to American Family Children’s Hospital in Madison, Wisconsin, with the other half awarded to primarily local nonprofit organizations.

American Family elevated its commitment to the city of Milwaukee, purchasing a historic downtown building that will be renovated to become home to the company’s operations in that Wisconsin city. The company also expanded its partnership with the Milwaukee Brewers, acquiring naming rights for its ballpark, to be called American Family Field beginning in 2021, and working together on other community projects.

“Our commitment to communities has never been stronger,” said Salzwedel. “That’s because we know vibrant and healthy communities support a better future for everyone.”

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About the American Family Insurance group
Based in Madison, Wisconsin, American Family Insurance has been serving customers since 1927. We inspire, protect and restore dreams through our insurance products, exceptional service from our agency owners and employees, community investment and creative partnerships to address societal challenges. We act on our belief in diversity and inclusion by constantly evolving to meet customer needs and preferences. American Family Insurance group is the nation’s 13th-largest property/casualty insurance group, ranking No. 306 on the Fortune 500 list. The group sells American Family-brand products, primarily through exclusive agency owners in 19 states. The American Family Insurance group also includes American Family Connect Property and Casualty Insurance Company, the proposed new legal name of Ameriprise Auto & Home, The General, Homesite and Main Street America. Across these companies the group has more than 13,500 employees nationwide.