American Family Insurance group reports 2023 financial results

American Family Insurance group reported its financial results for 2023, continuing to deliver on its promise to customers while delivering strong results in premium growth, policy retention and customer satisfaction.

American Family Insurance helped its customers through multiple severe weather events including winter storms, tornadoes and damaging hail and wind across numerous states. Together, these events resulted in record-high catastrophe claims of $3.5 billion, up from $2.8 billion in 2022.

“2023 was a very tough weather year for our customers, across several states,” said Chair and CEO Bill Westrate. “Our claims teams and agency owners demonstrated great dedication and commitment to our mission by responding with speed and care in fulfilling our promise to customers.”  

Inflationary pressures contribute to increased claim costs

A record number of claims, combined with continuing market pressures including inflation and higher costs for labor, replacement vehicles, auto parts and building materials, increased claims costs.

American Family Insurance reported a combined ratio of 110.8% for all property-casualty lines – auto, homeowners and commercial – slightly improved from 111.4% in 2022. This means nearly $1.11 is expected to be paid out in claims and expenses for every dollar earned in premium.

A net underwriting loss of $1.7 billion in property-casualty lines in 2023 was reported, compared to an underwriting loss of $1.5 billion in 2022.

While higher claim loss costs impacted the combined ratio, disciplined expense management, including streamlining processes and capabilities across all operating companies, helped offset claim cost increases and lowered the expense ratio, improving the value delivered to customers.

“We’re controlling what’s most directly in our control,” said Westrate. “We can’t control the weather. We can’t control broad-based inflation in used vehicles, parts, construction materials and repairs. But we can control how we respond, and we have – through actions we’re taking to restore profitability, manage expenses and serve and support our customers.”

Customer satisfaction, retention remain near historically high levels; policy growth continues

Policy retention and growth held strong, with 14 million policies in force at year-end, up 3.8% from 2022. Direct premium written increased to $17.3 billion, an 18.0% increase from the previous year. New business production for the group grew by 8.9% in 2023. Customer satisfaction and retention remained near historically high levels.

“Our customer satisfaction and retention numbers are a reflection of our customers’ trust and confidence in the products and service we provide,” said Westrate. “We know our customers depend on us, and employees and agency owners demonstrate every day they’re dedicated to living our vision – to be the most trusted and valued customer-driven insurance company.”

Revenue increased to $17.1 billion in 2023 from $14.4 billion in 2022, driven by growth in premium earned and investment income. Group assets rose to $38.0 billion from $36.1 billion in 2022.

Life insurance produces record operating gain

Life insurance policies in force continued to grow, with new policy growth reaching its highest level since 2017. American Family Life Insurance Company reported a record gain from operations of $150 million, contributing to overall performance.

Members’ equity remains strong

Members’ equity declined to $8.0 billion at the end of 2023, down from $8.2 billion in 2022, with the underwriting loss largely offset by investment income and increased values of bonds and stocks. American Family Insurance continues to take care of customers and invest in innovations that support industry-leading customer service and value.

“We remain financially strong,” said Troy Van Beek, American Family Insurance group chief financial officer and treasurer. “As an organization, we remain focused on providing great value to our customers, which includes being there for them in their greatest times of need.”

Added Van Beek: “Last year, we continued to take steps to sustainably improve performance, and we have a lot of positive momentum moving into 2024, and beyond.”

American Family Insurance group and its employees continue to invest in communities they serve

Supporting the communities where employees live, work and do business is an important component of delivering value to customers.

Throughout 2023, American Family Insurance group continued to support customers through its insurance products and by investing in and partnering with organizations and businesses across the country to champion dreams and opportunities so everyone can rise.

This includes the third year of its five-year Free to Dream commitment, and the continued community support of the American Family Insurance Dreams Foundation. 

Beyond these corporate investments, employees and agency owners also had a powerful impact in 2023, contributing more than $10 million in charitable contributions and more than 95,000 hours of volunteer service.

For more, see the 2023 annual report on amfam.com. 

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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 12th-largest property/casualty insurance group, ranking No. 301 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 CONNECT, powered by American Family Insurance, The General, Homesite and Main Street America Insurance. Across these companies, the group has nearly 13,000 employees nationwide.