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The American Family Insurance group (AmFam) of companies has capitalized on its recent merger with Florida-based mutual insurance company Main Street America, adding $995 million to policyholder equity in 2018 and raising the group’s total equity to $9 billion.
The merger has expanded AmFam’s national reach, product offerings and distribution channels, enabling the P&C insurance firm to feel “the effects of being a true national enterprise” – effects that were reflected in the company’s 2018 financial results.
In 2018, AmFam achieved a net income of $295.2 million, an increase from $155.6 million in 2017. The firm ended 2018 with 11.2 million policies in force, a 12-month increase of 6.6%, with 620,000 of those new policies coming from Main Street America. In total, group revenue increased from $9.5 billion in 2017 to $10.3 billion in 2018.
“In 2018, we felt the effects of being a true national enterprise,” commented chair and chief executive officer Jack Salzwedel. “The group continued strong growth as customers placed their trust in American Family agents, our direct-channel affiliates expanded, and we welcomed policyholders and a new distribution channel through our merger with Main Street America.
“We collaborated across our companies to develop our people and create technology, resulting in stronger customer service and efficiency. And, we helped customers recover from tragic and historic disasters, while partnering with non-profits to meet community needs.”
Like most major P&C firms, AmFam was not immune to drops in the financial markets in 2018. The group experienced realized and unrealized losses of more than $500 million, and its insurance operations were negatively impacted by storm losses and the challenging auto insurance environment.
The group suffered $1.4 billion in storm losses for 2018, a $91 million decrease from its record storm loss high in 2017. Significant events included the November wildfires in California which resulted in $175 million in incurred losses, and mid-June hailstorms that struck metro Denver, resulting in $171 million in incurred losses.
For all P&C insurance lines, the group reported a net underwriting loss of $355 million in 2018, an improvement from the net underwriting loss of $553 million in 2017. These losses can be primarily attributed to auto and commercial lines. The group reported a combined ratio of 104%, down from 107% in 2017.
