Insurer: Earnings up five% in 2013

American Family members Insurance saw its net income rise 5.1 percent in 2013, regardless of having to pay out much more for vehicle wrecks and weathering a uncommon November tornado in central Illinois that made 6 instances the anticipated harm claims for that month.

The Madison-based mostly insurer of autos, residences, wellness, farms and organizations in 19 largely Midwestern states also additional $ million to its policyholder equity, continuing regular recovery in that important fund, which saw a sharp drop for the duration of the 2008 monetary crisis. Described as an additional layer of safety for policyholders, the equity fund has grown by a lot more than $ 2 billion given that then to attain a record $ 6.58 billion in 2013, in accordance to an annual report launched by the company Tuesday.

American Family members chairman and CEO Jack Salzwedel in a statement cited that developing financial power for enabling the business to make new investments whilst nonetheless protecting and serving clients. The company has acquired 3 outside insurers because December 2012 that — whilst getting a lot smaller than American Loved ones — allow consumers acquire products right, on the Internet or by cellphone, rather than by way of American Family’;s 3,500 independent contractor agents.

Net revenue in 2013 was $ 378.8 million, up % from $ 360.5 million in 2012, which saw a 22 percent enhance. A big reduction in 2011, by contrast, was induced by a record $ one.2 billion in claims from Midwestern wind and hail storms that were heavy all through that yr.

Catastrophe losses in 2013 were $ 804.8 million, in contrast with $ 840.6 million in house/casualty claims in 2012. Virtually a third of the damage claims came in August, when serious hail storms hit Colorado, the Dakotas, Minnesota and Wisconsin. June was one more undesirable month, with wildfires in Colorado creating about $ 40 million in claim payments.

The last blow was in November, when a tornado leveled parts of central Illinois and triggered declare payments of $ 54.5 million, 6 occasions what the firm budgeted for that usually quiet month.

Storm damage claims and greater-than-anticipated liability declare payments on car insurance coverage contributed to an underwriting loss of $ 97.4 million in 2013 for American Household. But that was lower than the $ 177.2 million underwriting reduction it posted in 2012, due in element to greater-than-expected outcomes in the company’;s residence and industrial-ranch insurance lines.

Sturdy investment returns, working results and right after-tax capital gains also contributed to the company’;s overall net revenue achieve, according to the yearly report, even though premium income hit $ 6.3 billion.

Business assets final yr totaled $ 19.5 billion, up 8.6 percent from $ 17.9 billion. Lifestyle insurance coverage in force rose to $ 89.6 billion, from $ 88.3 billion in 2012.

American Family finished 2013 with a mixed ratio of 101.6 for its core enterprise of home and casualty insurance coverage. That implies it paid virtually $ 1.02 in claims and expenditures in 2013 for every dollar of earned premium. In 2012, it paid out $ 1.03.

The company has about 7,500 staff and is the nation’;s third-largest mutual property/casualty insurance firm, ranking 393 on the Fortune 500.

Last year, American Family posted its third acquisition with the obtain on Dec. 31 of direct property insurer Homesite Group, Inc., based in Boston and using 700 folks. Its working benefits will be incorporated in American Family’;s yearly report starting in 2014.

This year’;s report did for the 1st time contain operating results from the company’;s initial 2 acquisitions — Permanent Common Holdings Corp., identified as The Standard, and AssureStart, a direct tiny enterprise insurance distributor formed last November.

The Basic is a direct non-standard car insurance coverage company primarily based in Nashville. It was bought by American Loved ones in December 2012 and employs 800 people. It operates in 29 states, promoting policies more than the World wide web and through contact centers.

Seattle-based AssureStart is a begin-up business with 25 workers in 4 states. It sells industrial insurance coverage policies by means of the Net and contact centers, with a focus on minimal-risk, modest organizations.

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