American Family Insurance Group Achieves Strong, Balanced Results in 2016

MADISON, Wis., March 7 -- American Family Insurance issued the following news release:

The American Family Insurance group of companies reported strong, well-balanced results in 2016, featuring solid increases in policyholder equity, premium growth across its operating companies and investment gains. The Madison, Wis.-based insurance group ended the year with more than 10.2 million policies in force, protected by policyholder equity of $7.8 billion.

"Heading into 2016, our goal was to build upon the success we achieved in 2015. I'm proud to say we accomplished that for our customers," said Jack Salzwedel, chairman and chief executive officer of American Family. "We saw exceptional growth in group written premium, supported by a $397 million increase in policyholder equity for the second year in a row. These results strengthen our position to protect our policyholders while pursuing innovations that will benefit them in the future."

American Family announced 2016's results today at the company's annual meeting. The results also detail year-end information on the group's operating companies, which include:

* The American Family brand companies, which offer multiline insurance products through the company's agents.

* Homesite, a direct homeowners insurance company based in Boston.

* The General, based in Nashville, a direct non-standard auto insurance provider.

Policyholder equity continues to increase

An important measure of American Family's ability to help customers recover following a catastrophe or unplanned loss is policyholder equity. Similar to 2015, policyholder equity increased by $397 million, to end at $7.8 billion at the close of 2016.

"In 2015, underwriting income contributed the most to the increase in policyholder equity, while investment gains and moderate storm losses were the main drivers in 2016," said Dan Kelly, American Family chief financial officer. "Due to this continued increase in policyholder equity, we're in a strong position to help our customers recover from unforeseen events while investing in strategies that create value for them and produces greater opportunities for agents and employees."

The American Family group incurred $879 million in storm claims compared to $730 million in 2015. The three largest 2016 catastrophe responses, measured by claim losses to date, were:

* A July hail storm in Colorado Springs, Colorado, $58 million.

* A May hail and wind storm in metropolitan St. Louis, $34 million.

* A September hail and wind storm in Madison and surrounding area, $21 million.

For all property-casualty (P&C) insurance lines, the group reported a 2016 net underwriting loss of $56 million, which compares to an underwriting gain of $327 million in 2015. The group reported a P&C combined ratio of 100.7, which means the group incurred nearly $1.01 in claims and expenses for every dollar earned in premium.

Additional 2016 results for the group included:

* Net income for the year ended at $325.6 million, a decrease from $693.9 million in 2015, with most of the difference attributable to P&C underwriting performance. Net income includes underwriting/operating results, investment income, realized gains (and losses) and taxes.

* Direct premium written for the group increased 8 percent, reaching $8.3 billion.

* Group assets rose to $22.7 billion, an increase of $1.2 billion from 2015, while group revenue increased to $8.7 billion from $8.1 billion.

* The American Family Life Insurance Company's policies in force increased from 816,000 in 2015 to 831,000 in 2016.

"Our customers trust us, and we must honor their trust with a long-term commitment to financial strength," said Kelly. "As we continue to grow, we can invest in opportunities that drive profitable growth, which helps ensure we're there for our customers."

Moving forward

Last year was an historic one for American Family on multiple fronts. Bolstered by sales of new products sold by its American Family agents and increased success of its direct-channel subsidiaries, the group passed the 10 million policy count - a number that continues to grow at the start of 2017. Customer satisfaction reached an all-time high, leading to increased customer retention.

Policyholders also approved the group's conversion to a mutual holding company, allowing it to preserve its legacy as a company owned by its policyholders while providing additional flexibility to pursue customer-driven investments.

In October 2017, American Family will commemorate a major milestone when it celebrates its 90th anniversary.

"Our success in 2016 has created a foundation for continued growth and innovation in 2017 and beyond," said Salzwedel. "We will maintain an unwavering focus on our policyholders through strategic investments in cutting-edge solutions and fulfilling our promise of protection when they need us."

About American Family Insurance

Madison, Wis. - based American Family Insurance, celebrating its 90th anniversary in Oct. 2017, is the nation's 13th-largest property/casualty insurance group and ranks No. 332 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/.

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