American Family Insurance posted a net underwriting loss of $1.7 billion for property/casualty business in 2023, up from 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.

The overall combined ratio came in at 110.8 for all property/casualty lines—auto, homeowners and commercial—0.6 points better than 111.4 in 2022.

“We’re controlling what’s most directly in our control,” said Chair and CEO Bill Westrate in a media statement. “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,” he said.

According to the statement, the company incurred record-high catastrophe claims of $3.5 billion, up from $2.8 billion in 2022—helping customers through multiple severe weather events including winter storms, tornadoes and damaging hail and wind across numerous states.

On the top line, the carrier reported that direct premium written jumped 18 percent to $17.3 billion, with new business production up 8.9 percent. At year-end 2023, American Family had 14 million policies in force, up 3.8 percent from 2022.

Revenues, including life earned premiums of nearly $400 million (up 2.4 percent) and net investment income of $930.4 million (more than double the amount of investment income in 2022), totaled $17.1 billion in 2023.

For the year, 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.

“We remain financially strong,” said Troy Van Beek, American Family Insurance group chief financial officer and treasurer. “Last year, we continued to take steps to sustainably improve performance, and we have a lot of positive momentum moving into 2024, and beyond,” he added in a media statement.

Source: American Family Insurance Group