Even confirmed bachelors can get insured through American Family Mutual Insurance. The company and its subsidiaries specialize in personal and commercial property/casualty insurance. Its coverage products include auto, homeowners, farm and ranch, and commercial liability. Its subsidiaries also offer life insurance and annuities and health plans. The company operates in 19 states, primarily in the midwestern and western US. It is among the largest US property/casualty mutual insurance companies. Policies are underwritten by American Family Mutual and its American Standard Insurance and American Family Life Insurance Company (AFLIC) subsidiaries; together they operate as the American Family Insurance Group.
The company's health insurance products include HSA (health savings account), Medicare supplement, and short-term medical care plans, all of which are marketed through an affiliation with Assurant Health reached in 2011. American Family had previously partnered with American Enterprise Mutual for health coverage; it phased out its own line of individual health products in 2009. Term, universal, and whole life policies, as well as fixed annuities, are written directly through the AFLIC subsidiary.
Sales and Marketing
American Family sells its insurance products through a network of some 3,500 independent agents. Its largest markets are located in the states of Colorado, Illinois, Minnesota, Missouri, and Wisconsin. The company strives to maintain strong relationships with its brokers to better serve its policyholders.
Unlike many of its competitors, American Family has said it has no plans to demutualize and has steadily grown its equity and assets. However, the company has experienced several years of unprecedented underwriting losses due to storm coverage. Another year of record claims losses in 2011 (including $1.2 billion in storm and catastrophe losses), coupled with lower premium levels from property/casualty policies, spurred a 3% revenue drop to some $6.15 billion in 2011; net income also fell 40% to $295 million that year.
As a result of its troubles, the company chose to consolidate its claims offices from 20 locations to just six primary offices in key markets in 2011. Other restructuring measures included a change in how the company reinsures its policies to protect from catastrophe-related losses.
American Family announced additional restructuring programs in 2012, including staff reductions (primarily in its information services department), to address expense issues that the company primarily attributed to economic conditions. Overall, the company has cut expenses by reducing its workforce by about 10% between 2008 and 2012.
Then, in the second half of 2012, American Family began to explore growth opportunities.
Mergers and Acquisitions
To expand its non-standard auto insurance offerings, the company acquired PGC Holdings Corp. and its subsidiaries, including Permanent General and The General, for some $239 million in December 2012. Permanent General is a strong company in a profitable market segment, and it continues to operate as an independent subsidiary from its headquarters in Nashville.