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A Year in Review                   in excess of $800 million. You can rest assured that
                                                                Frankenmuth Insurance is financially stable, strong, and
                             In a year of incredible challenges   secure to meet our ongoing commitment to policyholders.
                             and uncertainty for the insurance
                             industry, I’m pleased to say       Company-wide, premium growth exceeded plan at 8.7%,
                             Frankenmuth Insurance had a        driven by solid performance across all lines of business.
                             very strong year of performance,
                             delivering on our core purpose of   Commercial Lines, including Surety, grew by 11.8%. New
                             providing you with protection and   agency appointments combined with increased new
                             peace of mind.                     business, policy retention, endorsement activity, and
                                                                premium audits contributed to robust growth throughout
        Like many of you, we faced rising costs due to inflation,   the year.
        product and material shortages, and a volatile equity
        market. All of this, paired with catastrophic weather-  Personal Lines premium growth finished the year
        related losses, resulted in one of the most challenging   ahead of plan, which was driven by improved rates for
        years for the insurance industry. Underscoring our      family accounts. Additionally, our Service Center, which
        year, we experienced our highest year ever for weather-  launched in 2021, has continued expanding to serve
        related catastrophic losses, driven by our largest single   more agencies and their clients across our footprint.
        event of more than $26 million in estimated losses for   The Service Center serves as an extension of our
        our policyholders. Yet, despite these challenges, our   independent agency partners’ teams, handling everything
        combined ratio was 98.3%, which exceeded our plan       from quoting and issuing policies to processing vehicle
        and outperformed the industry. This result serves as a   changes and mortgage company requests.
        testament to our consistent underwriting practices and   With improved Personal Lines rates and our focus on
        the strong relationships we have working together with
        our independent agency partners.                        providing a full range of protection for your home, auto,
                                                                and life, we saw significant improvement in issued Life
        While we look to the future of our company and ways to   insurance policies and premium for the year. Issued
        better serve you, we achieved an important historical   policies were 28% higher, and premium growth exceeded
        milestone by converting to a mutual holding company     plan at 11.6%.
        structure that became effective on January 1, 2023.     For our policyholders who experienced losses last year,
        With the unanimous support of our voting members        our tradition of neighbor helping neighbor rang true
        (policyholders), this change provides significant flexibility   as our dedicated team of employees and independent
        to raise capital for strategic investments, mergers and   agency partners worked together to fulfill our promises
        acquisitions, and unexpected significant events.
                                                                to restore lives and reduce disruption. Customer
        We also continued investing in technology and made      satisfaction remained outstanding as a testament to
        meaningful progress on two key corporate initiatives.   their efforts, with 96% of claims survey respondents
        We were one of the first companies in the industry to   indicating they were satisfied with their experience and
        successfully launch the Insurance Services Office (ISO)   over 89% indicating they are highly likely to recommend
        new commercial auto rating plan with comprehensive      Frankenmuth Insurance to family and friends.
        product offerings, new endorsements, and enhanced
        point-of-sale processing for our independent agency     Reflecting on last year, we are encouraged by the
                                                                results achieved through our disciplined operating
        partners. In our pursuit of enhancing the ease of doing
        business, we also completed the second year of a        practices combined with our strong independent agency
                                                                relationships that have helped continue profitably
        three-year development plan for our Personal Lines
        system transformation. Initial feedback from our agent   growing the company. As we look to the year ahead, we
                                                                are committed to remaining your insurer of choice. You
        focus group has been very positive, and this project is
        on schedule for completion in 2023 and a rollout to     can count on us, and we look forward to serving you.
                                                                Thank you for your continued trust and confidence in
        agencies next year.
                                                                Frankenmuth Insurance.
        Our overall corporate results were driven by strong
        financial performance, which includes direct written
        premium reaching a new milestone, exceeding $900
        million. And despite the challenges mentioned above,    Frederick A. Edmond, Jr.
        our Policyholders’ Contingency Reserve Fund remains     President and CEO
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