Page 2 - Frankenmuth Insurance 2023 Annual Report

Resilient in Challenging Conditions

In the face of another year of extraordinary weather-driven Amid a very busy claim year, our company continued
catastrophic events, Frankenmuth Insurance persevered to look toward the future, investing in automation and
and maintained its financial strength and stability. technology to broaden and expand product and service
offerings, while lowering costs through increased
Last year, the Midwest was hit with multiple severe operational efficiencies.
storms, resulting in record-setting losses, exacerbated by
elevated repair costs and lingering 40-year-high inflation. With an ongoing commitment to progress and
After setting an all-time high of $43 million in catastrophe innovation, we plan to launch our new Personal Lines
events in 2022 for the company, 2023 brought a new and small commercial platforms in 2024. Both are
high of $114 million, including our largest single event — designed to enhance the ease of doing business for our
a mid-Michigan hailstorm, totaling $34 million. independent agency partners and support profitable
growth.
Despite an abnormally high combined ratio, which
included more than 12.5 points from weather events and Frankenmuth Insurance continues to embrace
$89 million in underwriting losses, our Policyholders’ a stewardship mindset, supporting charitable
Contingency Reserve Fund was essentially unchanged, organizations, providing scholarships to college students
declining only 0.6%, ending at $795 million. Investment pursuing a career in insurance, and contributing to
income increased in 2023, due to the impact of rising endowment funds at colleges and universities offering
interest rates flowing into the fixed-income portfolio and risk and insurance management programs. In 2023, we
equity markets that improved over 2022. contributed to two new educational endowment funds
with Eastern Kentucky University and Georgia State
Our resilience reflects an unwavering commitment to University, bringing our total to five such supported
disciplined underwriting and pricing, along with prudent programs. Total charitable contributions and civic giving
investing that produces stability and consistency, even in exceeded $600,000 in 2023.
uncertain times and challenging conditions. Frankenmuth
Insurance remains financially strong and secure, As we look to 2024, we are grateful to our dedicated
supported by our AM Best Financial Strength Rating of A employees and loyal, independent agency partners who
(Excellent), while continually providing peace of mind and are ultimately responsible for our progress and success.
assurance to policyholders. And to you, our valued policyholders, thank you for your
confidence and trust in Frankenmuth Insurance.
Premium growth, supported by increased policyholder
retention, contributed to reaching a new direct written
premium milestone exceeding $1 billion. Commercial
Lines premium volume, including the Surety operation,
also reached a new threshold, eclipsing $700 million.
In addition, Personal Lines ended the year with more
than 250,000 policyholders, and our subsidiary Patriot
Life Insurance Company now insures more than 9,000
policyholders who are protected against financial loss.
We continue to receive high marks in surveys of
policyholders who have experienced a claim. Traditional
claim customer satisfaction was very strong at 96%,
and our Net Promoter Score of 89 far exceeds the
industry benchmark of 69. This is a remarkable result,
considering the unprecedented number of catastrophic
claims in 2023. Combined, these results indicate that
our customers are very happy with our claim service and
are highly likely to recommend Frankenmuth Insurance to
others. Satisfaction survey results from our independent
agency partners were also very favorable, with 89% of our Frederick A. Edmond, Jr., CPCU
agents being satisfied with our service. CEO