Page 2 - Frankenmuth Insurance 2023 Annual Report
P. 2

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
       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
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