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2010 American Family Annual Report

Consolidated Highlights(Dollars in thousands except life insurance in force)

The Consolidated Highlights provide an at-a-glance summary of American Family's performance during the past several years. It shows trends in assets, equity, and revenue growth.

2010 2009 2008 2007 2006
Assets (in thousands) $16,787,779 $16,250,813 $15,501,845 $16,003,955 $15,477,009
Equity (in thousands) $5,431,728 $4,826,146 $4,162,986 $5,034,285 $4,889,281
Revenue (in thousands) $6,321,474 $6,360,130 $6,742,578 $6,867,863 $6,785,819
Life insurance in force $86.5 billion $85.4 billion $84.0 billion $81.2 billion $75.9 billion
Field force 3,498 3,822 3,901 3,978 3,975
Employees 7,801 7,745 8,071 8,482 8,237

The American Family Insurance Group consists of the following ten companies with more than $16.8 billion in total assets:

  • American Family Mutual Insurance Company
  • American Standard Insurance Company of Wisconsin (ASIC)
  • American Family Life Insurance Company (AFLIC)
  • American Family Brokerage, Inc.
  • American Family Financial Services, Inc. (AFFS)
  • American Family Insurance Company
  • American Standard Insurance Company of Ohio (ASICO)
  • AmFam, Inc.
  • American Family Securities, LLC
  • New Ventures, LLC

Consolidated Balance Sheet GAAP basis
As of December 31, 2010 (in thousands)

Our Consolidated Balance Sheet lists company assets, liabilities and equity for all American Family companies, referred to as The American Family Insurance Group.

Assets 2010 2009
Total Assets $16,787,779 $16,250,813
Bonds $10,519,550 $9,909,381
Stocks 1,919,457 1,653,156
Real estate 255,944 262,114
Mortgages 334,410 352,432
Other invested assets 253,265 255,556
Short-term investments 19,465 635
Cash and cash equivalents 238,897 353,349
Premiums receivable 993,754 1,027,000
Investment income receivable 115,837 118,288
Deferred policy-acquisition costs 827,574 868,470
Policy loans 236,247 229,781
Reinsurance recoverable 237,219 185,822
Income tax recoverable 0 69,298
Furniture and equipment 66,030 68,524
Computer equipment 105,308 92,850
Deferred tax assets 278,880 415,873
Other assets 116,048 147,199
Separate account assets 269,894 241,085
Liabilities 2010 2009
Total liabilities 11,356,051 11,424,667
P/C loss and loss adjustment reserves $3,688,612 $3,966,063
Life reserves and deposit contracts 3,625,766 3,461,330
Unearned premium reserves 2,154,419 2,166,744
Loss drafts payable 139,543 156,192
Dividends payable 21,454 22,965
Income taxes payable 13,385 0
Agent-termination benefits 552,846 600,861
Expenses payable 559,417 542,637
Other liabilities 330,715 266,790
Separate account liabilities 269,894 241,085
Equity 2010 2009
Total equity 5,431,728 4,826,146
Accumulated other comprehensive income $507,201 $388,679
Retained earnings 4,924,527 4,437,467
Totals 2010 2009
Total Liabilities and Equity $16,787,779 $16,250,813

Consolidated Statement of Income and Equity GAAP basis
for the years ended Dec. 31 (in thousands)

Revenues 2010 2009
Total Revenues $6,321,474 $6,360,130
P/C premiums earned $5,378,823 $5,456,182
AFLIC premiums earned 326,782 320,175
Net investment income 565,632 531,459
Other revenues 50,237 48,933
Losses and Expenses 2010 2009
Total Losses and Expenses 5,831,272 6,162,199
Gain (loss) from Operations 490,202 197,931
Realized capital gains (losses) 170,366 93,279
Income (loss) before Taxes 660,568 291,210
Tax expense (benefit) 173,508 34,273
Net Income (loss) $487,060 $256,937
P/C losses incurred $3,270,457 $3,592,968
P/C expenses incurred 2,100,062 2,109,168
Life insurance benefits incurred 286,518 285,008
Other expenses 174,235 174,954
Statement of Equity 2010 2009
Other comprehensive income (loss) 118,522 406,223
Change in Equity 605,582 663,160
Ending Equity $5,431,728 $4,826,146
Beginning equity balance $4,826,146 $4,162,986
Net income (loss) 487,060 256,937
Change in unrealized gains (losses)    
Bonds (73,158) 424,729
Stocks 188,522 263,941
Tax impact of unrealized gains (41,456) (249,064)
Other changes in equity, net of tax 44,614 (33,383)

Premiums Written For the year ended Dec. 31, 2010 (in thousands)
All dollar amounts have been rounded to the nearest thousand.

American Family Mutual Insurance Company 89%, American Standard Copmany of Wisconsin 5%, American Family Life Insurance Company 6%
Premiums Written
American Family Mutual Insurance Company $5,026,117* 89%
American Standard Insurance Company of Wisconsin 298,173** 5%
American Family Life Insurance Company $330,854 6%
American Family Life Insurance Company
Total insurance in force $86.5 Billion
New business issued $8.1 Billion

* Before reinsurance assumed from ASIC and ASICO. Includes AFIC.

** Includes ASICO.

BEHIND THE NUMBERS

As a mutual company, American Family exists for one purpose: to support our customers when they need us most. To do that, we must be financially strong and stable.

When you scan our 2010 results in the financials section of this report, you'll see some positive numbers for things like assets, equity and revenue. And while that's a very large part of what makes American Family strong, it's just that – one part of a larger picture.

For those of you who have filed a claim, had a question about a bill or visited your agent's office, you know that it's the people who make a difference at American Family. As chief financial officer, it is my responsibility to oversee the financial team that works together to ensure our strength and stability for decades to come. And while you may not ever speak to me, our investment analysts, accountants or actuaries, we are as dedicated to serving you as our agents and claim adjusters.

We are constantly looking for opportunities to drive efficiency and keep expenses in check. After all, that's what you expect when you pay your insurance bill. We also maintain a well-diversified portfolio of investments as a means of strengthening our capacity to serve our customers.

American Family has had a system of financial checks and balances in place for many years, ensuring that the right hand always knows what the left hand is doing. To us, that just makes sense.

Rest assured, the financial team at American Family will continue to address those never-ending opportunities and challenges, with the shared goal of better serving you, our customers.

The bottom line goes much deeper than a number on a balance sheet. Thousands of American Family customers find out every year the value of doing business with a company that not only is wholeheartedly dedicated to customer service, but also has the financial strength to help you recover in your time of need.

Daniel R. Schultz
Chief Financial Officer, Treasurer