2011 AMERICAN FAMILY INSURANCE 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 five years. They show trends in assets, equity and revenue growth.

2011 2010 2009 2008 2007
Assets $17,302,037 $16,787,779 $16,250,813 $15,501,845 $16,003,955
Equity $5,711,151 $5,431,728 $4,826,146 $4,162,986 $5,034,285
Revenue $6,151,237 $6,321,474 $6,360,130 $6,742,578 $6,867,863
Life insurance in force $87.0 billion $86.5 billion $85.4 billion $84.0 billion $81.2 billion
Field force 3,457 3,498 3,822 3,901 3,978
Employees 7,893 7,801 7,745 8,071 8,482

The American Family Insurance Group consists of the following 10 companies with more than $17.3 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, 2011 (in thousands)


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

Assets 2011 2010
Total Assets $17,302,037 $16,787,779
Bonds $10,589,667 $10,519,550
Stocks 1,636,295 1,919,457
Real estate 250,914 255,944
Mortgages 364,486 334,410
Other invested assets 300,860 253,265
Short-term investments 84,476 19,465
Cash and cash equivalents 663,720 238,897
Premiums receivable 974,355 993,754
Investment income receivable 112,612 115,837
Deferred policy-acquisition costs 811,244 827,574
Policy loans 238,727 236,247
Reinsurance recoverable 427,036 237,219
Furniture and equipment 57,737 66,030
Computer equipment 150,011 105,308
Deferred tax asset 254,049 278,880
Other assets 131,620 116,048
Separate account assets 254,228 269,894
Liabilities 2011 2010
Total liabilities 11,590,886 11,356,051
P/C loss and loss-adjustment reserves $3,624,252 $3,688,612
Life reserves and deposit contracts 3,744,837 3,625,766
Unearned premium reserves 2,053,263 2,154,419
Loss drafts payable 135,097 139,543
Dividends payable 19,860 21,454
Income taxes payable 29,027 13,385
Agent-termination benefits 631,389 552,846
Employee Post Retirement Liabilities 443,038 321,887
Expenses payable 251,398 237,530
Other liabilities 404,497 330,715
Separate account liabilities 254,228 269,894
Equity 2011 2010
Total equity 5,711,151 5,431,728
Accumulated other comprehensive income $488,959 $507,201
Retained earnings 5,222,192 4,924,527
Total Liabilities and Equity 2011 2010
  $17,302,037 $16,787,779

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


Revenues 2011 2010
Total Revenues $6,151,237 $6,321,474
P/C net premiums earned $5,271,591 $5,378,823
AFLIC premiums earned 327,285 326,782
Net investment income 511,621 565,632
Other revenues 40,740 50,237
Losses and Expenses 2011 2010
Total Losses and Expenses $6,029,690 5,831,272
Gain (Loss) from Operations 121,547 490,202
Realized capital gains (losses) 248,923 170,366
Income (Loss) before Taxes 370,470 660,568
Tax expense (benefit) 75,247 173,508
Net Income (Loss) $295,223 $487,060
P/C losses incurred $3,380,838 $3,270,457
P/C expenses incurred 2,207,046 2,100,062
Life insurance benefits incurred 293,546 286,518
Other expenses 148,260 174,235
Statement of Equity 2011 2010
Other comprehensive income (loss) (15,800) 118,522
Change in Equity 279,423 605,582
Ending Equity $5,711,151 $5,431,728
Beginning equity balance $5,431,728 $4,826,146
Net income (loss) 295,223 487,060
Change in unrealized gains (losses)    
Bonds 292,469 (73,158)
Stocks (136,273) 188,522
Tax impact of unrealized gains (57,946) (41,456)
Other changes in equity, net of tax (114,050) 44,614

Net Premiums Written For the year ended Dec. 31, 2011
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%
Net Premiums Written
American Family Mutual Insurance Company $4,892,973* 89%
American Standard Insurance Company of Wisconsin 273,221** 5%
American Family Life Insurance Company $331,513 6%
American Family Life Insurance Company
Total insurance in force $87.0 Billion
New business issued $7.2 Billion

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


2011 WAS A YEAR FOR THE RECORD BOOKS

Our hearts go out to the victims of the damaging and deadly tornado in Joplin, Mo., and others who had to rebuild their lives after similar events.

My role as chief financial officer is to provide leadership and coordinate the incredibly talented teams that manage American Family Insurance's finances. That's how we care for our customers – by making sound decisions and by looking for ways to serve them even better.

American Family incurred a record $1.2 billion in storm and catastrophe losses in 2011, which means many of our customers depended on us to help them get back on their feet.

How did we do that, while still adding $277 million to policyholder equity?

For one thing, our investing philosophy serves us well. American Family invests for the long term and takes steps to reduce volatility during market crisis periods. As responsible stewards of our policyholders' money, we closely monitor our investments and maintain a balanced, diversified portfolio.

We've also made a significant commitment to reinsurance programs, which substantially offset the past year's record storm payments. Think of reinsurance as insurance for insurance companies – we work with specialized insurers to help manage the potential for excessive insurance losses.

When you consider our outstanding customer service, highly efficient operations and commitment to new and evolving delivery channels, in addition to our financial strength, there are pretty good reasons to do business with us.

Daniel J. Kelly
Chief Financial Officer