2016 annual report

WE HELP INSPIRE, PROTECT AND RESTORE YOUR DREAMS

Whether your dream is owning a car, renting a new apartment, growing a family, buying a home or starting a business, it’s important to you — and to us. We’re here to help inspire, protect and restore those dreams as your life evolves.
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Commitment. Responsibility. Gratitude.

They’re at the core of who we are and what we do. See for yourself in these video stories.
Life insurance secures family's future

Customer Sue Graves talks about the loss of her husband when he was 52. He left Sue with six children, a thriving business and the gift of insurance. Proceeds from his life insurance helped Sue save the business and shape her family's future.

Teeing up a career in sustainability

As part of the zero waste initiative at American Family, we extended our sustainability efforts to the American Family Insurance Championship. The goal of the zero waste initiative is to divert 90 percent of waste going to landfills. American Family sustainability interns provided the hands-on leadership throughout the recycling effort at the inaugural PGA Champions Tour event.

THANK YOU, AMERICAN FAMILY CUSTOMERS

Because we couldn’t do what we do every day without valued customers like you, we want to say thank you. Your loyalty, fearless attitude and commitment to your dreams continues to inspire us, and we’re honored to protect what matters most to you.

IN THE WORDS OF OUR CUSTOMERS

Customers share their gratitude for help in protecting and restoring their dreams.

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CARING ABOUT OUR COMMUNITY

Here are some of the ways we help improve the lives of others and our communities.

Community Investment

We believe the most effective and long-lasting community investment combines financial support with employee volunteerism, creativity and expertise, all of which leads to greater accomplishment, collaboration and accountability.

Sustainability

We view the environment as ours to sustain and protect. In environmental sustainability, doing the right thing saves the company resources, which protects our customers’ resources.

Supporting Charities

The inaugural American Family Insurance Championship raised $1 million in proceeds for the Steve Stricker American Family Insurance Foundation and the American Family Children’s Hospital. The foundation supports charities, educational initiatives, and organizations aimed at building strong families and healthy kids, empowering them to chase and achieve their dreams.

INSPIRATION AND INNOVATION TO GROW OUR FUTURE

We’re an insurance company — and much more. We support entrepreneurs, innovation and dream discovery.

Business Accelerator Program

Committed support for your business. Welcome to an online toolbox designed to help you grow your small business dream. With the Business Accelerator Program you’ll discover expert advice, articles, interviews and live-streamed events that empower you along your entrepreneurial journey.

American Family Ventures

By definition, American Family Ventures is a venture capital group, but we like to think of ourselves as catalysts for what’s next. We understand that you want to impact this world. We’re prepared to help.

Inspiring Dreams

We have the tools to help you discover your dream, then pursue your inspiration. Learn more at dreamfearlessly.com and DreamBank — a space in Madison, Wis., where you'll find inspiration, tools and support to bring their dreams to life.

Financials

AMERICAN FAMILY INSURANCE GROUP

CONSOLIDATED HIGHLIGHTS

GAAP basis — As of Dec. 31 (in thousands)

2016
2015
Assets
$22,661,640
$21,463,583
Equity
$7,759,957
$7,362,497
Revenue
$8,725,510
$8,068,067
Life insurance in force
$95,560,192
$93,572,680
Net income
$325,579
$693,920
AMERICAN FAMILY INSURANCE GROUP

CONSOLIDATED BALANCE SHEET

GAAP basis — As of Dec. 31 (in thousands)

Assets
2016
2015
Bonds
$13,349,669
$12,596,913
Stocks
2,423,872
2,138,049
Cash and cash equivalents
739,184
669,123
Other assets
6,148,915
6,059,498
Total assets
$22,661,640
$21,463,583
Liabilities
2016
2015
P/C loss and
loss adjustment reserves
$4,085,485
$3,772,873
Life reserves and
deposit contracts
4,157,412
4,080,261
Unearned premium
reserves
3,451,664
3,178,995
Other liabilities
3,207,122
3,068,957
Total liabilities
$14,901,683
$14,101,086
Equity
2016
2015
Accumulated other
comprehensive income
$446,415
$374,534
Retained earnings
7,313,542
6,987,963
Total equity
$7,759,957
$7,362,497
2016
2015
Total liabilities and equity
$22,661,640
$21,463,583
AMERICAN FAMILY INSURANCE GROUP

CONSOLIDATED STATEMENT OF INCOME

GAAP basis — For the years ended Dec. 31 (in thousands)

Revenues
2016
2015
P/C net premiums earned
$7,601,888
$7,020,172
Life premiums earned
427,510
306,752
Net investment income
520,588
562,410
Other revenues
175,524
178,733
Total revenues
$8,725,510
$8,068,067
Losses and Expenses
2016
2015
P/C losses incurred
$5,207,412
$4,453,707
P/C expenses incurred
2,514,353
2,340,544
Life insurance
benefits incurred
293,023
189,091
Other expenses
377,833
288,588
Total losses and expenses
8,392,621
7,271,930
Gain (loss) from operations
332,889
796,137
Realized capital gains
(losses)
103,295
217,995
Income (loss) before taxes
436,184
1,014,132
Tax expense (benefit)
110,605
320,212
Net income (loss)
$325,579
$693,920
AMERICAN FAMILY INSURANCE GROUP

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

GAAP basis — For the years ended Dec. 31 (in thousands)

Equity
2016
2015
Beginning equity
$7,362,497
$6,965,108
Net income (loss)
325,579
693,920
Unrealized gains (losses)
91,330
(306,229)
Other

(19,449)

9,698
Ending equity
$7,759,957
$7,362,497

About Us

Our Customer Reach

One or more companies of American Family Insurance group operate in 49 states (light blue and dark blue).
American Family agents offer multiline products and trusted advice in 19 states (dark blue).

Our Products

Personal lines, Commercial and Farm/Ranch products are underwritten by American Family Mutual Insurance Company and its subsidiaries, American Standard Insurance Company of Wisconsin, American Standard Insurance Company of Ohio and American Family Insurance Company. Life products are underwritten by American Family Life Insurance Company. We also work with other insurance partners to meet customers’ unique insurance needs. We provide specialty or supplemental commercial, life and personal lines coverage as well as bonds, flood and health insurance, through American Family Brokerage, Inc.

Some products are not available in every state. To learn more about any of these products or services, contact an American Family agent or visit our website.

Personal Lines
Auto1
All-terrain vehicles (ATV)
Boatowners and watercraft
Campers/motor homes
Condominium unit owners2
Custom-value homes
Golf carts
Homeowners2
Miscellaneous vehicles
Mobile/manufactured homeowners
Motorcycles
Personal liability umbrella
Renters2
Snowmobiles
Commercial-Farm/Ranch
Business auto
Businessowners3
Business Key
Contractors Package Program
Commercial general liability
Commercial property
Commercial liability umbrella
Crime and fidelity
Farm/Ranch
Farm/Ranch personal liability umbrella
Inland marine
Nonprofit directors and officers liability
Rental Dwelling Protection Program
Workers compensation
Life
Term life
Universal life
Whole life

1 Auto insurance products are also underwritten by The General® group of insurance companies.

2 Homeowners, renters and condominium insurance are also underwritten by the Homesite group of insurance companies.

3 Businessowners policies are also issued by Midvale Indemnity Company and distributed and serviced by Homesite.

Our Companies

The American Family Insurance group, with more than $20 billion in total assets, consists of the following companies:

American Family Mutual Insurance Company, S.I.

American Standard Insurance Company of Wisconsin

American Family Life Insurance Company

American Family Brokerage, Inc.

American Family Financial Services, Inc.

American Family Insurance Company

American Standard Insurance Company of Ohio

AmFam, Inc.

The AssureStart Insurance Agency, LLC (AssureStart)

Homesite Group Incorporated and its subsidiaries (Homesite)

Midvale Indemnity Company

Midvale Life Insurance Company of New York

New Ventures, LLC

PGC Holdings Corp. and its subsidiaries (The General®)

Leadership

Jack Salzwedel
Chairman, Chief Executive Officer and President

Fabian Fondriest
Chief Executive Officer and President, Homesite,
and Chief Operating Officer, American Family Direct

John Hollar
President and Chief Operating Officer The General®

David Holman
Chief Strategy Officer and Secretary

Daniel Kelly
Chief Financial Officer and Treasurer

Kristin Kirkconnell
Chief Information Officer

Jessie Stauffacher
Chief Administration Officer

William Westrate
Chief Operating Officer American Family Agency

Mark Afable
Chief Legal Officer

Gerry Benusa
Chief Sales Officer

Mary Schmoeger
President, Personal Lines

Todd Fancher
President, Life

David Graham
Chief Investment Officer

Peter Gunder
Chief Business Development Officer

Chris Listau
President, Commercial-Farm/Ranch  

Our Board of Directors

Jack Salzwedel
Chairman, Chief Executive Officer and President
American Family Mutual Insurance Company, S.I.

Kathleen Barclay
Senior Vice President Human Resources - retired
The Kroger Company

Christine Cumming
First Vice President and Chief Operating Officer — retired
Federal Reserve Bank of New York

Londa Dewey
President
QTI Group

Jason Goldberger
Former Chief Digital Officer, Target Corporation, former President, target.com

Leslie Ann Howard
Senior Advisor to the CEO of United Way Worldwide

Ted Kellner, CFA
Chairman and Chief Executive Officer
Fiduciary Management, Inc.

Rakesh Khurana
Dean
Harvard College

Michael Knetter, Ph.D.
President and Chief Executive Officer
University of Wisconsin Foundation

R. Scott Malmgren
Senior Partner - retired
Deloitte & Touche, Chicago

Walter Oliver
Senior Vice President Human Resources and Administration — retired
General Dynamics Corporation

Eliot Protsch
President
Wapsie Investment & Advisory, LLC

Paul Shain
Chief Executive Officer
Singlewire Software, LLC

Thomas Zimbrick
Chief Executive Officer
Zimbrick, Inc.