2023 Annual Report

Last year, the Midwest was hit with multiple severe storms, resulting in record-setting losses, exacerbated by elevated repair costs and lingering 40-year-high inflation. After setting an all-time high of $43 million in catastrophe events in 2022 for the company, 2023 brought a new high of $114 million, including our largest single event — a mid-Michigan hailstorm, totaling $34 million.

Despite an abnormally high combined ratio, which included more than 12.5 points from weather events and $89 million in underwriting losses, our Policyholders’ Contingency Reserve Fund was essentially unchanged, declining only 0.6%, ending at $795 million. Investment income increased in 2023, due to the impact of rising interest rates flowing into the fixed-income portfolio and equity markets that improved over 2022.

Our resilience reflects an unwavering commitment to disciplined underwriting and pricing, along with prudent investing that produces stability and consistency, even in uncertain times and challenging conditions. Frankenmuth Insurance remains financially strong and secure, supported by our AM Best Financial Strength Rating of A (Excellent), while continually providing peace of mind and assurance to policyholders.

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 agents being satisfied with our service.

Amid a very busy claim year, our company continued to look toward the future, investing in automation and technology to broaden and expand product and service offerings, while lowering costs through increased operational efficiencies.

With an ongoing commitment to progress and innovation, we plan to launch our new Personal Lines and small commercial platforms in 2024. Both are designed to enhance the ease of doing business for our independent agency partners and support profitable growth.

Frankenmuth Insurance continues to embrace a stewardship mindset, supporting charitable organizations, providing scholarships to college students pursuing a career in insurance, and contributing to endowment funds at colleges and universities offering risk and insurance management programs. In 2023, we contributed to two new educational endowment funds with Eastern Kentucky University and Georgia State University, bringing our total to five such supported programs. Total charitable contributions and civic giving exceeded $600,000 in 2023.

As we look to 2024, we are grateful to our dedicated employees and loyal, independent agency partners who are ultimately responsible for our progress and success. And to you, our valued policyholders, thank you for your confidence and trust in Frankenmuth Insurance.