American Family Insurance Underwriting Profit Increase for 2025
American Family Insurance has announced a substantial enhancement in its underwriting profit for 2025, with a remarkable $2 billion increase from the previous year. The insurer attributes this success to strategic customer-centric initiatives and a decline in catastrophe-related losses. Yet, the company observed a reduction in revenue, driven by decreased customer retention and a drop in direct written premiums.
In its 2025 financial report, the Madison, Wisconsin-based mutual holding company highlighted a property/casualty underwriting gain of $2.6 billion, significantly surpassing the $603 million gain recorded in 2024. The improvement stemmed largely from a notable decrease in both catastrophe and non-catastrophe claim losses. The combined ratio reflected this positive trajectory, improving from 96.6 in 2024 to 84.6 in 2025, due to an 11-point reduction in loss and loss adjustment expenses.
The expense ratio for American Family insurers decreased to 31.9 from 33.1 the previous year, marking its lowest point in over 30 years. This was credited to effective management of expenses and exposures. CEO Bill Westrate underscored the company's dedication to maintaining financial strength and enhancing customer service through efficiency and technology investments. In 2024, the company’s strategic moves, including selling The General and exiting select personal and commercial lines, contributed to a 5.6% decline in direct written premiums, leading to a drop in overall revenue from $20.0 billion to $19.5 billion in 2025.
Despite the inherent challenges of strategic transitions, life insurance policies in force experienced a modest increase of 0.4%, although operating gains fell from $129 million in 2024 to $122 million in 2025. The reduction in catastrophe claims, down to $2.4 billion from $3.3 billion, combined with a decrease in non-catastrophe claims to $7.0 billion due to asset divestitures, bolstered financial outcomes. As the year closed, American Family's members' equity soared to $14.3 billion, up from $10.6 billion in 2024, driven by robust underwriting results, investment income, and capital gains. CFO Troy Van Beek conveyed confidence in the company's strategic directions, balancing profitability with growth amid market uncertainties.