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MFM Shows Profitable Growth in 2019 icon

This past year, Midwest Family Mutual was able to record its seventh consecutive year of profitable results while demonstrating superior growth. Our written premium for both MFM and its wholly owned subsidiary Midwest Family Advantage grew by 12.9% in 2019 to another record of $194.8M of written premium. With this kind of momentum, we're on the cusp of writing well over $200M in 2020.

Our 2019 combined ratio is estimated to be 93.8 despite some strong weather patterns in the upper Midwest this past summer. We grew our surplus by 13.1% in 2019 to $110.4M on the heels of strong underwriting results and impressive US equity returns last year. With this surplus growth, we achieved a Financial Size Category VIII in 2019. We consider all of these developments to be positive heading into the new decade, but there are underlying trends that water down the positive headlines. MFM's accident year results trended upwards in 2019 and our reinsurance costs will see a slight increase in 2020. Loss trends industry-wide are heading north with increased cost of construction, auto accident frequency on the uptick, and more litigious trends by state leading to runaway jury awards. For all of these reasons, we will remain selective with any additional Agency appointments and continue to be vigilant in our underwriting appetite. Loss leading lines of business driven by the aforementioned trends in select states will see needed rate increases in the coming year.

Through it all, we have a lot to celebrate and much to look forward to. In the past 10 years, we've grown from $80M of written premium to over $194M. Our surplus has grown from $38M to over $110M transitioning us from a Financial Size VI carrier to a Financial Size VIII. Our geographic expansion efforts have grown our operating territory from 7 states to 21 states culminating with our recent entry into the great state of Washington. This expansion coupled with our size has allowed us to limit our appointments to approximately 20 Agencies per state. Limiting our appointments despite growing demand for our contract has positioned us to work with only the best Agents in each state and to provide contract value to those with whom we partner. The quality of our Agency representation is best evidenced by the average Agency book size growing from $160k to over $550k over the course of these past ten years.

In the coming year, expect us to file workers compensation rates and rules in 17 additional states on behalf of our wholly-owned subsidiary Midwest Family Advantage (MFA). Once filed, MFA will provide us needed flexibility in the coming years to accommodate the diverse needs of a growing commercial customer base. In 2021, we'll start to file a package program and supplemental lines to compliment the workers compensation offering. Our Agents will soon see an improvement in our online personal lines quoting experience. We expect this upgrade to aid our high net worth personal lines growth (branded First Class Portfolio) in 2020. This program took off in 2019 and we expect even greater growth trends this year when we roll out our new Agency quoting portal.

Lots of positive change coming and it's all leading to new and innovative ways to efficiently and effectively handle the risk transfer needs of our Policyholders while organically growing our Agencies' businesses. We sincerely thank you for entrusting your business with Midwest Family Mutual and we'll continue to do all we can to continue to earn it.

Thanks so much for your business!

Aaron W. Boyd, MBA, CPCU, CIC
Executive VP & COO


Posted on Tuesday, February 04 @ 09:47:08 -06:00
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