Farm Bureau Insurance Maintains Positive Gains for Third Consecutive Year
Published: 01 April 2016
Excellent business retention, calm weather, and consistently high agency force productivity in 2015 contributed to Farm Bureau Insurance of Tennessee maintaining its positive gains for a third consecutive year.
Farm Bureau Insurance’s property and casualty operations saw automobile business retention rise to 96.8 percent, while homeowner and farmowner retention remained high. The life company regained its position as the number one writer of life insurance in Tennessee. Dividends to shareholders and increased stock valuations were announced at the Farm Bureau Insurance annual meeting in Franklin.
Chief Executive Officer Matthew M. Scoggins Jr. noted that although Farm Bureau Insurance had a successful year, the companies are always striving to find new and better ways to serve customers.
“We are not resting on our past successes. We are always looking ahead to the next thing we can do to improve our companies,” Scoggins said.
Farm Bureau Insurance of Tennessee is the trade name for the group of companies including Tennessee Farmers Mutual Insurance Company, Tennessee Farmers Assurance Company and Tennessee Farmers Life Insurance Company. Headquartered in Columbia, the companies provide insurance services for members of the Tennessee Farm Bureau Federation.
Stock prices rise, dividends voted
The stock companies increased stock values and declared dividends. Based on the year’s outcomes, the stock price for Tennessee Farmers Life was announced at $50.33 per share, a 7.7 percent increase in stockholder equity. The company’s directors voted a 3 percent dividend and offered to purchase up to 200,000 shares.
Tennessee Farmers Assurance Company stock price was announced at $19.49 per share, a 14.3 percent increase in stockholder equity over the previous year. The directors also authorized a 3 percent dividend and the purchase of up to 200,000 shares.
P&C continues to see high retention rates
Automobile business retention and good weather contributed to a year of positive results, said John Law, chief operating officer of Property and Casualty Operations. Automobile retention climbed to 96.8 percent, and homeowner and farmowner retention remained steady at 91.4 percent and 94.7 percent respectively.
“It’s not just about new business but also about keeping the business we have,” Law said.
The number of autos and and properties insured grew by 19,852 units, placing the total at 1.78 million.
Auto and property losses were 58.4 percent of each premium dollar, while company expenses totaled 22.9 percent. The combined ratio of 81.3 percent compares favorably to 98 percent for the P&C industry and represents the third consecutive year of positive results. The low combined ratio allowed Farm Bureau Insurance to add $290 million to surplus. 2015 also saw the opening of four new sales offices across the state.
Life Company regains number one position
Life insurance premiums grew to $142.6 million, an increase of 4.4 percent over the previous year, said Neal Townsend, chief operating officer for Life Operations.
The life company now has nearly 336,000 policies totaling $33 billion in force, an increase of 4.6 percent over 2014. Tennessee Farmers Life regained its position as the state’s number one writer of individual life insurance in Tennessee. The company has held this distinction for 11 of the previous 13 years.
This accolade serves both to illustrate the life company’s past commitment to serving its customers and its pledge for the future, Townsend said.
“Going forward, our focus will continue to be on our customers, the strength and stability provided through our products, and our dedicated agents and co-workers,” Townsend said.
The company’s mortality experience was 60.6 percent of expected, falling within the company’s ongoing profitability goal of 65 percent. During 2015 Tennessee Farmers Life paid 1,281 death claims for a total of $65.3 million.
Total assets grew to more than $2.1 billion, an increase of 4.3 percent over the previous year.
Townsend also reported on Generation Life Insurance Company, an online and call-center sales model launched in 2012 to sell in 22 states outside Tennessee. The direct-online life insurance market is dominated by established companies that form an effective entry barrier, Townsend said. Generation Life has faced higher than projected expenses and the company is not performing at the expected level. As a result, marketing and sales efforts have been suspended and a buyer for the company is being sought.
About the ‘Farm Bureau Insurance of Tennessee’ companies
Tennessee Farmers Mutual was founded in 1948 to insure automobiles, homes, farms and personal property. Tennessee Farmers Assurance is a stock company established in 1991 to provide additional capital for the property and casualty operations, and to give investors an equity opportunity linked to the mutual company’s success. Tennessee Farmers Life is a stock company founded in 1973 to sell life insurance.
Coverage is available to Farm Bureau members at more than 180 locations throughout the state; all Tennessee residents are eligible for membership in the organization. Additional information is available at fbitn.com.