Farm Bureau Insurance posts excellent year in 2014; stock prices announced

 

Riding a wave of profitablility initiatives, favorable weather trends, and warm personal relationships with customers and business associates, Farm Bureau Insurance of Tennessee posted a second consecutive year of excellent results in 2014. 

Farm Bureau Insurance’s property and casualty operations saw solid gains and continues to cover more automobiles and properties in Tennessee than any other insurer. The life company maintained a consistent trend of outperforming the industry. Dividends to shareholders of both companies and increased stock valuations were announced at the Farm Bureau Insurance annual meeting in Franklin, Tenn.

 

Chief Executive Officer Matthew M. Scoggins Jr.  said the key to success is maintaining personal relationships in a balance of traditional agent offices and emerging online channels.

“We are in the age of the customer,” Scoggins said. “Some customers expect the personal service that can only be delivered by the agency force and our local offices. At the same time, many customers want to be served online. Going forward, our success will be determined by our ability to deliver a hybrid of both service models.”

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, Tenn., 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 $48.15 per share, a 11.1 percent increase in stockholder equity. The company’s directors voted a 3 percent dividend and offered to purchase up to 200,000 shares. The 2014 earnings per share was $1.60, the second best year in company history.

Tennessee Farmers Assurance Company stock price was announced at $17.56 per share, a 13.3 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. Earnings per share was $2.15, also the second best year on record.

P&C has stable, positive year

Management’s focus on operational improvements along with relatively mild weather combined to produce a year of positive results, said John Law, chief operating officer of Property and Casualty Operations.  

The number of autos and and properties insured grew by 10,705 units, placing the total at 1.75 million. Auto and property losses were 60.5 percent of each premium dollar, while company expenses totaled 21.9 percent. The combined ratio of 82.4 percent compares favorably to 98.4 percent for the P&C industry.

Part of management’s profitability focus is the use of new rating models to accurately price the company’s products. 

“Last year was an exceptional year. We are financially stronger, operationally stable and positioned to profitably grow,” Law said. 

The strong performance also allowed Farm Bureau Insurance to add $175 million to surplus. Other bright spots include a new regional claims center at Dresden to serve the northwest Tennessee area, and six new sales offices across the state.

Life Company outpaces the industry again

Life insurance premiums grew to $136.6 million, an increase of 3.3 percent over the previous year, said Dennis Stephen, chief operating officer for Life Operations.  In contrast, life insurance sales nationwide showed a 2 percent gain. The company’s expense ratio was 21.1 percent, continuing Tennessee Farmers Life’s tradition of being one of the industry leaders in expense management.

The life company now has 323,000 policies totaling $31.5 billion in force, an increase of 4.5 percent over 2013. 

“Our company delivered an exceptionally strong performance in 2014. We performed favorably against the backdrop of an economy that continued a slow but steady rebound,” Stephen said.

Again in 2014 the company limited annuity premium deposits, because annuity premiums place strains on profitability when interest rates are low. Annuity premiums in 2014 totaled $51.7 million, a 28.6 decrease from 2013.

The company’s mortality experience was 49.2 percent of expected–almost 16 percent below the company’s ongoing goal of 65 percent. During 2014, Tennessee Farmers Life paid 1,158 death claims for a total of $50.3 million.

Total assets grew to more than $2.0 billion, an increase of 4.7 percent year-over-year. In contrast, the top 100 life companies increased by 2.9 percent.

Generation Life sales ahead of projections

Stephen also reported on Generation Life Insurance Company, an online and call-center sales model launched in 2012 and now marketing policies in 22 states outside Tennessee. At year end of 2014, sales were exceeding projections. The company had 5,300 policies in force for a total face amount of $229 million and annualized premium of more than $3.2 million.

Generation Life’s expenses currently exceed its revenues, which was part of the company’s original projections. Stephen said the company is on target for future profitability.

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.

The property and casualty mutual company insures more vehicles and properties than any other insurer in Tennessee, and the life company is the state’s second largest writer of individual life insurance.

Coverage is available to Farm Bureau members at more than 170 locations throughout the state; all Tennessee residents are eligible for membership in the organization. Learn more at Farm Bureau Insurance of Tennessee.