Farm Bureau Sees Growth in 2017

March 29, 2018

annual meeting starry sky

Farm Bureau Insurance of Tennessee posted positive results in growth and business retention in 2017 as the companies set the stage for a transformation of their technology platform and data handling capabilities, officials announced Friday.

Farm Bureau Insurance’s property and casualty operations increased home and automobile coverage by nearly 47,000 units, while customer retention in all business lines remained among the highest in the industry. The life insurance company posted gains in sales and earnings and increased its capital and surplus position. In other news, the sales force grew to 500 agents across Tennessee and posted productivity numbers among the leaders of 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 Jeff Pannell outlined his vision for a new technology platform that would empower agents and employees to give increased levels of customer service and new opportunities to grow the business. While the project represents the largest IT investment in the companies’ history, the result will position Farm Bureau Insurance to answer the challenge posed by technology companies seeking to disrupt the insurance marketplace, Pannell said. At the same time, he emphasized that the companies will maintain their commitment to maintaining a low expense factor and fostering personal relationships.
“New technology will allow our people to do what they do best,” Pannell said. “We are not talking about replacing our agents nor claims people with technology. On the contrary, we are talking about putting them in a position to deliver the kind of service that we are known for.”

Pannell set a three-to-five-year window for the project’s completion.

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

Based on the year’s outcomes, the stock price for Tennessee Farmers Life was announced at $56.89 per share. The company’s directors voted a 3 percent dividend and offered to purchase up to 200,000 shares. Stockholder equity increased 6.5 percent over the previous year.
Tennessee Farmers Assurance Company’s stock price was announced at $22.45 per share. The directors authorized a 3 percent dividend and the purchase of up to 200,000 shares. Stockholder equity increased 10.7 percent year-over-year.

P&C posts growth; impact on state economy noted

Property and Casualty Operations posted gains fueled by policy and unit growth and customer retention, as well as a new emphasis on small business coverage, said P& C Operating Officer John Law.

Automobile retention ticked up to 97.6 percent, and homeowner and farmowner retention remained steady at 91.4 percent and 94.9 percent respectively. The number of autos and and properties insured grew by 46,806 units.

Auto and property losses were 73.1 percent of each premium dollar, while company expenses totaled 23.8 percent for a combined ratio of 96.9 percent and a $34.9 million underwriting gain. $150 million was added to surplus, which at the end of 2017 stood at $2.61 billion.

TFMIC’s strong surplus position enables the company to invest significantly in the Tennessee state and local municipal bond market, Law said. TFMIC’s bond holdings across the state total $786 million and help finance such things as public schools, city halls, performing arts centers, justice centers, ballparks and water treatment plants. These projects inject money into the state’s economy and improve the quality of life for all Tennesseans, Law said.

After four relatively calm weather years, 2017 returned to a more-normal level of storm activity, Law reported. An additional $58 million was added to the loss column by seven catastrophe-level storms. Auto losses tracked along with industry trends, driven by a higher accident frequency and increased hail damage.

Life Company productivity offsets low interest yields

Record levels of sales productivity drove positive results for Tennessee Farmers Life Insurance Company, said David Bell, chief operating officer for Life Operations.

TFLIC agents wrote nearly 46,000 insurance applications for more than $4.5 billion in face value, and more than 2,300 annuity applications. The life company now has $36.2 billion in force, an increase of 4.5 percent over 2016.

The company’s sales force averaged 98 life and annuity applications per agent. That is the highest figure in company history and more than double the average for multi-line agents across the country, Bell said. The sustained productivity helped offset profitability challenges posed by low interest rate yields on investments.

Life insurance premiums grew to $149.6 million, an increase of .03 percent over the previous year, Bell reported. Policyholder capital and surplus increased by $23.1 million, an increase of 5.5 percent year-over-year. Total assets grew to $2.28 billion, an increase of 3.3 percent.
The company’s mortality experience was 53.3 percent of expected, falling within the company’s ongoing goal of 65 percent. During 2017, Tennessee Farmers Life paid more than 1,400 death claims for more than $67 million.

Sales force grows to 500

Farm Bureau Insurance added the 500th agent to its sales force and has opened its 189th office, reported Chief Marketing Officer Phil Irwin. The agents set a new record in the number of life insurance applications submitted, and they responded to the challenge of increasing small business policies, which grew by 12.7 percent.

Irwin also reported on a new philanthropic relationship with St. Jude Children’s Research Hospital. More than 8,000 special-edition St. Jude Farmer Charlie caps were sold. All told, Farm Bureau Insurance raised $226,000 in 2017 to fight childhood cancer.

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 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 189 locations throughout the state; all Tennessee residents are eligible for membership in the organization. Learn more at Farm Bureau Insurance of Tennessee today.


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