American Family Insurance reported $2 billion more underwriting profit in 2025, compared with 2024—pointing to “deliberate customer-driven strategic actions and a lower level of catastrophe losses to explain the favorable result.
The actions meant declines on the top line, the Madison-Wisc.-based mutual holding company reported Monday, also reporting lower customer retention.
In a media statement, American Family reported that a net underwriting gain of $2.6 billion in property/casualty lines for 2025, compared to a net underwriting gain of $603 million in 2024, driven primarily by reduced catastrophe and non-catastrophe losses year-over-year.
The combined ratio improved 12 points to 84.6 in 2025 from 96.6 in 2024 in the prior year. Most of the decline reflected roughly 11 points of improvement in the loss and loss adjustment expense ratio. The company said that fewer large catastrophe losses helped to offset losses from January wildfires and early spring wind and hailstorms.
The expense ratio for the American Family insurers also decreased to 31.9, improving from 33.1 in 2024. This marked the company’s lowest expense ratio since at least 1992, the statement said, highlighting a commitment to effective exposure and expense management that is ultimately aimed at delivering greater value for customers.
“Insurance is ultimately a promise that we will be there when our customers need us most,” said Bill Westrate, chair and CEO of American Family Insurance. “In 2025, we honored our commitments to our policyholders while also strengthening financial resilience, operating with greater efficiency, and investing in technology and enhanced experiences for our customers.”
Describing the impact of strategic actions taken to ensure continued financial wherewithal to deliver on customer promises— the 2024 sale of The General, the exit from personal lines at affiliate Main Street America Insurance, and targeted underwriting changes in commercial lines—American Family reported a 5.6% drop in direct written premiums last year.
Total revenue—including earned premiums for property/casualty insurance and life insurance, as well as investment income—decreased to $19.5 billion in 2025 from $20.0 billion in 2024.
Policy retention and new business also declined in 2025, consistent with broader industry trends, the company statement said.
American Family ended the year with 12.1 million policies in force, down 11% from 2024. The decline was just 3%, excluding the effect of the strategic actions.
Continued focus on expense and portfolio management further reduced the expense ratio, reinforcing American Family’s commitment to delivering value, protection and reliability for its policyholders, the company said.
Chief Financial Officer Troy Van Beek said the company has been “taking deliberate steps to achieve the right balance between profit and growth.”
“Our disciplined approach and long-term strategies position us to respond to uncertainty while continuing to deliver industry leading service to our customers,” he said.
American Family had to respond to fewer claims in 2025, following the three highest catastrophe loss years in company history. With the number of severe weather events notably lower, American Family paid $2.4 billion in catastrophe claims in 2025, down from $3.3 billion in 2024.
Non-cat claims also declined to $7.0 billion in 2025, compared to $8.2 billion in 2024, with the majority of that decrease attributed to the sale of The General operating company.
Members’ equity increased to $14.3 billion at the end of 2025, up from $10.6 billion in 2024, due primarily to underwriting results, investment income and capital gains.
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