2018
ANNUAL REPORT
Kevin Steiner
President & CEO
Community support and philanthropy remain a very important part of our culture. We have a responsibility to support and improve the communities in which we live and work. In 2018, we hosted our biennial Midwest Athletes Against Childhood Cancer (MACC Fund) fundraising event and continue to be amazed at the generosity of our agents and business and community partners. Together we raised and donated $916,000 to the MACC Fund! In addition, with our Spirit of the Silver Lining® Awards and Independent Agents’ Fund, we donated $120,000 in 2018 to nonprofits supported by our independent agent partners. Since the inception of this program, we’ve donated nearly $1.4 million to dozens of worthy nonprofit organizations throughout the Midwest.
For the property/casualty industry, 2018 was a repeat of 2017 in many ways. The challenges the industry faced in the previous year ... catastrophic weather events, a very competitive marketplace, agency and company consolidation, and technology issues ... continued into 2018.
This was also true for West Bend; the challenges we faced in 2017 remained the same in 2018. Fortunately, 2018 was also a repeat of 2017 from a results perspective and we experienced another outstanding year! Thanks to our associates and independent agency partners, West Bend delivered strong growth and profit. We also continued to be recognized as a top workplace and earned many awards.
At West Bend, we pride ourselves on delivering results that are in the top quartile of our industry. I’m proud to report that, once again, West Bend’s results will comfortably exceed those of our peer group and the industry. We ended 2018 with an outstanding combined ratio of 91.9%, led by our Personal Lines and Commercial Lines divisions with combined ratios in the 80s. That result brings our five-year combined ratio average to 94.6%.
COMBINED RATIO:
91.9
%
FIVE-YEAR COMBINED RATIO AVERAGE:
94.6%
These outstanding underwriting results helped produce a gain to surplus of $97 million. Total surplus at the end of 2018 was $1.138 billion.
Despite a very competitive marketplace, we continued to grow our company with an increase of 6.2% in direct written premium. Total direct written premium at the end of 2018 was $1.267 billion. This brings West Bend’s five-year compound annual growth rate to 7.1%.
INCREASE IN DIRECT WRITTEN PREMIUM
6.2%
TOTAL DIRECT WRITTEN PREMIUM 2018
$1.267
FIVE-YEAR COMPOUND ANNUAL GROWTH
RATE
7.1%
BILLION
Our 1,275 dedicated associates and more than 1,500 independent agency partners remain West Bend’s sustainable competitive advantage. The relationships we share continue to make us a leader in the property/casualty industry. Our associate group is a strong blend of tenured and newer associates. Currently 162 of our associates have 25 years or more of tenure at West Bend. At the same time, we continue to add talented individuals to strengthen our company even more.
2019 marks a significant milestone for our company. On April 13, we’ll celebrate our 125th anniversary. We’re very proud of what we’ve accomplished in those 125 years. We started writing business in 1894 with seven independent agents. Today we remain dedicated exclusively to all of our agent partners throughout 13 states. I thank them for their dedication and commitment to West Bend. I thank all of our associates for their great contributions to the tremendous success we’ve achieved. Finally, I thank our loyal policyholders who chose West Bend to step up when they need us to do the right thing. We pledge to continue to provide the Silver Lining for many more years to come.
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Our definition of success
The definition of success depends on who you ask. It’s a little different for just about everybody. And because insurance companies aren’t the same, how we define success at West Bend isn’t how our competitors define it.
Measures of success in the insurance industry, however, are universal: Profitability and growth. By these measures, West Bend has had a string of successes.
We ended 2018 with a combined ratio of 91.9%, capping off a seven-year run of profitability, one of the longest in recent history. Our five-year combined annual growth rate stands at 7.1%. By these standard industry measures, our company has certainly enjoyed significant success.
Like other insurance companies, we could also measure success by the awards we’ve won. After all, there are plenty. But bragging isn’t our style.
At West Bend, we believe the true measure of success is far more than profitability, growth, awards. Our success begins with our core values.
Central to our core values are our people. Our associates make the difference in setting us apart from other insurance companies through personable, caring, and empathetic service, strong work ethics, and pride in responsibilities. Our people do the right thing for the customer and each other. We’re proud of our associates and reward them and the community in which we work with trust and dedication.
We provide service our customers rave about. We go the extra mile and make the extra effort in each interaction with ...
We develop and nurture strong relationships between agents and all associates through personal contact, responsible actions, and a genuine concern for our valued partners. We use such means as agency performance programs, continuing education, and advisory boards to strengthen the bonds between agency and company and ensure our mutual success.
We deliver on our promise to provide our customers with sound insurance. We are forthright and fair with all parties affected by our decisions. We do the right thing.
We continue to make decisions at all levels that reflect our concern for financial stability. We continue to act in a fiscally-responsible manner to ensure our company’s long history of financial stability remains intact, and to continue to provide a stable market for our customers.
Our definition of
SUCCESS
We are relationship driven.
We are passionate about service.
by doing all we can to make West Bend their company of choice, while acting responsibly and in the best interests of our customers and our company.
by providing them with fast and fair claim service and thorough underwriting and loss prevention services. We respond to their needs quickly, empathetically, and ethically.
by devoting time and attention to their requests and providing them with service that exceeds their expectations.
Our agents
Our POLICYHOLDERS
FELLOW ASSOCIATES
We are financially stable.
We operate with honesty and integrity.
All of these core values define our success. They are what make our company great. They are the reason agents choose to do business with us, the reason policyholders keep their business with us, and the reason our associates consider West Bend a great place to work.
And while we’re very proud of our financial success and honor our loyal agents and hard-working associates for doing their part in achieving it, we know the true measure of success is far more than profitability and growth.
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Our financial results
Financial
RESULTS
Statutory Basis - Thousands
Combined
RATIO
2016
2017
2018
Direct Written Premium
$1,193,688
$1,267,409
$1,115,054
Net Premium Written
$1,169,043
$1,091,965
$1,016,122
Underwriting Profit Before Policyholder Dividends
$103,437
$75,061
$26,802
Net Investment Income
$52,183
$48,222
$39,837
Realized and Unrealized Gains on Investments After Tax
<$16,846>
$50,213
$29,139
Net Income
$114,096
$88,158
$40,071
Total Surplus Increase from Operations
$96,924
$94,147
$68,761
100–
99–
98–
97–
96–
95–
94–
93–
92–
91–
90–
2016
2017
2018
98.6%
93.8%
91.9%
MILLIONS
Policyholders'
SURPLUS
ASSETS
MILLIONS
$947
$1,041
$1,138
$2,521
$2,696
$2,889