Looking back on 2022, the insurance industry has seen inflation, labor challenges, frequent severe weather, supply chain issues, higher claim volumes, and social inflation placing significant pressures on profitability.
The one thing that hasn't changed is
our commitment
to delivering
The Silver Lining .
Source data: CCC Article: 4th QTR 2020 Industry Update v1.26.23; E2 value: Inflation Cover Guide PL Letter 2023-2024; AON Cat Losses: https://www.iii.org/fact-statistic/facts-statistics-us-catastrophes; 12-month change as of June 2022: Consumer prices up 9.1 percent over the year ended June 2022, largest increase in 40 years : The Economics Daily: U.S. Bureau of Labor Statistics (bls.gov); Hales Report: Hales_Report_Issue_19_2022.pdf (d2vnc87hommcxj.cloudfront.net); Insurance Information Institute: Trends and Insights: Social Inflation What it is and why it Matters.
Kevin Steiner, CEO
I'm very proud of our associates, whose outstanding work and commitment produced these results. Their efforts were particularly impressive during the pandemic, far exceeding comparative industry growth and profit results.
West Bend welcomed 2022 on the heels of 10 consecutive years of combined ratios under 100% and direct premium growth that exceeded our annual goals.
It was arguably the finest decade in our company's history.
Overcoming challenges, 2022 was a year that reminded us we’re in the risk business. The industry, including West Bend, experienced excessive and extreme weather, financial and social inflation, and a very difficult investment market. When 2022 financials are released across the industry, final combined ratios will be well above 100% with accompanying losses in surplus volumes.
West Bend's 2022 combined ratio was 104.6%. Personal Lines was affected the most by severe weather and general inflation, ending the year with a combined ratio of 129.2%. West Bend's Commercial Enterprise had another excellent year with a combined ratio of 94.5%. Our diversification by class and line of business in Commercial helped produce this excellent result.
West Bend remains well capitalized and in a strong position to grow the company. In 2022 direct written premium increased 13.8%, the result of strong retention, rate increases, and a record $239 million in new business. Our direct written premium total is now $1.87 billion. In 2021, our company added $196.5 million to surplus. Unfortunately, the underwriting and investment losses in 2022 resulted in an $83 million loss of surplus. The company's total surplus at year-end was $1.5 billion, and our premium-to-surplus ratio was 1.14 to 1. Total assets finished just short of $4 billion at $3.997 billion.
I thank our associates and agents for their dedication and loyalty. I thank our policyholders for the trust they place in us and pledge our commitment to continue to provide the very best property and casualty insurance products and services. At West Bend, we remain committed to our vision of being the company of choice for associates, agents, and policyholders.
Retaining and acquiring talent in 2022 was a challenge for many industries and businesses. I’m proud to report that in 2022 West Bend hired nearly 250 new associates who were needed to backfill retirements and turnover as well as fill new positions due to our strong growth. We embraced the changes brought on by the pandemic and expanded our geographical search for new talent. Now, 30% of our associate workforce is fully remote operating from 24 states. Associates shared that having a flexible work environment was important, so we’ll continue to offer our office-based associates a hybrid work schedule option. Most importantly, we found this workforce model served to enhance our relationship-based culture, which remains our greatest strength.
As our company approaches $2 billion in premium, it’s important for us to remain true to our mission, vision, values, and operating principles. Also important is our commitment to support the communities in which we live and work. Our community support grants last year totaled more than $2.7 million. This assistance included contributions to 37 Spirit of the Silver Lining® nonprofits supported by our independent agent partners. Since the inception of the Spirit of the Silver Lining Award program, we’ve donated $1.8 million to our agent-supported nonprofits.
Severe weather events were more frequent and intense. The total cost of natural disasters across the industry in 2022 is estimated to exceed $100 billion.
Automobile supply chain issues were a main contributing factor to profitability because of limited parts availability, technician shortages, and the growing complexity of vehicle design and mechanics.
Nationwide, reconstruction costs in 2022 increased 7.5% for residential and 6.1% for commercial structures.
Auto claim costs associated with motor vehicle parts and equipment rose 23% across the industry.
Nationwide, the average cost of used cars and trucks is up 47% from pre-pandemic levels.
RELATIONSHIPS
ARE STILL OUR FOCUS
CHALLENGES
OVERCOMING
SILVER LINING SUMMIT
SEPTEMBER
Best Places to Work in Insurance
Business Insurance Magazine and the Best Companies Group included West Bend on the large employer category list of Best Places to Work in Insurance in 2022. This is the thirteenth consecutive year we’ve been recognized as one of the companies in the insurance industry with the highest levels of employee engagement and satisfaction.
Best Workplaces in Financial Services & Insurance
Great Place to Work® and Fortune Magazine named West Bend one of the Best Workplaces in Financial Services & Insurance™ for 2022. Ninety-two percent of West Bend respondents said West Bend was a great place to work.
America’s Best-In-State Employers
West Bend was named one of America’s Best-In-State Employers in 2022 by Forbes and market research company Statista. West Bend ranked eighth and was the highest-ranked insurance company on the list of 75 Wisconsin employers.
AWARDS
WEST BEND IS HONORED WITH
After two and a half long years of limited travel and in-person interaction, associates fully embraced the opportunity to reconnect with coworkers and, in many cases, meet other associates face-to-face for the first time. More than 1,300 associates from 25 different states attended the first-ever companywide event held on the West Bend campus. Associates participated in department conferences, a wide range of educational and motivational seminars provided by subject matter experts, and attended nightly social gatherings concluding with an Oktoberfest-themed celebration.
COMMUNITIES
SUPPORTING OUR
West Bend's fundamental approach is to support the organizations our associates are involved with and passionate about helping. Acting upon our core values of excellence, integrity, and responsibility, we identify ways in which we can reach under-resourced areas, specifically supporting programs involved with early childhood development, youth mentorship, and family support.
The Silver Lining Classic, through generous associate and agent philanthropic support, raised $525,000 for Feeding America and more than 30 other organizations focused on addressing hunger.
The 2022 United Way campaign raised nearly $410,000 through associate contributions and support.
West Bend partnered with the Arbor Day Foundation on a three-year mission to plant trees in storm-damaged areas across the Midwest. In 2022, volunteers, including independent agents and West Bend associates, planted trees in Cedar Rapids, Iowa, an area that had lost nearly 70% of its tree canopy in the August 2020 derecho.
Direct Written Premium
Net Premium Written
Underwriting Profit Before Policyholder Dividends
Net Investment Income
Realized and Unrealized Gains on Investments After Tax
Net Income
Total Surplus Change from Operations
$1,640,150
$1,536,116
$91,310
$80,242
$73,073
$168,701
$196,508
$1,865,775
$1,730,323
($80,445)
$90,987
($83,202)
($9,696)
($83,025)
Financial Results
Statutory Basis – Thousands
2020
2021
2022
$1,453,310
$1,360,949
$91,843
$91,366
$49,528
$131,689
$169,876
RESULTS
The message we're delivering to our independent agency partners is, "We're in this together." West Bend is committed to overcoming the challenges the industry is facing. We will continue to work hard to be the carrier of choice for our agents, policyholders, and associates.
The resolve of the independent agency channel continues to be strong despite the aftermath of COVID, inflation, labor challenges, and rising interest rates.
Our independent agency model drives success within the markets we serve and the policyholders we target.
West Bend has a relationship culture. We actively cultivate relationships that are mutually supportive, beneficial, and respected by one another. We recognize our associates are our greatest asset, and the key to our success and meeting our corporate strategic goals
is becoming the best company at attracting, retaining, and engaging talent in a flexible work environment.
West Bend has a workforce of more than 1,500 associates.
Our success is certainly driven by the tenure of many of our associates and the fresh perspective new associates bring to our company.
Our ranks include 322 associates in our 25-year club, and 43% are still working for the company.
ANNUAL REPORT
2022
106–
102–
98–
94–
90–
2020
2021
2022
93.6%
93.9%
104.6%
Combined Ratio
$1,600
1,400
1,200
1,000
800
600
400
200
0
2020
2021
2022
$1,401
$1,597
$1,514
MILLIONS
Policyholder Surplus
MILLIONS
2020
$4,000
3,000
2,000
1,000
800
600
400
200
0
2021
2022
$3,551
$3,830
$3,997
Assets
