A Culture of Commitment.2021 annual report

Committed to
Agent Partners
Policyholders
Injured Workers
Teammates
Community
Innovation

Culture

Of the many values that drive our success, our commitment to ‘People First’ remains most cherished.

For more than a decade, the contributions of more than 1,500 teammates have distinguished our organization in the marketplace, and their unwavering dedication to each other and to our agent partners and policyholders continues to drive our purpose and our work.

In 2021, this outstanding culture was again recognized as a ‘Best Place to Work’ – now more than 12 years running – and our efforts to further build purposeful connection through inclusion and diversity were embraced by teammates across our brands.

Awards

Business Insurance Best Places to Work 2021 AAIM Up RAICES Veterans Employee Resource Network WONDER
Cristin Croce
Employee of the Year
Debbie Jaskolski
Leader of the Year

Community

While the lingering impact of COVID-19 continued to limit in-person engagement in 2021, AF Group teammates channeled their historic generosity and benevolence through personal contributions to our annual employee giving campaign.

Matched by the company, contributions totaled more than $1 million to 100 charities nationwide. Additionally, thousands of virtual volunteer hours provided support and resources to organizations that embrace our core areas of focus: education, economic development, diversity and health and human services.

$300K
in employee donations / $1M in corporate donations
2,600
hours volunteered virtually
101
pints of blood donated
104
charitable groups supported
Prep and Pack Kitchen Nourished by AF Group

One of AF Group’s community partnerships includes Allen Neighborhood Center, which aims to create a strong sense of place, belonging and community pride by building safe, sustainable and thriving neighborhoods.

Financials

Our sustained financial success is the culmination of the outstanding commitment and hard work of our teammates – which has made AF Group truly unique in the marketplace.

In 2021, AF Group continued its outperformance of the industry – thanks to the strong performance in workers’ compensation and our AF Specialty, Fundamental Underwriters and Assigned Risk Solutions brands. The result was an end-of-year combined ratio better-than-plan of 93.5%.

93.5%
better-than-planned end-of-year combined ratio

Financial Awards

Ward’s 50. Safety. Consistency. Performance. AM Best

Entrance into the Assumed Reinsurance market helped drive diversification premium to more than $700 million, and the year was culminated by the completion of our five-year Digital Transformation effort, which has significantly improved the customer experience and ease of doing business for our customers.

$700M+
from diversification premium

Collective Financial Performance

Year Ended December 31
(dollars in thousands)

AF Group

Gross Written Premium
2021 2,312,031
2020 2,281,130
2019 2,071,700
2021 2020 2019
Net Income 174,432 149,287 224,265
Return on Equity 10.6% 9.7% 16.8%
Statutory Net Written
Premium/Surplus
1.18 1.32 1.49
Net Income
2021 174,432
2020 149,287
2019 224,265
Return on Equity
2021 10.6%
2020 9.7%
2019 16.8%
Statutory Net Written Premium/Surplus
2021 1.18
2020 1.32
2019 1.49
Underwriting Ratios as a Percentage of Net Earned Premium Calendar Year Combined Ratio
2021
93.5%
2020
98.6%
2019
92.4%

Workers’ Compensation Division

Selected Financial Data
(dollars in thousands)

Accident Fund

Direct Written Premium
2021 881,462
2020 874,655
2019 906,976
GAAP Combined Ratio
2021
92.7%
2020
94.9%
2019
91.3%

United Heartland

Direct Written Premium
2021 353,939
2020 336,345
2019 347,591
GAAP Combined Ratio
2021
91.6%
2020
109.0%
2019
97.3%

CompWest

Direct Written Premium
2021 156,550
2020 153,880
2019 154,297
GAAP Combined Ratio
2021
102.8%
2020
108.0%
2019
89.4%

Third Coast Underwriters

Direct Written Premium
2021 99,433
2020 98,147
2019 108,380
GAAP Combined Ratio
2021
100.4%
2020
103.1%
2019
91.3%

Diversification Brands

Selected Financial Data
(dollars in thousands)

AF Specialty

Gross Written Premium
2021 695,008
2020 615,493
2019 310,400
Underwriting Margin %
2021
3.8%
2020
3.9%
2019
6.3%

Assigned Risk Solutions

Gross Written Premium
2021 67,354
2020 70,222
2019 72,675
Fee Income Earned
2021
13,620
2020
13,939
2019
13,474

Fundamental Underwriters

Gross Written Premium
2021 58,446
2020 41,911
2019 24,604
GAAP Calendar Year Combined Ratio
2021
97.8%
2020
99.2%
2019
122.2%

With a tireless passion for our policyholders, genuine compassion toward the injured workers we serve, and a clear desire to create innovative specialty product solutions offered in partnership with our valued agents, we continue to redefine our business to create the best customer experiences.

Leadership