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

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.

Learn more about Allen Neighborhood Center

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.

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.