2. Ward Financial Group Ranks Auto-Owners
rating also acknowledges Auto-Owners strong market assisted by associates located in the company’s
Among Its Top 50
presence as one of the 20 largest property casualty Westminster, Colorado, regional office. At year-end
COMMENTS FROM R. L. LOOYENGA, CHAIRMAN & CEO,named Auto-Owners Insurance Group was AUTO-OWNERS INSURANCE GROUP
2006, 16 local independent agencies represented
insurance organizations in the United States with
to the 2006 Ward’s 50 Benchmark Group for Auto-Owners and premium writings for the Group
more than $4.3 billion
achieving outstanding financial results over the Companies exceeded $1 million.
in net written premium
past five years (2001 - 2005). Auto-Owners is
as of year-end 2005.” In NEW FACILITIES OPENED IN 2006
they of onlylike,companiesrespect, to bothis why
one know, 10 trust and named which the
A.M. “2006 opinion,
Best’s was a year The foundation of Auto-Owners is its 10 core
Two New Offices Opened
property and casualty and the life/health Ward’s
of accomplishment and values: Honesty, Hard Work, success, andLoyalty,
Due to continued growth, Prudence, to better
companies in the A++ and we believe independent agents provide the best
50 Benchmark Groups, and one of only seven
A+ classifications—their serve its customers, Auto-Owners Insurance Group
celebration for the The Team, Our Relationships, Opportunities
method of marketing the property and casualty
our products. Our financial
companies named to
highest classifications— opened two additional offices. The new Missouri
strength50 Benchmark Group for 16 consecutive
Ward’s allows us to offer a wide array of
Auto-Owners Insurance for Associates, The Customer, Stability and
have a superior ability to regional office, located in Columbia, opened in
years. The objectives ofat competitive prices.
the analysis are to
Group. We were ranked Consistency, and Profit.facility” branch office houses
August 2006. This “full It is upon these values
products and protection
meet ongoing obligations
recognize the 50 companies that have excelled at
that our business hasand marketing has been for
underwriting, claims, grown, trust operations
to policyholders.
number 426 in the balancing safety, consistency for our success.
There are many reasons and performance
the company’s Missouri region.
Fortune 500 rankings, earned, and relationships thrive.”
Leading the wayand to then benchmark their the
over five years, are the people who make up In July 2006, Auto-Owners opened a claims
Auto-Owners Companies Earn Position On
Auto-Ownerswith the industry overall.associates
performance family: Our 3,300-plus branch in Louisville, Kentucky. And effective
our fourth straight year in the listing. And on
TheStreet.com Recommended List Ward Financial Group is a Cincinnati-based September 1, 2006, the Lakeland regional office was
July 1 we celebrated our 90th anniversary. Auto- and the nearly 35,000 independent agents who
of Companies divided into the East Florida and West Florida regions.
management consulting and investment banking
Owners has grown from first-year written and
Auto-Owners Insurance Company premium represent us. Weather-related losses were kind
firm specializing in the insurance industry, and R.L. Looyenga, chairman & CEO
New Construction
of $174.25 to over $4.56 billion during that each
Home-Owners Insurance Company were span. is us and our by Fortune magazine, the New
to recognized policyholders—who rely on Auto- In June 2006, an 18,150-square-foot newly
York Times, Reuters news service and others
Owners for ‘No Problem’ claim service—in as
ratedThroughout our 90 years, Auto-Owners has
A Excellent by TheStreet.com (formerly constructed regional branch office in Columbia,
an authoritative source for insurance industry
Weiss Ratings, Inc.). Owners Insurance South Carolina, opened, replacing a leased facility.
remained dedicated to the independent agency 2006, and our Safe. Sound. Secure.® investment
financial analysis.
Company and Property-Owners Insurance Land was purchased in Fargo, North Dakota,
system. People want to a rating of B+ Good.
Company each earned do business with people approach also proved successful. (4.6 acres) and in Lexington, Kentucky, (5.1 acres) for
These ratings place our companies on TheStreet. future construction of owned regional branch offices.
com Recommended List, an elite group of 106
property and casualty insurance companies.
COMPANIES’ REPORTS
Home-Owners Insurance Company recorded
approximately 34,800 agents in more than 5,900
Auto-Owners Insurance Group enjoyed
written premiums of $861.1 million at year-end
agencies, and is the Group’s largest insurer.
continued asset growth in 2006 and is recognized
2006. This property and casualty stock company
for exceptional financial strength and stability
Auto-Owners Life Insurance Company experienced writes business in Michigan and Ohio.
among the nation’s largest insurers. Comprised
another excellent year; over 42,000 applications
of five property and casualty companies and one
Property-Owners Insurance Company had another
were received. The Company recorded $18.5
life/health/annuity insurer, the Group had combined
fine year with written premiums of $66.6 million
billion of life insurance in force at year-end. In
assets of $12,802,024,643 at year-end 2006, up
in 2006. This stock insurer writes property and
addition, annuity reserves for this stock company
$1.1 billion from 2005. Net written premiums
casualty products in Indiana and Michigan.
increased nearly 10.0 percent to over $1.1 billion.
totaled $4,564,273,075. Over 4.3 million personal,
Assets were up 9.2 percent to $1.8 billion and
Southern-Owners Insurance Company completed
commercial, and life insurance policies were in
total Life Company written premium was $208.8
its 12th year of operation in 2006, with written
force at year-end 2006. Seventy-three underwriting,
million.
premiums of $140.4 million at year-end. This
claims and marketing offices serve customers in the
stock insurer writes property and casualty products
Group’s 25-state marketing territories. Owners Insurance Company recorded another
in Florida.
strong year with written premiums of over $1.1
Auto-Owners Insurance Company ranks among
billion at year-end 2006. This stock company is
the leading property and casualty insurers in the
the second largest property and casualty insurer in
United States with recorded net written premiums
the Auto-Owners Insurance Group and operates in
of over $2.5 billion at the end of 2006. This
24 of the 25 states that make up the Auto-Owners
mutual insurance company is represented by
regional market.
3. FINANCIAL REPORT
Property & Casualty
ASSETS NET WRITTEN PREMIUM (SALES)
Life Company Consolidated
Cash in Banks $ 1,747,242 $ 17,224,047 $4,564,273,075
2006
Accounts Receivable
Premiums in Process of Collection 874,365,587
Life Insurance Premium Deferred and Uncollected 22,652,100
Bonds (Amortized Value) 1,511,273,495 8,200,735,968 $2,792,353,087
2001
Stocks (Statement Value) 52,590,028 1,588,860,818
Mortgages - Real Estate First Mortgages 151,701,341 11,321,568 $1,682,740,528
1996
Real Estate Owned 64,173,310 76,770,327
$1,208,164,451
1991
Miscellaneous Assets 36,674,155 395,236,386
$890,399,879
1986
Total Assets $1,840,811,671 $11,164,514,701
LIABILITIES
Claim Reserves
All Claims in Process of Adjustment 3,673,190,831
8,089,385 COMBINED ASSETS
Aggregate Reserve for Life, Accident
$12,802,024,643
and Health Policies 1,592,992,612 2006
Reserve for Unearned Premiums 1,950,479,604
Reserve for Miscellaneous Accounts and Taxes Payable 694,819,538
36,747,196
$7,364,292,887
$1,637,829,194
Total Liabilities $6,318,489,973 2001
$4,974,696,399
CAPITAL $ 3,450,000 1996
Contingency Reserve $3,116,981,794
1991
Excess of Assets over Liabilities. Provides
1986 $1,651,701,521
policyholders additional assurance of
the Companies’ abilities to withstand
4,846,024,728
catastrophic occurrences. 199,532,477
$ 11,164,514,701
$1,840,811,671
Total Liabilities and Surplus
4. SUMMARY OF COMBINED ASSETS
Combined Assets as of December 31, 2006
Auto-Owners is unwavering in its commitment toward
maintaining a high-quality investment portfolio. We remain
1.15% Cash & Short-Term Investments
committed to the proven investment principles that have guided us
12.97% U.S. Government Bonds
along a steady path throughout the years. 0.2% Non-Investment-Grade Bonds
11.24% Stocks
Depicted is a breakdown of the combined assets of the
Auto-Owners Insurance Group as of December 31, 2006. The 2.37% Real Estate Owned & Mortgages
combination of U.S. Government Bonds and investment-grade bonds
represents 74.66 percent of assets. Non-investment-grade bonds
represent only 0.2 percent of assets.
61.69% Investment-Grade Bonds
“The road to investment success has many potholes.
Our adherence to a Safe. Sound. Secure.® investment
portfolio helps assure that when you need us the most,
Auto-Owners will be there.”
Comments from R. L. Looyenga, 10.38% Miscellaneous Assets
chairman & CEO, Auto-Owners Insurance Group
100.0%
PROFIT & LOSS STATEMENT
REVENUE Life Company Property & Casualty Group
Net Premiums Written $ 208,830,145 $ 4,355,442,930
Net Premiums Earned 208,830,145 4,336,375,783
Net Investment Income 96,120,394 432,956,210
Total Income Earned $ 304,950,539 $ 4,769,331,993
EXPENSES
Claims Related Expenses 251,779,931 2,805,430,746
Operating Expenses 25,407,657 1,130,331,047
Total Expenses $ 277,187,588 $ 3,935,761,793
Net Income Before Income Taxes 27,762,951 833,570,200
Income Taxes 10,905,817 216,137,286
NET INCOME $ 16,857,134 $ 617,432,914
5. YEAR IN REVIEW
Auto-Owners Life Insurance Company Intro-
Auto-Owners Property Casualty Group
Auto-Owners Companies Earn A.M. Best
duces 30 Year Level Premium Term Product
Companies Earn Top Marks from
Superior Ratings
Auto-Owners Life Insurance Company
Demotech, Inc.
Auto-Owners property and casualty
introduced a 30 Year Term product in 2006. This
Auto-Owners Insurance Company, Owners
companies are rated A++ (Superior) by A.M. Best
product complements the other term offerings,
Insurance Company, Property-Owners Insurance
Company, a nationally recognized independent
which already featured 1, 5, 10 and 20 Year Term
Company, Home-Owners Insurance Company
insurance company rating organization.
products. The Life Company also revised Whole
and Southern-Owners Insurance Company earned
Auto-Owners Life Insurance Company is rated Life rates, and added two underwriting rate
Demotech’s Financial Stability Rating® A”
A+ (Superior) categories for preferred non-smoker and premier
(Unsurpassed) for 2006. The A” rating recognizes
by A.M. Best. non-tobacco. Also, the Long Term Care policy
unsurpassed financial stability, achieved by only
According to now offers (in most states) an optional 3 percent
the top companies evaluated. Demotech, Inc. is inflation rider, giving customers three choices in
A.M. Best
a financial analysis and actuarial services firm selecting how a benefit level is calculated.
Company,
whose Statements of Actuarial Opinion meet or
“The [Auto-Owners] Group achieved strong Auto-Owners Insurance Company Enters
exceed the professional actuarial requirements
operating results due to its well-established Idaho Market
established by the National Association of
independent agency relationships, competitive Auto-Owners Insurance Company began
Insurance Commissioners.
expense structure, diversified product offering and writing business in Idaho, its 25th state, in
adherence to strict underwriting fundamentals. The July 2006. Idaho policyholders and agents are
Ward Financial Group Ranks Auto-Owners
rating also acknowledges Auto-Owners strong market assisted by associates located in the company’s
Among Its Top 50
presence as one of the 20 largest property casualty Westminster, Colorado, regional office. At year-end
Auto-Owners Insurance Group was named
2006, 16 local independent agencies represented
insurance organizations in the United States with
to the 2006 Ward’s 50 Benchmark Group for Auto-Owners and premium writings for the Group
more than $4.3 billion in net written premium as of
achieving outstanding financial results over the Companies exceeded $1 million.
year-end 2005.” In A.M. Best’s opinion, companies
past five years (2001 - 2005). Auto-Owners is
in the A++ and A+ classifications—their highest NEW FACILITIES OPENED IN 2006
one of only 10 companies named to both the
classifications—have a superior ability to meet Two New Offices Opened
property and casualty and
ongoing obligations to policyholders. Due to continued growth, success, and to better
the life/health Ward’s 50
serve its customers, Auto-Owners Insurance Group
Benchmark Groups, and one of
Auto-Owners Companies Earn Position On opened two additional offices. The new Missouri
only seven companies named
regional office, located in Columbia, opened in
TheStreet.com Recommended List to the property and casualty
August 2006. This “full facility” branch office houses
of Companies Ward’s 50 Benchmark Group underwriting, claims, and marketing operations for
for 16 consecutive years. The
Auto-Owners Insurance Company and the company’s Missouri region.
objectives of the analysis are to recognize the 50
Home-Owners Insurance Company were each In July 2006, Auto-Owners opened a claims
companies that have excelled at balancing safety,
rated A Excellent by TheStreet.com (formerly branch in Louisville, Kentucky. And effective
consistency and performance over five years, and
Weiss Ratings, Inc.). Owners Insurance September 1, 2006, the Lakeland regional office was
divided into the East Florida and West Florida regions.
to then benchmark their performance with the
Company and Property-Owners Insurance
industry overall.
Company each earned a rating of B+ Good.
New Construction
Ward Financial Group is a Cincinnati-based
These ratings place our companies on TheStreet. In June 2006, an 18,150-square-foot newly
management consulting and investment banking
com Recommended List, an elite group of 106 constructed regional branch office in Columbia,
firm specializing in the insurance industry, and
property and casualty insurance companies. South Carolina, opened, replacing a leased facility.
is recognized by Fortune magazine, the New
Auto-Owners Life Insurance Company also Land was purchased in Fargo, North Dakota,
York Times, Reuters news service and others as
received an A Excellent rating. According to (4.6 acres) and in Lexington, Kentucky, (5.1 acres) for
an authoritative source for insurance industry
TheStreet.com, companies in these categories future construction of owned regional branch offices.
financial analysis.
offer “excellent financial security.”
6. AUTO-OWNERS HOME-OWNERS AUTO-OWNERS LIFE
INSURANCE COMPANY INSURANCE COMPANY INSURANCE COMPANY
Lansing, Michigan Lansing, Michigan Lansing, Michigan
PROPERTY-OWNERS OWNERS SOUTHERN-OWNERS
INSURANCE COMPANY INSURANCE COMPANY INSURANCE COMPANY
Marion, Indiana Lima, Ohio Lakeland, Florida
Administrative offices of all companies are located at
6101 Anacapri Blvd., Lansing, MI 48917
WWW.AUTO-OWNERS.COM
12131 (4-07)
