Moody’s goes positive on American Family, citing improved profitability

Moody's Ratings has changed the outlook to positive from stable for ​the A2 insurance financial strength rating of ‌American Family Mutual Insurance Company and the Baa2 senior unsecured notes rating of subsidiary AmFam Holdings.

Moody’s cited ​American Family's strong personal lines market ​presence, particularly in the Midwest, along with ⁠a high-quality investment portfolio, sound reserves and moderate ​financial leverage.

“The positive outlook reflects the company's significant ​improvement in underwriting profitability through rate increases, tighter terms and conditions, shedding noncore and higher volatility business as ​well as streamlining expenses,” Moody’s said.

American Family's ​consolidated GAAP members' equity increased to $14.3 billion at year-end ‌2025 ⁠based on strong profitability and net proceeds from the divestiture of The General in late 2024.

Moody’s said American Family’s strengths are offset by ​meaningful exposure ​to natural ⁠catastrophes but noted its significant ceded reinsurance protection to mitigate these risks.

“American ​Family also faces intense and increasing ​competition ⁠in personal auto from large, national writers. Given its mutual structure, American Family cannot readily access ⁠the ​equity capital markets,” Moody’s said.

On ​a consolidated GAAP basis, American Family reported net income of $3.2 ​billion for 2025 compared to $2.5 billion in 2024.