LINCOLN, Neb. (AP) - One of Nebraska’s largest insurers is going strong and weathering the market’s changes more than a century after it was formed, according to its leader.
Mark Walz, chairman, president and CEO of Farmers Mutual of Nebraska, said the longtime company, which turned 125 in November, has evolved since a group of 22 farmers decided to get into the business in 1891.
For the first 107 years, Farmers Mutual of Nebraska wrote policies only in the state. The company has since branched out into South Dakota and is the largest insurer of farms in both states, and the largest Nebraska-based property insurer.
“Those 22 farmers formed Farmers Mutual because they had a need that they didn’t think could be met by insurance companies that were based on the coasts and didn’t understand people like them,” Walz said.
Still, the insurer has encountered challenges. Walz told the Lincoln Journal Star (https://bit.ly/2hAm695 ) that persistently low interest rates in recent years have made it difficult to grow reserves because of the company’s more conservative investments in areas like municipal bonds and U.S. government bonds. Other insurance companies have investments in pensions and commercial mortgages.
“It’s been a challenge with the investment yields being as low as they’ve been,” Walz said.
A set of damaging hailstorms in May, some of the worst in state history, led to the payout of $48 million on about 6,600 claims, although some of those expenses were covered through reinsurance contracts
“It was definitely a challenge for all of us that write business in Lincoln,” he said.
Still, the company continues to grow. Walz said the number of polices are up to about 250,000, a growth of about 1 percent from last year, and revenue increased by 5.5 percent in 2016.
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Information from: Lincoln Journal Star, https://www.journalstar.com
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