Frankenmuth Insurance 150th Anniversary Booklet

150 Years of Frankenmuth Insurance

1868–2018

The story of Frankenmuth Insurance began 1849—Students
in 1868, when the town of Frankenmuth was and teachers at
filled with hopes and dreams. Seeking to Hart School Haus.
spread their faith and create a better life in
America, a handful of German immigrants
founded the town in 1845. Through hard
work and strong bonds of community, the people of
Frankenmuth soon carved a new life from the Michigan forests.

The town was growing and the future looked bright, but there were
trials. When a storm or fire damaged a barn or a home, the farmers
couldn’t dial up their agent or reach out online. They relied on their neighbors.
Pledging to help each other in times of need, the people of Frankenmuth
formed a mutual alliance of support which would one day become Frankenmuth
Insurance.

In many ways, we’ve come a long way from that small-town pledge. But in one
important way, we haven’t. We’re still neighbor helping neighbor, providing the
peace of mind that only the most trusted friends can offer.

In celebration of all our neighbors, we bring you this 150-year history
of Frankenmuth Insurance.

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The first neighbors: 1868

Sprechen Sie Deutsch? In 1868, if you couldn’t understand this question —
and answer “Ja!”— you could not be a part of the Deutschen Frankenmuther
Unterstützungs-Verein (the German Frankenmuth Aid Association),

the group that became Frankenmuth Insurance. The verein
was a true mutual insurance society. Members listed the
buildings and goods they wished to insure. When a member
had a loss due to fire or lightning, the other members all
contributed to cover it, knowing they would be supported the

same way in their time of need.

The association had written rules and bylaws, trustees
appointed to handle business dealings, and restrictions on
membership. Only German-speaking members were allowed, all members
had to be Lutherans in good standing, and those with questionable morals
were barred from joining. One man was denied membership because he
once held a dance in his house; after promising never to repeat the offense,
he was given membership. Since the agreement relied on all members
to help when other members sustained losses, the character of its members
was a critical concern.

These requirements didn’t limit the growth of the association; by the late
1870s, German-speaking Lutherans from as far away as Birch Run and
Saginaw were joining up. Soon the association had nearly 500 members —
more than double its original roster — and was insuring property worth about
a half-million dollars.

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Early 1900s —
Barn raising at
the Henry Poellet
family farm.

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Carl Nuechterlein (right)
and Norman Felgner
(left), accompanied by
three policyholders in
the mortuary building
office of the insurance
company.

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Frankly speaking, in English

Modest but steady growth continued for the
association. In 1910, the name was changed to
Frankenmuther Feuer Unterstützungs-Verein. In
1924, to accommodate the growing number of
non-German-speaking residents of the area,
the company eliminated the German-language
requirement and the organization became known in English only as
Frankenmuth Fire Aid Association. But records continued to be kept in German,
and business continued as usual. The association was not a flashy enterprise;
their business “headquarters” was in a back room of the Nuechterleins’
mortuary. Carl Nuechterlein, who helped run the mortuary, was also Secretary
(CEO) of the Fire Aid Association from 1925 to 1941, and helped organize the
Frankenmuth Mutual Auto Insurance Company in 1921 (see “A new business
hits the road” on page 9).

One day in the late 1930s, a team of examiners from the State Insurance

Department came to audit the association’s books. Carl Nuechterlein was busy

with a funeral, but let the examiners in, telling them all the association’s records

were in a box in the back room. The “box,” the examiners discovered, was a

spare wooden coffin, and the records were all neatly handwritten in German.

FUN FACT: Carl returned and interpreted for them, and though the examiners
The company’s 1931 annual found the records to be error-free, they suggested Carl find a
report lists numerous claims for more suitable file cabinet. They also insisted the records be
barns lost to fire, cows struck by kept in English from then on, and made it a directive for all
lightning, and one $15 claim for
insurance companies in the state. The association’s minute book
“damage to cheese.”

for 1939 was the first major record in which English replaced German.

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From association to corporation

The year 1941 brought a major milestone for the association.
The Frankenmuth Fire Aid Association became the Frankenmuth
Mutual Fire Insurance Company, a corporation operating in three

counties with 12 agents in the field. To make it even more official,
the company moved its offices out of the mortuary and into
the Fechter Hardware building at 112 South Main Street
(now Gill-Roy’s Hardware).

Though the association was now a licensed corporation,
its conservative practices, cautious willingness to try new
ventures, and strong sense of community remained.
These principles served the new corporation well. In just seven
years, the company more than doubled its total in-force insurance,
going from $29 million in 1941 to $59 million in 1948, with 10,700
policies in 12 counties. With business prospering, the company
relocated again, this time to its own office building at 130 West
Tuscola Street.

New innovations kept the business growing. The company issued
the first non-assessable policies in 1952, which meant that
policyholders did not pay when others had a loss, but rather paid
premiums up front and relied on the company to pay loss claims.
The company was one of the first in Michigan to begin writing fire
and related insurance lines on farm, commercial and dwelling risks,
and introduced a combination fire and windstorm policy.

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1940s—Frankenmuth Mutual Fire Insurance
Company office, at 112 South Main. Pictured
from left to right: Arnold C. Nuechterlein, Irene
(Reichle) Szymanski, Lydia (Geyer) Ruff, Lorna
(Schreiner) Bernthal. This location is now
home to Gill-Roy’s Hardware.

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1940s—Cars and horses share
the road on Main Street after a
blizzard. Geyer Brothers Brewery
Company is in the background,
and Star of the West Milling
Company is to the left.

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A new business hits the road

Fifty-two years after the association began, another company was born
in Frankenmuth: the Frankenmuth Mutual Auto Insurance Company.

It was 1920, and though the town’s horses were a long way from being put out to
pasture, more and more of Frankenmuth’s citizens owned automobiles. Many of
these were insured by a company in Bay City, 30 miles north of Frankenmuth.

When the Bay City company went bankrupt, a group of car owners—including
Carl Nuechterlein—formed a committee to discuss creating an auto insurance
company. In September of 1921, the Frankenmuth Mutual Auto Insurance
Company was organized. A board of directors was named, which in turn elected
the company’s first officers, including Leonard Reichle as President, Carl Ortner
and Bernhard Schaefer as Vice Presidents, and the ever-present Carl Nuechterlein
as Secretary-Treasurer, who was designated to actively manage the company.

Regulations required that the company have 200 subscribers before it could
issue its first policy. The Board of Directors became the company’s first agents,

and by March of 1922, the 200 subscribers were enrolled. The first
official policy was issued to John A. Geyer on a Dodge Brothers

car, for a premium of $7.50 (plus a $1.00 policy fee). Geyer was a
company founder and also served on the Board of Directors.

The modest conservatism which had marked the beginnings of the association
was a hallmark of this new company as well. The commission paid to agents was
$1 per policy. The company’s office, like the office of the association, was housed

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in a room of Carl Nuechterlein’s mortuary, for which he was paid $1 a month in rent. And
for the first ten years of business, the company insured vehicles only in Frankenmuth and
surrounding rural areas. City dwellers, vastly more likely to be involved in auto accidents,
were judged to be a riskier investment.

By 1930, the company had over 3,000 policyholders
and a surplus of more than $80,000, which prompted
directors to relax the restriction on “city folk.” Policies
were soon being written for drivers as far as 30 miles

away in Bay City and Flint.

FUN FACT: Growth continued throughout the 1930s and ’40s.
The late 1940s were especially eventful:
A 1923 Dodge Brothers
car owned by John A. Geyer, 1945: The auto company issued its first non-
insured on the company’s first assessable policies, permitted by the Insurance
auto policy, is on display in Commission after an examination of the company’s
financial health.
the corporate
offices.

1948: The company was reincorporated, and its
charter was expanded to include coverage for comprehensive personal liability, family
liability and farm liability, which prompted a name change — the word “auto” was
dropped, marking the first use of Frankenmuth Mutual Insurance Company, the legal
name still in use today. Also in 1948, the company reached $1 million in assets.

1949: The company moved into its own home office building at 140 West Tuscola
Street — right next door to the Frankenmuth Mutual Fire Insurance Company.

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Neighbors joining neighbors: the 1958 merger

They grew up in the same town. Their work brought them to the same counties. It was
probably inevitable that the two companies would come together to form one big happy
family.

It was a match made in heaven: The Frankenmuth

Mutual Fire Insurance Company was the second

largest company of its kind in Michigan, with over

16,000 policyholders and 50 agents. Their next-door

neighbor, the Frankenmuth Mutual Insurance Company,

provided auto and casualty insurance to over 40,000

policyholders and had 110 agents. And Carl Nuechterlein

served on the boards of both companies.

FUN FACT:

Merging the two companies allowed for new efficiencies, The company’s
home office would be expanded

since both businesses had many common policyholders. By working four times, in 1973, 1980, 1994 and
2008, and still serves as the
together, they were able to lower costs and provide better service
company’s home office

to all their customers. The merger became effective December 31, 1958. today.

The new corporation, with combined assets of $6 million, chose the name of the

Frankenmuth Mutual Insurance Company.

Milestones of the 1960s and ’70s

1960: The newly merged company moved into a new headquarters designed specifically
for the operation, with two levels of 12,000 square feet each and architecture incorporating
the diamond shapes in the company logo.

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1968: Frankenmuth Mutual acquired the business of the Michigan Mutual Hail Insurance
Company of Lansing, to begin offering protection against crop damage.

1970–1975: Continuing to expand geographically, the company extended its operations to
Indiana, Ohio and Wisconsin.

Throughout the 1970s: The company was successful in its efforts to diversify the
business, as the increasing costs of repair parts, labor and medical fees negatively affected
the auto insurance portion of the company. By growing the property and commercial lines,
the company became stronger financially.

Making the grade in the 1980s and ’90s

The company’s emphasis on conservative underwriting practices and prudent financial
management paid off with increased growth, and an A+ “Superior” rating from A.M. Best
every year of the ’80s and ’90s. The company developed new products and expanded
commercial lines, with policies tailored to meet the needs of the burgeoning commercial
market.

Rave reviews kept coming, as multiple rating services gave the company the insurance
equivalent of “two enthusiastic thumbs up.” In 1991, Frankenmuth Mutual not only
maintained A.M. Best’s A+ rating, it was also recognized by Ward Financial Group as one
of the Top 50 property-casualty insurers in the United States (an honor the company has
earned 15 times), was given an A” (Double Prime — Unsurpassed) rating by Demotech,
Inc., and earned an A+ (Excellent) from Weiss Ratings, LLC.

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Throughout the ’90s, research and innovation 1999—The former
in product design and customer service helped First of America
Frankenmuth Mutual continue to thrive, while Bank building on
continued investment in automation kept Main Street became
improving efficiencies. A $14 million expansion the home of the
of the home office was completed in 1994 to Claims Department.
make room for the growing company. By the
end of 1995, the company had direct written
premiums exceeding $150 million, and in
the late 1990s, the company began writing
insurance policies in Illinois and Virginia.

The expansion of the home office wasn’t
enough to keep pace with the company’s
rapid growth. So, in 1998, Frankenmuth
Mutual bought the First of America Bank
building on Main Street, renovated it,
and made it the new home of the Claims
Department in 1999. Also in 1999, two wholly owned subsidiaries
were formed to help the company expand into new states:
Ansur America Insurance Company and Fortuity Insurance
Company. ASure Worldwide Insurance Company was added in
2002 to continue the geographic expansion.

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Notable Neighbors Frankenmuth Insurance Chief Executive Officers

Over 150 years, many While the title “Chief Executive Officer” was not officially used until
extraordinary neighbors 1968, each of these men served as the head of the company during
have worked together to different eras of its development.
make Frankenmuth Insurance
the company it is today. It’s Note that three generations of the Nuechterlein family headed
impossible to thank every one the company, beginning with Christoph Nuechterlein in 1896.
of them, but here the company Carl Nuechterlein, Christoph’s son, was a pivotal figure in Frankenmuth
honors the names that loom Insurance history. He helped organize the Frankenmuth Mutual Auto
largest in its history. Insurance Company in 1921 and served as Secretary (CEO) for both
companies before they merged in 1958. Carl was succeeded by his son,
Arnold Nuechterlein.

Johann Adam List Johann Georg Rummel Christoph Nuechterlein Carl Nuechterlein Arnold C. Nuechterlein

Years served: 1868–1874 Years served: 1875–1896 Years served: 1896–1925 Years served: 1921–1959 Career at Frankenmuth
Insurance: 1935–1982
Years served as Secretary (CEO) of
Frankenmuth Fire: 1925–1941 Years served as Secretary
(CEO) of Frankenmuth Mutual
Years served as Secretary (CEO) Fire: 1941–1958
of Frankenmuth Mutual Insurance
(pre-merger): 1929–1954 Years served as President of
Frankenmuth Mutual
Years served as President of (post-merger): 1959–1968
Frankenmuth Mutual
(post-merger): 1958–1959 Years served as CEO
(post-merger): 1968–1976
Years served as Chairman of
the Board of Frankenmuth Mutual Years served as Chairman of
(post-merger): 1959-1968 the Board (post-merger):
1968-1978

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A fourth generation, attorney Christopher Nuechterlein, served on the board of directors
from 1976 to 2000.

The Michigan Insurance Hall of Fame

These Frankenmuth Insurance officers were inducted into the Michigan Insurance Hall
of Fame, which recognizes individuals making a significant contribution or special impact
on the ability of the insurance industry to serve the public in Michigan.

• Harvey E. Kern, Chairman of the Board and CEO — Inducted in 1997
• Morrall M. Claramunt, Executive Vice President and Secretary — Inducted in 2004
• James E. Wilds, Senior Vice President — Inducted in 2010

Norman Felgner Arnold M. Krueger Harvey E. Kern Gerald L. Stanton John S. Benson

Career at Frankenmuth Insurance: Career at Frankenmuth Career at Frankenmuth Career at Frankenmuth Career at Frankenmuth
1929–1981 Insurance: 1949–1983 Insurance: 1960–2001 Insurance: 1966–2012 Insurance: 1996–Present
Years served as CEO:
Years served as Secretary (CEO) of 1976–1978 Years served as CEO: Years served as CEO: Years served as CEO:
Frankenmuth Mutual (pre-merger): 1978–1996 1996–2008 2008–Present
1954–1958 Elmer P. Simon
Years served as Chairman of Years served as Chairman of Years served as Chairman of
Chairman of the Board the Board: 1987–2001 the Board: 2001–2012 the Board: 2012 to Present
from 1978–1987.

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Being good neighbors

The founding of the company was based on neighbor helping neighbor. And FUN FACT:
that tradition continues. Over the years, the company has contributed to In 1996, when
various community and industry causes, such as schools, universities, a tornado hit Frankenmuth
community projects and United Way, which remains a major fundraising and cut off power at headquarters,
project each year. Additionally, officers and employees regularly give their time company adjusters went door to door
in a golf cart to find
policyholders

in need.

and talents in many volunteer positions, including city and statewide committees,

local fire departments, Habitat for Humanity, and civic groups of all kinds.

In 1992, the company began its Student Associate program, which gives internships to
promising college students seeking to learn more about the insurance industry.

In 2009, the company created an endowed scholarship at Olivet College, with similar scholarships
created at Northwood University in 2016 and Ferris State University in 2017. The scholarships
give preference to students studying insurance and risk management, but are also available to
other majors employed in the insurance industry, such as IT, marketing and accounting.

In 2016, Frankenmuth Insurance created the Insurance Leadership Academy in partnership
with Northwood University, the Tuscola County Intermediate School District, Frankenmuth

Public Schools and InsuringMIFuture.org,
to introduce high school students from
surrounding communities to the
insurance industry.

In 2017, the company created the
Frankenmuth Insurance Foundations,
three separate foundations dedicated

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to preparing students for careers in the insurance industry, 2017—Employees
providing scholarship grants and contributing to charitable volunteering at
organizations in the communities where it does business. the Auto Fest Big
Block Party.
Frankenmuth Insurance has a longstanding commitment to
ongoing education of its employees, and provides convenient
opportunities to participate in clubs like Toastmasters,
Chartered Property Casualty Underwriters and International
Association of Insurance Professionals.

Independent agents: Some of our most important neighbors

Without the independent agents who represent Frankenmuth Insurance, the
company would not have expanded beyond its home town. The company’s agency
partners have helped Frankenmuth Insurance grow and prosper beyond the original
founders’ expectations. When the company began in 1868,
the members themselves spread the word about
the association. By 1941, the company had 12
agents. Today it is represented by 600 independent
insurance agencies in 15 states.

Frankenmuth Insurance is extremely proud of the
longstanding relationships it has with the highest quality agency partners.
Some, such as Seelbinder Agency, appointed in 1928, have represented the
company for 75 years or more. The company is selective, choosing only the
most professional and trustworthy agents, and then
working to build strong relationships that stand the test of time.

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Taking advantage of technology

Frankenmuth Insurance has always had a conservative business
philosophy, but when it comes to taking advantage of technological
innovations, the company has never been afraid to step forward with
the times — especially when the result is improved
customer service.

The company’s earliest records were handwritten,
and then later typed. By the late 1970s and early
1980s, computer terminals were used for the entry
of some statistical data, but it was a slow process
by today’s standards, and one row of terminals
was shared by the entire company. When a
special light was on over the row of terminals,
the system was unavailable. When this light
turned off, a stampede of workers bolted for
the row to get their chance to enter data.

By the 1990s, there was a personal
computer at every work station, which made
data entry far easier and more efficient (though perhaps less
aerobic!). By the late 1990s, electronic document imaging further
streamlined the system and helped the company go paperless.
Also in the ’90s, agencies were able to download policy information
directly from the company for the first time, improving efficiency

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and customer service. And, Interactive Voice Response allowed agents and
policyholders to get billing information by phone.

The agency automation begun in the 1990s continued into the 2000s with the
introduction of the iBIS new business system, which allows agency partners
to perform real-time rating and automated insurance
solutions over the Internet, 24 hours a
day, seven days a week.

Continuing the quest for greater
efficiency, in 2014 the Board of Directors
approved a five-year project to replace the
core operating systems used by the company
and its agents to quote business, write
policies and pay claims.

The company continues to seek out new
technological innovations that will make
service faster, more accurate and more efficient
(for example, the company acquired three drones
in 2017 to help inspect loss claims more safely).
These days, no records are stored in a coffin in the
back room of a mortuary.

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New millennium, new neighbors

The company’s efforts to stay at the forefront of technology in the insurance industry
were ready to pay off. For both agency partners and the company as a whole,
the new technology meant greater speed and accuracy, reduced expenses and
enhanced productivity. The result: direct written premium soared from $269 million
in 2000 to almost $364 million in 2005.

The company was licensed in 37 states, but as of 2000, was doing
business in only six: Michigan, Illinois, Indiana, Ohio, Virginia and
Wisconsin. It became a company goal to not only increase business in those
states, but also to expand into others. From 2004 to 2006, the company
began writing commercial lines products in Georgia, Tennessee, North Carolina
and South Carolina. In 2009, Kentucky and Alabama were also added.

While moving south, the company also looked to the northeast to meet some
new neighbors. A merger with Patriot Mutual Insurance Company, a personal lines
property and casualty insurer, occurred in July 2007. During this time of growth and
change, the company adopted the logo that is in use today and began calling itself
simply Frankenmuth Insurance. Similarly, Patriot Insurance Company was adopted as
the subsidiary’s business name.

New life for the company

Patriot Insurance does business in Maine, New Hampshire and Vermont, and also
had a small dormant life insurance subsidiary, Patriot Life Insurance Company.
In 2010, Patriot Life was relocated to Michigan, and issued its first policy on
December 6, 2010.

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November 2017—
Patriot Insurance
unveiled its new
34,500-square-foot
headquarters in
Yarmouth, Maine.

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2013 —Taken after the
company was given the
PIA National Company
Award of Excellence.

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Recent history — and a promising future

2015: The company welcomed the Claims Department back to
the main headquarters. After a 50,000-square-foot expansion of
the headquarters building in 2008 and increasing ranks of remote
employees, there was plenty of room for continued growth.
Also in 2015, the company launched a corporate branding initiative,
using the tag line, “Let’s have a frank conversation.” The tag line not
only reminds consumers of the company name, it also conveys the
way it has always done business — with straightforward candor and
personal service.
2016: Always looking for new opportunities to grow, Frankenmuth
Insurance extended its product line into surety bonds with the
creation of Frankenmuth Surety. The new division provides a wide
array of construction, commercial and subdivision bonds, and is
approved by the U.S. Department of Treasury.
Ground was broken in 2016 for a new Patriot Insurance Company
headquarters in Yarmouth, Maine; the company moved into the new
building in November 2017.
In 2017, Frankenmuth Insurance was named to Ward’s Top 50
(property and casualty) for the 15th time.

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2018 and beyond

Frankenmuth Insurance looks forward to the future with anticipation,
knowing the company will embrace it with the same values its founders
did: a concern for their neighbors, a willingness to venture into new
territory, and the wisdom to preserve and expand the operation for
future generations.

These ideas have guided the company to financial
strength and steady growth through the last 150
years. From the back room of Nuechterleins’
mortuary with just 200 charter members,
Frankenmuth Insurance now writes 325,000
policies per year representing nearly $700 million
in premium. It is ranked among the largest and
most stable property-casualty companies with
more than $1.5 billion in assets, and continues to
bring peace of mind to its policyholders.

It is this ability to succeed while remaining firmly committed to its
principles — the simple desire to do right by its neighbors — that is the
foundation of the company’s success. Neighbor helping neighbor. It’s not
just a slogan. It’s the way Frankenmuth Insurance has done business
since 1868.

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1 Mutual Avenue, Frankenmuth, MI 48787
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