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Financial Information

Financial Information for National Guardian Life Insurance Company.

2016 Annual Report for National Guardian Life Insurance Company

  • Report from the President
  • Summary of Financial Position
  • Liabilities, Capital and Surplus
  • Summary of Operations
Mark L. Solverud
President & Chief Executive Officer
2016 was a record year for National Guardian Life Insurance Company (NGL) and its subsidiaries from a sales standpoint. Total sales for 2016 were $732 million, which was an increase of 5% over 2015. Our sales were up in all areas except one, as described in more detail below. The 2016 sales results contributed to the growth of the consolidated statutory assets to $4.1 billion as of the end of 2016. We have doubled our asset size in the past 8 years.
Our largest area from a sales standpoint is our preneed line. "Preneed" refers to life insurance used to fund pre-arranged funeral contracts. Sales in this line for 2016 were $456 million which was slightly below our 2015 sales of $459 million. This is a somewhat disappointing result but may reflect the maturing of our market share in a marketplace that is not rapidly growing. Demographics in the U.S. are positive for the preneed industry in the next several decades, but the rapid growth in cremations versus traditional burials has been and will continue to be an offsetting factor relative to preneed sales volume.
We achieved very good sales in our Individual Life & Annuity (ILA) line of business coming in at $88 million. This was up by 22% over 2015. Our sales consisted primarily of single-premium life insurance, but also included $16 million of single premium immediate annuities due to a product we introduced in 2016. Both of these products assist seniors in their estate planning. In the future we anticipate offering other types of products that will have broader applicability.
Sales of final expense products through our subsidiary Settlers Life Insurance Company totaled $12.9 million, which is an increase of 21% over 2015. "Final expense" refers to basic insurance coverage to individuals to help offset funeral and other end-of-life expenses. This growth is on track with our longer range plan to achieve sales of $20 million in 2020, while maintaining the profitability of the new business we are writing.
Sales in our Group Markets area (group accident and health) totaled $175 million, an increase of 9% over 2015. Over $100 million of this business is group dental and vision coverages sold through workplaces. Another $70 million is student accident and health business marketed by Commercial Travelers Mutual Insurance Company, an affiliate of NGL located in Utica, New York. Various other product types are being pursued or considered as we expand our market reach and diversification.
In 2015 NGL acquired the individual life and annuity business of Madison National Life Insurance Company (MNL), also located in Madison, WI, which included the hiring of over 60 employees associated with that business. In 2016 significant progress was made in combining the organization and operation we acquired with what previously existed at NGL. The former MNL office, however, has been maintained by NGL since we lack the space to incorporate those employees into NGL's main office in Madison. Between the two locations we have 380 employees in the Madison area. We have another 80 in Bristol, VA where our final expense operation is located, and 45 in Utica, NY where our student health operation is located, for a total that now exceeds 500 employees.
On a consolidated statutory basis, NGL had a net gain in 2016 of $24.9 million which was a pleasing result given the pressure that low investment rates continues to place on our operating performance. As a result, capital and statutory surplus rose 7% to $325 million as of year-end. This is a very secure level given the group's size, asset quality, and business mix. These key financial indicators reflect a financially strong company, as does NGL's A- (Excellent) rating from A.M. Best Company, the leading provider of ratings and financial data for the insurance industry.
We are very grateful for all of those who helped contribute to our results in 2016. This includes our dedicated employees, our marketing partners, and the thousands of agents who sell our products. Most importantly we thank each and every policyholder for their business and the trust they have placed in us.

Summary of Financial Position

Consolidated Statutory Basis (in thousands)

Assets

2016

2015

Bonds $3,350,632 $3,037,209
Mortgage Loans $108,118 $123,833
Cash and Short-Term Investments $204,765 $236,343
Other Invested Assets $233,595 $255,842
Other Assets $154.117 $149,337
Total Assets $4,051,227 $3,802,564
Liabilities, Capital and Surplus
Consolidated Statutory Basis (in thousands)
 
 

2016

2015

Total Revenue $924,128 $1,140,887
Policy Benefits $642,244 $871,283
Commissions and Operating Expenses $235,008 $277,513
 
 

2016

2015

Net Gain Before Income Taxes $46,876 $(7,909)
Income Taxes $21,922 $10,536
Net Gain from Operations $24,954 $(18,445)
Capital Gains (Losses) $(40) $6,288
Net Income $24,914 $($12,157)

Basis of Presentation: These statements reflect management's presentation of the consolidated financial condition of NGL and its results of operations in accordance with statutory accounting principles.

NGL's Financial Strength

Read and download our Financial Report for the year of 2016.

Read about NGL's Financial Strength here.

GAAP Results

View and download our GAAP Net Income and GAAP ROE results for the year of 2016.

Review our GAAP Results here.

Annual Report

Read and download our Annual Report for the year of 2016.

Read NGL's Annual Report here.