NEW YORK--(BUSINESS WIRE)--New York Life Insurance Company, America’s largest mutual life insurance company1, announced an 11 percent increase in 2013 operating earnings to a record $1.76 billion, driven by strong performances in both its Insurance and Agency and Investments businesses. The company’s record surplus and asset valuation reserve, which reached $21.1 billion in 2013, coupled with the company’s earnings performance, provides confidence and safety for New York Life’s policyholders, who hold a combined $840 billion of life insurance face value, another new high. The company achieved all time highs in sales of insurance, annuity and investment products through its primary distribution channel, a national field force of New York Life agents.
Chairman and CEO Ted Mathas said, “Looking at the company’s unprecedented earnings and surplus on one hand, and our record payout of benefits and dividends on the other, validates our success in doing what we as a mutual company do best: deliver long-term policyholder value. We have never been stronger as a company, and our ability to bring peace of mind to millions of people through that financial strength reflects the tremendous dedication of our agents, employees and partners. For those looking to safeguard the financial future for themselves and their loved ones, it’s never been a better time to rely on New York Life.”
Dividends Paid to Policyholders Every Year Since 1854
Mr. Mathas continued, “Our strong operating performance has enabled the company to increase the dividend being paid to our participating policyholders in 2014 by 8 percent, the second year in a row we have increased the dividend by more than $100 million. We are the only large mutual life insurer to raise the dividend by more than $100 million in each of the past two years .2 This is the 160th consecutive year New York Life has paid a dividend to policyholders, a validation of mutual strength since 1854 and a reflection of our singular focus on creating value for our customers. But perhaps the most important measure of our commitment to policyholders is the $8.6 billion in benefits and dividends we provided last year, money that millions of people relied on to navigate these uncertain times and to help protect their financial dreams.”
Record Earnings Reflect Strength of Business Model and Operations
Operating earnings, the company’s measure to track profitability from ongoing operations, grew 11 percent in 2013 to $1.76 billion. This marks the fourth consecutive year in which earnings have achieved a new historical record. “The powerful combination of our mutual company business model, career agency system, market-leading life insurance business and large-scale asset management operation has enabled the company to thrive in the aftermath of the worst financial crisis since the Great Depression,” Mr. Mathas said. “Specifically, robust growth within our Investments business, which includes annuities, mutual funds, institutional asset management and retirement planning services, contributed significantly to our financial strength and to our increased dividend payout to participating policyholders in 2014.”
Strong Surplus Means Safety for Our Policyholders
New York Life achieved 8 percent growth in surplus and asset valuation reserve in 2013, a primary measure of financial strength, reaching a record high of $21.1 billion – the highest surplus among mutual life insurers.2 Mr. Mathas said, “Whether the guarantees we provide are needed tomorrow or 20 years from now, our balance sheet shows a level of financial strength that says: you can depend on us no matter what.” Mr. Mathas also noted the value New York Life policyholders place on surplus and asset valuation reserve: “Peace of mind comes from doing business with a life insurance company that maintains the highest possible financial strength ratings given to life insurers by the major rating agencies – and we are proud of our record in that area.”
Record Agency Sales Drive Business Growth; AUM Leaps 12 Percent
The company’s career agency system of more than 12,000 agents nationally delivered record sales in 2013, a primary contributor to the company’s strong financial results. Individual recurring premium life insurance sales through agents grew 5 percent over 2012, while total annuity sales through agents were up 14 percent over 2012. Sales of long-term mutual funds through agents increased 16 percent over the prior year, driven by consistent investment performance across the fund family. “The core of our business, comprised of guaranteed products such as life insurance and income annuities, continues to appeal to those seeking financial protection, while our investment products, with their strong track record and long-term approach, appeal to individual and retail investors seeking to grow and preserve capital,” said Mr. Mathas. Assets under management for New York Life in total increased 12 percent in 2013 to $425 billion.
Review of Businesses
Insurance and Agency Group
The Insurance and Agency Group features the company’s life insurance business in the United States, which has been the core business of New York Life since its founding in 1845, and the company’s career agency system of 12,000 licensed agents in cities and towns across the United States. The Group also includes the supplemental distribution channels for the U.S. life business: the direct response business in Tampa, FL, which is the leading direct marketer of life insurance in the U.S. through an endorsed program with AARP geared to its membership; and the Group Membership Association business, which is the largest underwriter of professional association insurance programs in the U.S., covering members of more than 500 associations across the country. New York Life’s life insurance operation in Mexico, Seguros Monterrey New York Life, is the second largest life insurer in the country. Since it is strategically and geographically aligned with the company’s core U.S. life business, Seguros Monterrey is also part of the Insurance and Agency Group.
In 2013, $5.4 billion in benefits and dividends was paid out to the Group’s life insurance policyholders.
Investments Group
The Investments Group includes all of the asset management businesses of New York Life, and ranks among the world’s largest asset management firms.3 With $411 billion in assets under management as of December 31, 2013, the Investments Group provides investment management services to institutional and retail clients, offers retirement plans to corporations, multi-employer trusts and individuals, and delivers annuities and guaranteed products to both the qualified and non-qualified markets. By employing a successful multi-boutique approach, the Group continues to produce excellent risk-adjusted performance in managing the majority of New York Life’s general account, which stands at $188 billion in cash and invested assets.
New York Life Investments offers retail mutual funds through its MainStay Funds family. In 2013, the Group set new sales records for MainStay mutual funds – $31.25 billion for the year – led by strong continued growth and record sales in the third party market, as well as record sales through New York Life agents. In February, Barron’s, the business and financial weekly of Dow Jones, once again recognized the MainStay Funds for delivering long-term results – naming MainStay a Barron's Top Fund Family.4
On the annuity side, New York Life continued to lead the industry in providing guaranteed lifetime income, with a 33 percent market share in fixed immediate annuities and 40 percent of the market for deferred income annuities, according to an industry source.5 The Group’s other popular solutions include fixed deferred annuities and variable annuities.
More Agency Highlights from 2013
In addition to Agency’s accomplishments noted above, here are additional key highlights:
- The company hired 3,460 full-time agents last year, continuing its strong trend of hiring in recent years. Since 2007 the company has grown its active agent force by 19 percent. In 2013, 62 percent of New York Life’s new hires in the field were women or individuals who represent the cultural markets.
- New York Life continued its leadership of the MDRT6 for the 59th consecutive year. The company had 2,228 agents achieve this recognition in 2013, about one-quarter of New York Life’s active field force in the United States. New York Life also led the industry in the number of women agents qualifying for MDRT in 2013. Impressively, New York Life has one out of every five MDRT qualifiers in the industry overall, and one in every three women qualifiers.
About New York Life
New York Life Insurance Company, a Fortune 100 company founded in 1845, is the largest mutual life insurance company in the United States* and one of the largest life insurers in the world. New York Life has the highest possible financial strength ratings currently awarded to any life insurer from all four of the major credit rating agencies: A.M. Best (A++), Fitch (AAA), Moody’s Investors Service (Aaa), Standard & Poor’s (AA+).** Headquartered in New York City, New York Life’s family of companies offers life insurance, retirement income, investments and long-term care insurance. New York Life Investments*** provides institutional asset management and retirement plan services. Other New York Life affiliates provide an array of securities products and services, as well as retail mutual funds. Please visit New York Life’s website at www.newyorklife.com for more information.
*Based on revenue as reported by “Fortune 500 ranked within Industries, Insurance: Life, Health (Mutual),” Fortune magazine, May 20, 2013. For methodology see http://money.cnn.com/magazines/fortune/fortune500/2013/faq/?iid=F500_sp_method%20.
**Individual independent rating agency commentary as of 2/3/14.
***New York Life Investments is a service mark used by New York Life Investment Management Holdings LLC and its subsidiary, New York Life Investment Management LLC.
| 1 See final page for details of Fortune 500 ranking. |
| 2 Based on publicly available information on New York Life’s peer mutual U.S. life insurers. This peer group is comprised of major mutual U.S. insurance companies for whom life insurance is the primary focus and primary line of business, and whose financial information is made publicly available. |
| 3 Source: New York Life Investments ranked 29th among the world’s largest money managers in Pensions & Investments, May 27, 2013. Rankings are based on total worldwide institutional assets under management for the year-end 2012. New York Life Investments assets include assets of affiliated investment advisors. |
| 4 Source: Barron’s, February 10, 2014. Overall, MainStay Funds ranked number 28 for the one-year period, 22 for the five-year period, and 7 for the 10-year period ended December 31, 2013, out of 64, 55, and 48 fund families, respectively. MainStay ranked number 56 for the one-year period, 20 for the five-year period, and 1 for the 10-year period ended December 31, 2012, out of 62, 53, and 46 fund families, respectively. MainStay ranked number three for the 10-year period in 2009, 2010, and 2011 from among 48, 46, and 45 fund families, respectively. MainStay ranked number 6 among 48 fund families for the 10-year period in 2008. Past performance is no guarantee of future results, which will vary. Please visit www.mainstayinvestments.com to view the prospectus or summary prospectus, which contain the investment objectives, risks, fees and expenses, and other information you need to consider before investing. |
| 5 Source: LIMRA, U.S. Individual Annuity Sales Survey, Participants Report, Fixed Immediates and Deferred Income Annuities, Fourth Quarter 2013 results. (Fixed Immediates include Fixed Period Annuities.) Annuities are primarily issued by New York Life Insurance and Annuity Corporation, a wholly-owned subsidiary of New York Life Insurance Company. |
| 6 Million Dollar Round Table, the premier association of financial professionals, is an organization that recognizes excellence in the life insurance industry. |
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New York Life Insurance Company |
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2013 Financial Highlights (in millions) |
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2013 |
2012 |
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| Operating Earnings1 | $ | 1,764 | $ | 1, 586 | ||||
| Surplus and Asset Valuation Reserve2 | $ | 21,141 | $ | 19,613 | ||||
| Policyholder Benefits and Dividends3 | $ | 8,622 | $ | 8,099 | ||||
| Insurance Sales4 | $ | 1,194 | $ | 1,149 | ||||
| Investment Sales5 | $ | 62,998 | $ | 50,486 | ||||
| Assets Under Management6 | $ | 425,139 | $ | 378,432 | ||||
| Individual Life Insurance In Force7 | $ | 840,455 | $ | 816,361 | ||||
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| 1 Operating earnings is the measure used for management purposes to track the Company’s results from ongoing operations and the underlying profitability of the business. This indicator is based on accounting principles generally accepted in the United States of America (GAAP) with certain adjustments we believe are more appropriate as a measurement approach (non-GAAP). |
| 2 Statutory surplus and the asset valuation reserve (“AVR”) is shown on a consolidated basis of the Company. |
| 3 Policyholder benefits primarily include death claims paid to beneficiaries and annuity payments. Dividends are payments made to eligible policyholders from divisible surplus. Policyholder benefits and dividends reflect the consolidated results of New York Life Insurance Company and its domestic insurance subsidiaries. Intercompany transactions have been eliminated in consolidation. Dividends are not guaranteed. |
| 4 Insurance sales represent annualized first-year premium on participating issued whole life insurance, term life insurance, universal life insurance, long-term care insurance and other health insurance products. A sale is generally counted when the initial premium is paid and the policy is issued. Adjustments are made to reflect the relative importance of certain sales, primarily: single premium sales sold through our Agents and Advanced Markets Network (AMN) retail distribution channel, our network of independent agents and brokers, are counted at 10 percent. Sales are generated from both domestic and Mexican operations. Agency Recurring Premium Life Insurance Sales refers to those products that are sold through our career Agent force and require premiums to be paid every year. 2012 has been adjusted to conform with our 2013 presentation. |
| 5 Investment sales include immediate fixed annuities (Guaranteed Lifetime Income), our flexible premium deferred income annuities (Guaranteed Future Income), deferred annuities (both fixed and variable), mutual funds and third-party asset management funds. |
| 6 Assets Under Management represents consolidated domestic and international insurance operations assets (cash and invested assets and separate account assets) and third-party assets principally managed by New York Life Investment Management Holdings, LLC, a wholly-owned subsidiary of New York Life Insurance Company. 2012 has been adjusted to conform with our 2013 presentation. |
| 7 Individual life insurance in force is the total face amounts of individual life insurance contracts (term, whole life, and universal life) outstanding for the Company and its domestic insurance subsidiaries at a given time. |
The New York State Department of Financial Services recognizes only statutory accounting practices for determining and reporting the financial condition and results of operations of an insurance company. The separate statutory financial statements (including assets, liabilities, and surplus and AVR) for our insurance companies, as well as a copy of the GAAP basis consolidated financial statement and a detailed reconciliation to our non-GAAP performance measure (i.e. Operating Earnings) are available on our website, www.newyorklife.com. Copies of these items are also available by contacting the Secretary of New York Life Insurance Company, 51 Madison Avenue, New York, NY 10010.