NEW YORK--(BUSINESS WIRE)--Driven by a field force of 12,000 professional agents who led the company to its seventh straight year of record insurance sales, New York Life Insurance Company announced another year of excellent financial performance for 2015. The company set all-time highs in dividend payouts to participating policyholders and policyholder benefits while also reaching a record level of surplus and asset valuation reserve, a common measure of a company’s financial safety. Together, these results demonstrate the ability of the mutual company model to deliver exceptional value to policyholders even in challenging operating environments.
A Proven Strategy Drives Record Breaking Results
“Our financial performance in 2015 validated once again the foundational strategies we have adhered to for decades – our commitment to mutuality, a focus on whole life, unsurpassed financial strength and most of all, the steady, strategic investments in our agents and their professional development,” said Chairman and CEO Ted Mathas.
“But the most important performance measure of all is how much value we delivered to policyholders, which reflects our mutual company’s true purpose. Here, we couldn’t be more pleased with the record dividends and record benefits we provided in 2015 to millions of families and businesses who rely on us, reflecting tuitions paid, mortgages maintained, retirement dreams fulfilled and promises kept.”
Added Mr. Mathas, “There’s no better choice when it comes to financial peace of mind than New York Life, and we are grateful to the families and businesses who place their trust in us.”
Backed by Superior Operating Performance, Dividends Up 37 Percent since 2012
Last year New York Life increased dividends being paid to our eligible participating policyholders in 2016 to a new high of $1.7 billion. Since 2012 New York Life has increased the dividend payout by 37 percent. Together with benefits paid to our policyholders, New York Life’s total payment to policyholders in 2015 totaled $9.8 billion.
At the same time, New York Life remains one of only two companies to receive the highest possible financial strength ratings currently awarded to life insurers from all four major rating agencies. For 2015 surplus and asset valuation reserve grew by $800 million to $22.7 billion, a record high.
Key to these achievements was another year of superior operating earnings, which for 2015 totaled $1.9 billion, second only to 2014’s $2.0 billion in the company’s history. This performance reflects the benefits of a diversified earnings profile that complements the company’s core business of participating life insurance.
Review of Businesses
Insurance and Agency Group
The Insurance and Agency Group includes 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 2015 the company achieved life insurance sales of $1.3 billion, a new record. Total life insurance in-force reached a new high of $923 billion.
New York Life is one of the few companies committed to growing a career agency system as its primary distribution model. Since 2007, the company has grown its active agent force by 28 percent, and for 61 consecutive years has had more agents qualify for the Million Dollar Round Table, which is recognized globally as the standard of excellence for life insurance sales performance in the insurance and financial services industry, than any other company.
The Insurance and Agency Group also includes New York Life’s life insurance operation in Mexico, Seguros Monterrey New York Life, one of the country’s largest life insurers.
Investments Group
New York Life Investments reported $510 billion in assets under management as of December 31, 2015. The Group, which is one of the world’s largest asset managers1; provides investment management services to institutional clients and retail investors through New York Life Investment Management, and manages the majority of the company’s general account, which stood at $218 billion in cash and invested assets at year end, a company record.
The Investments Group also includes the company’s annuity business, which delivers retail and institutional annuities to the qualified and non-qualified markets. For 2015, the Group reported retail annuity sales of $12 billion, a six percent increase. New York Life continued to lead the industry in providing guaranteed lifetime income, with a 20 percent market share in fixed immediate annuities and 32 percent of the market for deferred income annuities, according to an industry source.2
| 1 | Source: New York Life Investments ranked 26th among the world’s largest money managers within Pensions & Investments, May 18, 2015. Rankings are based on total worldwide institutional assets under management for the year-end 2014. New York Life Investments assets include assets of affiliated investment advisors. | |
| 2 | Source: LIMRA, U.S. Individual Annuity Sales Survey, Participants Report, Fixed Immediates and Deferred Income Annuities, Fourth Quarter 2015 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. | |
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. Other New York Life affiliates provide an array of securities products and services, as well as retail mutual funds. Visit www.newyorklife.com for more information.
Note: “New York Life” or “the Company,” as used throughout this release, can refer either separately to the parent company, New York Life Insurance Company, or one of its subsidiaries, or collectively to all New York Life companies, which include the parent company and its subsidiaries and affiliates.
*Based on revenue as reported by “Fortune 500 ranked within Industries, Insurance: Life, Health (Mutual),” Fortune magazine, 6/15/15. For methodology, please see http://fortune.com/fortune500/.
**Individual independent rating agency commentary as of 8/11/15.
***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.
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New York Life Insurance Company 2015 Financial Highlights (in millions) |
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| 2015 | 2014 | |||||||
| Operating Earnings1 | $ | 1,875 | $ | 2,024 | ||||
| Surplus and Asset Valuation Reserve2 | $ | 22,688 | $ | 21,937 | ||||
| Policyholder Benefits and Dividends3 | $ | 9,832 | $ | 9,076 | ||||
| Insurance Sales4 | $ | 1,269 | $ | 1,196 | ||||
| Annuity Sales5 | $ | 12,015 | $ | 11,289 | ||||
| Assets Under Management6 | $ | 528,197 | $ | 540,895 | ||||
| Individual Life Insurance In Force7 | $ | 923,434 | $ | 871,138 | ||||
| 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 metric 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). Operating earnings equal GAAP net income adjusted for, primarily, the removal of gains and losses from investments and related adjustment. | |
| 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 participating 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. 2014 has been adjusted to conform with our 2015 presentation. Universal life products are issued by New York Life Insurance and Annuity Corporation ("NYLIAC"), a wholly-owned subsidiary of New York Life Insurance Company. | |
| 5 | Total annuity sales represent premium income on our deferred annuities (both fixed and variable) and on our Guaranteed Income Annuities, which includes our immediate fixed annuity product and our flexible premium deferred income annuity product. Sales are generally recognized when premiums are received. Annuities are primarily issued by NYLIAC. | |
| 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 and assets under administration associated with only those agreements under which New York Life Investments receives a revenue share. | |
| 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 statements 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.
