Annual Report 2017
What Teamwork Means
Duration 1:04
Pan-American Life Insurance Group delivered a stellar performance in 2017. What we’ve accomplished speaks volumes about the company we are today and will be tomorrow.
I state that with confidence, because I have witnessed first-hand what can result from the collective effort and collaboration that permeates at all levels of our organization as well as in our work with our external business partners and the markets we serve. This powerful dynamic has truly allowed us to become one PALIG, aligned under the common vision of improving our policyholders’ sense of wellbeing, while becoming the leading insurance carrier in the Americas. And that exceptional teamwork shows.
PALIG has consistently delivered top-line revenue, premium and pre-tax operating income (PTOI) growth. In 2017 revenues grew 6.7 percent to reach a record $1.07 billion. Pre-tax operating earnings grew a strong 21.7 percent to $87.8 million. Net income for the year was $77.5 million, a 58 percent increase compared to 2016. Total assets now stand at $6 billion and total equity increased 14.5 percent to over $1 billion.
We exhibited strong performance across business lines, registering a combined growth of 7 percent in new sales and 3 percent in total premium. International Group and U.S. Life led the way with double digit growth in sales over 2016. This level of performance can only be achieved through the consistent, integrated effort of all our functional areas working together towards a common goal.
When we embarked on our 5-year strategic plan in 2014, we set aggressive targets for the year 2018. We surpassed those targets two years ahead of schedule. As a result, we’ve reset our expectations, embarking on a new 5-year plan with an eye towards 2021. Our new plan builds on our current performance and our strengths as an organization, focusing on four core areas:
Pan-American Life Insurance Group is a leading provider of insurance and financial services throughout the Americas. Since 1911, the New Orleans-based Group has been delivering trusted financial services and currently comprises more than 20 member companies, employs more than 1,950 worldwide and offers top-rated individual and group life, accident and health insurance, and financial services in 49 states, the District of Columbia (DC), Puerto Rico, the U.S. Virgin Islands, and throughout Latin America and the Caribbean. The Group has branches and affiliates in Costa Rica, Colombia, Ecuador, El Salvador, Guatemala, Honduras, Mexico, Panama, and 13 Caribbean markets, including Barbados, Cayman Islands, Curacao and Trinidad and Tobago.
Pan-American Life Insurance Group offers:
Across our footprint in the Americas, our teams are executing on our vision of success. Their commitment to working together inspires our performance as a company and enhances the value that we add to our stakeholders.
2017 was another outstanding year for our U.S. Life business. Building on the value added in the 2015 merger with Mutual Trust, this line of business is helping PALIG maintain its balanced geographic and product distribution. Other highlights include:
We’re proud to say that Pan-American Life Insurance Company received an A (Excellent) rating from A.M. Best and an A (Strong) rating from Fitch Ratings; and that Mutual Trust Life Insurance Company is also rated A (Excellent) by A.M. Best. These ratings are strong endorsements of the financial strength that enables us to be there when our clients need us the most.
“Pan-American Life’s rating affirmations reflect the benefits derived from the company’s long-established presence and name recognition in Latin America and the U.S. Hispanic marketplace, as well as its improved balance sheet and income statement. The ratings also reflect Pan-American Life’s solid consolidated risk-adjusted capitalization, well-performing fixed-income investment portfolio and positive net operating performance.” – A.M. Best
"Pan-American's ratings reflect its very strong capitalization and relatively low-risk liability profile. The company’s strong balance sheet continues to be a key ratings driver with very strong capitalization and low leverage. The ratings also consider the successful integration of Mutual Trust, which has strengthened Pan-American's position in the U.S. life insurance market.” - Fitch Ratings
Over the course of our 107 year history we have learned many lessons about how we can best serve the people and communities that place their trust in us. Chief among those lessons is the impact of our collective power. When we work together we benefit from each other’s knowledge, empower each other to progress and most importantly, we enhance the company’s ability to deliver on the promise we make to our policyholders.
Pan-American Life’s corporate and in-country leadership teams nourish a collaborative culture that encourages every individual within the organization to play their part in bringing the company’s mission, vision and values to life every day.
Across the United States, Latin America and the Caribbean, our agents and brokers relish the challenge of setting themselves apart and representing their client’s best interests – always. Together, they epitomize all we can accomplish when we work together.
For more than 100 years, we’ve been known as people you can trust for life. Our teams across the Americas protect and strengthen that legacy with their commitment to delivering the best service to every client from the moment their application comes through the door.
In 2017, Pan-American Life’s affiliates in Panama and Guatemala turned 105 and 60, respectively. We also celebrated the 5th anniversary of acquisition in the Caribbean, Costa Rica and Panama. These important milestones are the result of an unwavering commitment to working together.
Teams that work well together achieve a greater impact and make a genuine difference in the lives of all those they touch. In 2017, our employees and producers across the Americas came together to make a meaningful difference in the communities they serve. With their generous support Pan-American Life Insurance Group partnered with organizations that share our commitment to community development, the arts, education and public safety.
2018 Key Initiatives and Vision
2017 was the beginning of a new phase for Pan-American Life as we began to implement our new strategic five year plan, with ambitious goals for 2021 and beyond. With mutual support and trust anchoring the efforts of our teams across all areas of the business, we are preparing Pan-American Life to continue building on its success.
Key business initiatives for 2018 include:
Chairman of the Board, President and CEO
President – U.S. Life Business; President and CEO, Mutual Trust Life Insurance Company
CEO - HolaDoctor
Vice Chairman of the Board, Head of Finance and Administration
President – International Group Business
Senior Vice President – Individual Health
Executive Vice President - General Counsel and Corporate Secretary
President - U.S. Group Business
Senior Vice President – International Country Management
Executive Vice President and Chief Investment Officer
President - International Life Business
Senior Vice President – Chief Financial Officer and Controller
Senior Vice President - International Business Technology and Operations
Vice President - Corporate Development
Vice President - Domestic Operations and Head of Product Development
Senior Vice President - Administration and Information Technology
Vice President - Corporate Actuary
Vice President - Financial Reporting & Planning
Senior Vice President - Human Resources
Vice President - Internal Audit
Vice President - Corporate Marketing
Chief Actuary and Risk Officer
Vice President - Tax
Vice President – International Group
Vice President - International Life Chief Underwriter – Latin America and the Caribbean
Vice President – International Healthcare
Country Manager – Mexico
Country Manager – Guatemala
Country Manager – El Salvador
Country Manager – Honduras
Country Manager – Costa Rica
Country Manager – Panama
Country Manager – Colombia
Country Manager – Ecuador
Country Manager – Puerto Rico
CEO – Caribbean
President - U.S. Life Business
CEO, Mutual Trust Life Insurance Company
Pan-American Life Insurance Group
Former Executive Vice President & Chief Operating Officer - Individual Life Business Unit
Liberty Mutual Group
Fellow of the Society of Actuaries and member of the American Academy of Actuaries
OAK BROOK, ILLINOIS
Financial Consultant
Former Adjunct Professor
Tulane University
Former Vice President, Controller & Chief Accounting Officer/
Louisiana Land and Exploration Company
Former Audit Manager
Peat Marwick Mitchell & Co. (now KPMG)
NEW ORLEANS, LOUISIANA
Retired President, Hesse Gas Company
Former Chairman of the Board
Enbridge Energy Partners, Former Chairman
U.S. Federal Energy Regulatory Commission
Assistant Secretary for Management and Administration U.S. Department of Energy
WINNEMUCCA, NEVADA
Owner & Managing Principal, ThirtyNorth Investments, LLC
Chairman
Ochsner Health System
NEW ORLEANS, LOUISIANA
Vice Chairman of the Board, Head of Finance and Administration
Pan-American Life Insurance Group
NEW ORLEANS, LOUISIANA
Former Vice Chairman
Jefferson Pilot Corporation
President
Life Companies Jefferson Pilot Financial
GREENSBORO, NORTH CAROLINA
Former Chairman
Unit Trust Corporation
Former Minister of Finance Trinidad
Former Managing Director
Credit Suisse
PORT OF SPAIN, TRINIDAD
Retired President, Individual Life Distribution ING U.S., LLC
Former Senior Vice President and Head of IGA Distribution, U.S. Life Group
ING U.S. Financial Services
Former President and Principal
Mulheran & Associates, Inc.
NAPLES, FLORIDA
President , SMC Resources
Former COO of Capital One FSB
Former COO
Citibank Latin America Consumer Bank
MIAMI, FLORIDA
Former Chief Executive Officer
Ochsner Clinic Foundation & International Services
Former Executive Director
Center for Community Wellness and Health Policy
Former Chief Executive Officer
Ochsner Health System
NEW ORLEANS, LOUISIANA
Retired Partner
Pricewaterhouse Coopers LLP
CHAPEL HILL, NORTH CAROLINA
Chairman of the Board, President & CEO
Pan-American Life Insurance Group
NEW ORLEANS, LOUISIANA
Principal Advisor
The Washington Economics Group Inc.
CORAL GABLES, FLORIDA
Frank Purvis was a man of vision, whose more than 56 years of stewardship and service was instrumental in making Pan-American Life the company that it is today. He was an inspiration to all those who knew him and an example, even to those who didn’t. May he rest in peace.
Pan-American Life Mutual Holding Company
As of December 31, 2017, 2016, and 2015
*2017 reflects unaudited financials | **2016, 2015 reflects audited financials
| Revenues | 2017* | 2016** | 2015** | |||
|---|---|---|---|---|---|---|
| Premiums | $ 701,723 | $ 650,332 | $ 515,384 | |||
| Policy and contract fees | 114,106 | 111,165 | 111,820 | |||
| Net investment income | 243,141 | 231,432 | 156,405 | |||
| Other revenues | 13,526 | 12,196 | 16,286 | |||
| Total Revenues | $ 1.072.496 | $ 1,005,125 | $ 799,895 |
| Benefits And Expenses |
2017* | 2016** | 2015** | |||
|---|---|---|---|---|---|---|
| Policyholder benefits and interest credited | $ 617,166 | $ 580,610 | $ 454,635 | |||
| Underwriting, acquisition, insurance and other expenses | 336,520 | 319,330 | 276,226 | |||
| Amortization of deferred policy acquistion costs | 30,981 | 33,036 | 14,762 | |||
| Total benefits and expenses | $ 984,667 | $ 932,975 | $ 745,623 | |||
| Income from operations before taxes and noncontrolling interest | $ 87,829 | $ 72,150 | $ 54,272 | |||
| Loss from discontinued operations net of tax | - | - | - | |||
| Net realized investment gains | 8,688 | 6,606 | 1,690 | |||
| Income tax expense | 19,029 | 29,810 | 20,599 | |||
| Income after taxes and before noncontrolling interest | 77,488 | 48,946 | 35,363 | |||
| Noncontrolling interest in income | (2) | 7 | 52 | |||
| Net Income | $ 77,490 | $ 48,939 | $ 35,311 |
Pan-American Life Mutual Holding Company
As of December 31, 2017, 2016, and 2015
*2017 reflects unaudited financials | **2016, 2015 reflects audited financials
| Assets | 2017* | 2016** | 2015** | |||
|---|---|---|---|---|---|---|
| Cash and invested assets | $ 5,237,693 | $ 4,979,557 | $ 4,776,399 | |||
| Deferred policy acquisition costs | 194,281 | 190,032 | 190,863 | |||
| Other assets | 569,642 | 519,114 | 545,739 | |||
| Total Assets | $ 6,001,616 | $ 5,688,704 | $ 5,513,001 |
| Liabilities And Equity |
2017* | 2016** | 2015** | |||
|---|---|---|---|---|---|---|
| Future policy benefits and claims | $ 2,444,775 | $ 2,397,061 | $ 2,213,129 | |||
| Policyholder account balances and funds | 2,132,760 | 2,039,287 | 1,951,584 | |||
| Other liabilities | 358,471 | 322,186 | 500,490 | |||
| Total Liabilities | $ 4,936,006 | $ 4,758,534 | $ 4,665,203 | |||
| Noncontrolling interest subsidiaries | $ 293 | $ 592 | $ 537 | |||
| Unassigned equity | 1,001,843 | 924,350 | 875,411 | |||
| Accumulated other comprehensive income (loss) | 63,474 | 5,228 | (28,150) | |||
| Total Equity | $ 1,065,610 | $ 930,170 | $ 847,798 | |||
| Total Liabilities And Equity | $ 6,001,616 | $ 5,688,704 | $ 5,513,001 |
(GAAP in millions of $)
The 15% growth in 2017 was driven by positive earnings and an increase in the fair value of the Company's investment portfolio.
(GAAP in millions of $)
Pre-tax operating income in 2017 increased 22% due to strong earnings across all four of the Company's lines of business.
(GAAP in millions of $)
Net income increased 58% from 2016 to 2017 due to the strong earnings across all four of the Company's lines of business and a lower effective tax rate.
(GAAP in millions of $)
The 7% growth in 2017 represents continued growth in the Company's International Group and US Life business.
Pan-American Life Insurance Group would like to thank all of its employees and producers for the phenomenal contributions they have made to our success. Special thanks are also due to our Board of Directors for their commitment and steady stewardship. And finally, thank you to the millions of individuals and businesses across the Americas that continue to place their trust in us. It’s because of you that we are people you can trust for life.
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© 2018 Pan-American Life Insurange Group Not all products are available in all locations. For additional information on Pan-American Life products and services and the Group member companies that offer them, visit palig.com.
