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Financial Information for National Guardian Life Insurance Company.
2017 was a record year, from a sales standpoint, for National Guardian Life Insurance Company (NGL) and its subsidiaries. Strong sales are important to preserve the long term financial strength of the company for the benefit of all policyholders. Total sales for 2017 were $790 million, which is an increase of 8% over 2016. The 2017 sales results contributed to the growth of the consolidated statutory assets to $4.3 billion as of the end of 2017.
Our largest sales area is preneed insurance. Preneed insurance is life insurance used to fund pre-arranged funeral contracts. Sales in this line for 2017 were $451 million which was slightly below our 2016 sales of $456 million. While we seek additional growth where possible, the preneed insurance market overall is not growing rapidly. Demographics are positive for the funeral industry in the next several decades. However, the rapid growth in cremations over traditional burials puts downward pressure on preneed sales volume.
Sales were also strong in our Individual Life & Annuity (ILA) line of business, totaling $124 million. This was up by 42% over 2016. Our sales were evenly split between single premium life insurance and single premium immediate annuities. Both of these products assist seniors in their estate planning. In the future we anticipate offering other products in ILA that will have broader applicability.
Sales of final expense insurance products, through our subsidiary Settlers Life Insurance Company, totaled $11.0 million, which is a decrease of 14% compared to 2016. Final expense insurance is basic insurance coverage to help offset funeral and other end of life expenses. Our 2017 sales were disappointing given our growth in the prior two years. However, the final expense market is competitive and it is a challenge to grow sales while achieving necessary profitability. Our goal is to continue to grow sales, but we must do so while maintaining the expected profitability of the products we sell.
Sales in our Group Markets line of business (group accident and health) totaled $204 million, an increase of 17% over 2016. Over $100 million of this business is group dental and vision coverage sold through the workplace. Another $86 million is student accident and health insurance marketed by our subsidiary Commercial Travelers Life Insurance Company. Various other product types are being pursued or considered to expand Group Markets.
Strong net income and growth in surplus are also necessary to maintain NGL’s financial strength. On a consolidated statutory basis NGL had a net gain in 2017 of $38 million, which is a very solid result given the pressure that low investment rates continue to place on our operating performance. As a result, capital and statutory surplus rose 9% to $354 million as of year-end. This is a very secure level given NGL’s size, asset quality, and business mix. These 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.
On November 21, 2017 the board of directors established three new board of director seats for NGL. The board appointed three individuals to fill those vacancies, as well as a fourth individual to fill the vacancy created when Director Albert L. Toon resigned from the board earlier in the year. Effective January 1, 2018, we welcomed the following individuals to our board of directors:
Amie T. Goldman – President of The Management Group (TMG), a Medicaid provider of consumer-directed long term care services and support for older adults and adults with disabilities. Goldman holds a B.A. degree in political science and sociology from Northwestern University and a M.A. degree in social service administration from the University of Chicago.
Erik S. Johnson – Chairman and CEO of Hy Cite Enterprises, a direct-to-consumer sales organization of household products. Johnson holds a B.S. degree in industrial engineering from Columbia University, as well as an MBA from the University of Wisconsin-Madison.
David W. Kruger – Chairman and CEO of the Fiore Companies, a private commercial real estate company located in Madison, Wisconsin. A licensed attorney, Kruger holds a B.B.A. degree in finance and a J.D. degree from the University of Wisconsin-Madison.
Daniel P. Olszewski – Director of the Weinert Center for Entrepreneurship at the University of Wisconsin-Madison. Olszewski holds a B.S. degree in economics and computer science from the University of Wisconsin-Madison, as well as an MBA from Harvard Business School.
These director appointments expire on April 27, 2018, the date of the Annual Policyholder Meeting. At that meeting each of these individuals will stand for re-election by the NGL policyholders. We are extremely grateful for all of our policyholders who place their trust in NGL and its subsidiaries and thank them for their business. We also acknowledge our thousands of sales representatives and over 500 employees who serve our policyholders, and thank them for their contributions to NGL’s success. For more information we invite you to visit our website at www.nglic.com.
Consolidated Statutory Basis (in thousands)
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.
Read and download our Financial Report for the year of 2017.
Read about NGL's Financial Strength here.
View and download our GAAP Net Income and GAAP ROE results for the year of 2017.
Review our GAAP Results here.
Read and download our Annual Report for the year of 2017.
Read NGL's Annual Report here.