Helping You Is What We Do Best

Transcription

1 ANNUAL REPORT 2016

2 OPENING REMARKS If we know anything, we know this: at Southern Farm Bureau Life Insurance Company, our Family Values aren t old fashioned. Even in these modern times of technology disruptions, social media, and smartphones at the dinner table, we understand that personal relationships and serving our customers will never go out of style.

3 ANNUAL REPORT 16 TABLE OF CONTENTS MESSAGE FROM THE PRESIDENT SFBLIC BOARD OF DIRECTORS MESSAGE FROM THE CEO MESSAGE FROM THE SENIOR VICE PRESIDENT OF MARKETING FINANCIAL HIGHLIGHTS STATUTORY STATEMENTS OF FINANCIAL POSITION STATUTORY STATEMENTS OF OPERATIONS STATUTORY STATEMENTS OF STOCKHOLDERS EQUITY AND USES OF INCOME OFFICERS CLOSING REMARKS OUR MISSION Our mission is to be the life insurance company of choice for our Farm Bureau family. Our focus is to provide competitive products and superior customer service to our Farm Bureau policyholders and agents, while observing the highest ethical standards. Helping You Is What We Do Best

4 2 MESSAGE FROM THE PRESIDENT Confidence... thrives on honesty, on honor, on the sacredness of obligations, on faithful protection and on unselfish performance. Without them it cannot live. Franklin D. Roosevelt Franklin D. Roosevelt, the 32nd president of the United States of America, learned much about Protecting What Matters Most. FDR overcame debilitating polio to lead the nation out of the Great Depression, through the depths of the attack on Pearl Harbor and the torment of the German-led plague that became World War II. FDR s quote above sounds as if it could have been written to reference the Southern Farm Bureau Life Insurance Company. thrives on honesty, on honor, on the sacredness of obligations, on faithful protection and on unselfish performance. Truly, confidence and protection are hallmarks of the insurance business. Without equal measures of each, we cannot succeed. We conduct our business based upon the proven foundation of dealing face to face with our customers, in their local communities, and with relationships that are built upon trust and respect. Customer service remains essential to our Company s mission. I am proud to say that Southern Farm Bureau Life Insurance Company works daily to create confidence from our policyholders, so we can help them protect the things that matter. Like FDR we must deal with life s adversities, see light where there is darkness, and continue our mission of Protecting What Matters Most. RANDY VEACH CHAIRMAN OF THE BOARD AND PRESIDENT Southern Farm Bureau Life Insurance Company

5 3 BOARD OF DIRECTORS FRONT ROW: Jim Harper (LA), Gerald Long (GA), Randy Veach (AR), Wayne Pryor (VA), Mike McCormick (MS) MIDDLE ROW: Scott Whitford (NC), Ronald Anderson (LA), Rich Hillman (AR), Robert Fountain (GA), Reggie Magee (MS), William Coleman (SC), Harry Ott (SC) BACK ROW: Larry Wooten (NC), John Hoblick (FL), Eddie Melton (KY), Mark Haney (KY), Michael White (TX), Brant Schirard (FL), Russell Boening (TX), Gordon Metz (VA)

6 4 MESSAGE FROM THE CEO When you think about the things in life that you value the most, family is certainly high on the list. If you spend much time around Southern Farm Bureau Life Insurance Company, you will hear the word family come up many times in conversation it s in our Mission Statement! Our Mission is to be the life insurance company of choice for our Farm Bureau family. Our focus is to provide competitive products and superior customer service to our Farm Bureau policyholders and agents, while observing the highest ethical standards. Helping You Is What We Do Best. One of the cornerstones of financial security is life insurance protection. Our agents and home office staff work tirelessly to help protect Farm Bureau families by providing security through Life and Annuity products. Since 1946, our focus has been on serving these families and building a financially strong Company that stands behind our commitment to be there when you need us. It gives me great pleasure to report that 2016 was another great year for Southern Farm Bureau Life Insurance Company. We continue to build on our history of financial strength, while providing record benefits to our policyholders and their beneficiaries. At year end, the Company had $138 billion of life insurance in force, a 5.1% increase over Our assets totaled $13.9 billion, an increase of 4.6%, and total surplus was over $2.5 billion. A. M. Best recognizes our strong capitalization by their assignment of our A+ (Superior) financial strength rating. Along with these financial accomplishments, the Company provided $279.1 million in death benefits and $552.6 million in living benefits to our Farm Bureau families. We are delivering on the promises that have been made to Protect What Matters Most! RANDY JOHNS, FLMI, ACS EXECUTIVE VICE PRESIDENT, CHIEF EXECUTIVE OFFICER Southern Farm Bureau Life Insurance Company

7 5 MESSAGE FROM THE SENIOR VICE PRESIDENT OF MARKETING In 2016, Southern Farm Bureau Life Insurance Company completed its fourth consecutive year of record growth. Organizations that are committed to action and accountability continuously prove to be the most successful. This is portrayed by our field force as they continue to thrive and exceed expectations not only with fewer agents companywide, but also as their efforts continue to be hampered by the continued low interest rate environment. Because of the hard work and dedication to our members, we finished 2016 with $138 billion of life insurance in force. Protecting What Matters Most resonates throughout this year s accomplishments. In reality, this message is what motivates our field force to separate themselves from the competition. Protecting people from financial hardships is the foundation on which our Company was built. Satisfying the needs of our policyholders is why we do what we do each and every day. Because our field force are actively engaged in their communities, our policyholders put their trust in them to protect their families hopes and dreams for financial security. Our Board of Directors, home office employees, field force, and sales management all recognize that it is imperative to maintain a financially strong, viable company to uphold the promises we deliver. Protecting what matters most is why we exist. It is who we are and what we represent. Our people are the heart and soul of this incredible organization, and it is an honor to serve our Farm Bureau family as we strive to make a difference every day. DAVID HURT, LUTCF SENIOR VICE PRESIDENT, MARKETING Southern Farm Bureau Life Insurance Company

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9 7 FINANCIAL HIGHLIGHTS December 31, 2016 December 31, 2015 Life Insurance in Force $ 138,026,099,824 $ 131,312,939,975 Admitted Assets $ 13,926,215,441 $ 13,307,904,235 Total Stockholders Equity $ 2,537,350,315 $ 2,456,844,990 Premium Income $ 968,551,751 $ 908,480,224 Investment Income $ 575,288,877 $ 550,968,813 Added to Retained Earnings $ 80,505,325 $ 20,405,607 Benefits to Policyholders $ 831,678,341 $ 798,646, LIFE INSURANCE IN FORCE $ 138,026,099,824 ADMITTED ASSETS 2016 $ 13,926,215, TOTAL STOCKHOLDERS EQUITY 2016 $ 2,537,350,

10 8 STATUTORY STATEMENTS OF FINANCIAL POSITION December 31, 2016 December 31, 2015 ADMITTED ASSETS Bonds at Amortized Cost $ 9,793,536,040 $ 9,458,450,156 Preferred Stock at Cost 32,810,459 25,892,417 Common Stock at Market 556,048, ,792,456 Mortgage Loans 1,601,796,136 1,436,859,687 Real Estate at Cost less Depreciation 15,892,692 14,395,493 Partnership Interests 592,932, ,503,283 Cash & Short-term Investments 226,702, ,909,180 Policy Loans 530,465, ,090,637 Deferred Income Taxes 120,309, ,361,901 Premiums Deferred & Uncollected 265,929, ,329,686 Accrued Investment Income 114,994, ,418,149 Other Assets 57,735,765 49,888,352 Separate Account Assets 17,060,178 16,012,838 Total Assets $ 13,926,215,441 $ 13,307,904,235 These summary financial statements are derived from the Company s audited financial statements, which are prepared in conformity with statutory insurance accounting principles prescribed or permitted by the Insurance Department, state of Mississippi.

11 9 STATUTORY STATEMENTS OF FINANCIAL POSITION December 31, 2016 December 31, 2015 LIABILITIES Policy Reserves $ 9,893,890,113 $ 9,516,057,186 Policy and Contract Claims 36,215,776 33,437,851 Advanced Premiums and Funds on Deposit 22,864,897 22,330,335 Accrued Policy Dividends 50,270,103 55,922,396 Dividends Left on Deposit 257,007, ,752,047 Pension Plan Administration Funds 602,288, ,773,430 Taxes Other Than Federal Income Tax 7,320,647 7,363,011 Commissions & Due to Affiliates 13,831,917 14,207,747 Other Liabilities 254,633, ,428,007 Asset Valuation Reserve 233,481, ,774,397 Separate Account Liabilities 17,060,178 16,012,838 Total Liabilities $ 11,388,865,126 $ 10,851,059,245 STOCKHOLDERS EQUITY Common $100 Par Value, Authorized 20,000 shares; Issued and Outstanding 15,000 shares $ 1,500,000 $ 1,500,000 Paid-in Capital in Excess of Par 400, ,000 Retained Earnings 2,535,450,315 2,454,944,990 Total Stockholders Equity $ 2,537,350,315 $ 2,456,844,990 Total Liabilities & Stockholders Equity $ 13,926,215,441 $ 13,307,904,235

12 10 STATUTORY STATEMENTS OF OPERATIONS FOR THE YEARS ENDING December 31, 2016 December 31, 2015 REVENUE Life Premiums $ 741,377,925 $ 713,068,403 Annuity Premiums 212,761, ,916,586 Accident & Health Premiums 14,412,358 14,495,235 Supplementary Contracts 20,756,125 24,533,480 Investment Income 575,288, ,968,813 Other Revenue 2,293,533 2,080,598 Total Revenue $ 1,566,890,286 $ 1,486,063,115 POLICY BENEFITS & EXPENSES Death Benefits $ 255,891,520 $ 226,364,072 Accident & Health Benefits 10,939,012 11,470,152 Surrender & Other Life Benefits 156,315, ,137,509 Annuity Benefits 299,845, ,011,838 Amounts added to Policy Reserves held for Policyholders 366,040, ,674,099 Interest on Policy and Contract Funds 39,314,227 40,116,929 Payments on Supplementary Contracts 20,636,814 20,000,518 Commissions 79,594,107 76,672,863 General Insurance Expenses 165,657, ,115,821 Taxes, Licenses, Fees 24,924,976 22,171,133 Total Policy Benefits & Expenses $ 1,419,160,527 $ 1,320,734,934 Net Gain from Operations before Dividends and Federal Income Tax 147,729, ,328,181 Dividends to Policyholders 48,735,225 54,545,722 Net Gain from Operations before Federal Income Tax 98,994, ,782,459 Federal Income Tax 21,075,000 27,100,000 Net Gain from Operations $ 77,919,534 $ 83,682,459

13 11 STATUTORY STATEMENTS OF STOCKHOLDERS EQUITY December 31, 2016 December 31, 2015 Common Stock $ 1,500,000 $ 1,500,000 Paid-in Capital in Excess of Par 400, ,000 Total Common Stock $ 1,900,000 $ 1,900,000 RETAINED EARNINGS Balance at Beginning of Year $ 2,454,944,990 $ 2,434,539,383 Net Gain from Operations 77,919,534 83,682,459 Realized and Unrealized Capital Gains, Net 36,709,867 (95,668,586) Change in Asset Valuation Reserve (53,707,589) 67,041,937 Dividends to Stockholders (90,000) (92,550) Other 19,673,513 (34,557,653) Total Retained Earnings $ 2,535,450,315 $ 2,454,944,990 Total Stockholders Equity $ 2,537,350,315 $ 2,456,844,990 USES OF INCOME 76 cents of every dollar earned was utilized for policyholder benefits during 2016 FOR THE YEARS ENDING December 31, 2016 December 31, 2015 FOR BENEFIT OF POLICYHOLDER $0.76 $0.75 Added to Policyholder Reserves Policyholders Dividends Death Benefits Surrender & Other Living Benefits OTHER USES $0.24 $0.25 Commissions General Expenses Licenses & Taxes Net Gain - Added to Retained Earnings

14 12 OFFICERS RANDY VEACH CHAIRMAN OF THE BOARD, PRESIDENT WAYNE PRYOR FIRST VICE PRESIDENT RANDY JOHNS, FLMI, ACS EXECUTIVE VICE PRESIDENT, CHIEF EXECUTIVE OFFICER H. LUSBY BROWN, CFA SENIOR VICE PRESIDENT, CHIEF INVESTMENT OFFICER RICK FIELDING, FSA, MAAA SENIOR VICE PRESIDENT, CHIEF ACTUARY & RISK OFFICER DAVID HURT, LUTCF SENIOR VICE PRESIDENT, MARKETING JOSEPH A. PURVIS, FLMI, AIRC SENIOR VICE PRESIDENT, GENERAL COUNSEL & SECRETARY BILLY SIMS, FLMI, SPHR, CCP, CBP SENIOR VICE PRESIDENT, POLICY ADMINISTRATION ROBERT WARD, CPA, CLU, FLMI, CIA, CFE SENIOR VICE PRESIDENT, CHIEF FINANCIAL OFFICER CHARLIE ALLEN, FLMI, ACS, AIAA VICE PRESIDENT, CHIEF TECHNOLOGY OFFICER NANCY BAKER, FLMI, FLHC, ACS VICE PRESIDENT, CLAIMS DIANE BOYETTE, JD VICE PRESIDENT, CHIEF COMPLIANCE OFFICER DANNY COLLINS, FALU, FLMI, ACS VICE PRESIDENT, UNDERWRITING & NEW BUSINESS ADMINISTRATION STAN DICKENS, FSA, MAAA, FLMI VICE PRESIDENT, ACTUARY DAVID N. DUDDLESTON, M.D. VICE PRESIDENT, MEDICAL DIRECTOR SHELIA R. HUDSON, CIA, CFE, CFSA, CLU VICE PRESIDENT, INTERNAL AUDITING LAURA HUMPHRIES, CLU, CLF, FLMI, ALHC, ACS VICE PRESIDENT, POLICY SERVICES KENNETH P. JOHNSTON, FSA, MAAA VICE PRESIDENT, MARKETING SERVICES HARPER KEELER VICE PRESIDENT, REALTY INVESTMENTS PERRY MCGAUGH VICE PRESIDENT, LEGAL & ASSISTANT SECRETARY DAVID SIMMONDS, CPA, ASA VICE PRESIDENT, CONTROLLER E J BUBBY TROSCLAIR, CLU, CHFC VICE PRESIDENT, AGENCY

15 CLOSING REMARKS Our agents and home office staff will continue to work tirelessly to protect our members most valuable possession, their family. Protecting members from financial hardships and offering them light in their darkest times is the foundation on which our Company was built. We will always strive to make a difference in their lives every day.

16 S O U T H E R N FA R M B U R E A U L I F E I N S U R A N C E C O M PA N Y J A BC UK RS EO AN U, ML II SF SE I SI NS SI PUPRIA N C E C O M P A N Y S O U T H E R N FA R M JACKSON, MISSISSIPPI