Gleaner Life Insurance Society Statements of the Society’s Financial Condition December 31, 2020
Gleaner Life Insurance Society’s financial strength continued to prosper and grow in 2020 despite the challenges to continue operations during the COVID-19 pandemic for our independent agents and employees. For the third year in a row, we repeated substantial growth in both our life and annuity new business. We also amended our annuity reinsurance treaty with Heritage Life Insurance Co. to include our annuities with 3.0% guarantees (see page 10 for an explanation of our annuity reinsurance agreement). Total premium increased $6.5 million over 2019 (after adjusting for ceded annuity reinsurance premium). First-year life premium including single is up $1.2 million (53.8%), life premium in total is up $1.3 million (16.3%). First-year annuity premium including single is up $8.2 million (19.9%), annuity premium in total is up $5.2 million (10.4%). Much of our increased premium is due to sales of our indexed universal life and indexed annuity products. The Society’s balance sheet grew even stronger this year, with a high-quality investment portfolio and a historic member surplus position. The Society’s assets are $1.358 billion as of Dec. 31, 2020, a 6.3% increase from 2019. Our accomplishments also include marked improvement in our RBC ratio of 1,004%, compared to 932% last year. These successes were reassuring as interest rates declined and continue to remain historically low. Gleaner’s stable financial foundation supports our members’ financial and community engagement goals and our future business initiatives. We experienced a $14.5 million decrease in member benefits paid compared with the previous year (after adjusting for ceded annuity reinsurance). Annuity and life surrenders decreased $13.7 million and $1.5 million, respectively, while life death benefits decreased $1.4 million and annuity death benefits increased $7.9 million. Gleaner’s investment portfolio continued to perform well in 2020 despite a decline in net investment income from continuing low interest rates. The Society’s diversified investment portfolio is built on prudent policies and practices. Gleaner’s conservative philosophy and professional management provide a sound foundation for our investments. The Society’s bond portfolio is 97.0 percent investmentgrade quality and represents 91 percent of our investments. We have an overall bond portfolio rating of “A” as of Dec. 31, 2020. Mortgage loans, certificate loans, 8
\ Spring 2021 \ Forum Magazine
cash and short-term investments, stocks, real estate and other invested assets (including derivatives purchased to support our indexed solutions) comprise the remaining portions of our investment portfolio. As of year-end 2020, we have $23.6 million of preferred and common stock holdings. $23.3 million of preferred stock is held as part of the reinsurance arrangement with Heritage. Our common stock holdings include capital stock requirements ($362,100) for our membership in the Federal Home Loan Bank of Indianapolis (FHLBI). Gleaner is a member of FHLBI to enhance our liquidity position and have ready access to reliable, low-cost funds. Our intent is to use our FHLBI membership as liquidity insurance, and we would only ever plan to access funds in an emergency situation. Also, the Society is proud to report it continues to operate with zero debt! Gleaner’s 2020 surplus is our highest year-end amount ever recorded at $124.9 million — an $18.7 million increase from year-end 2019. This is our eighth consecutive year with a surplus increase, and our surplus has increased $44.1 million since 2012. The Society’s surplus ratio remains above the average of 25 leading life insurance companies. We have $110.13 of assets for every $100 of liabilities. (Independent Comparative Report: Standard Analytical Service Inc.). Our surplus grew as a result of net income of $38.3 million in 2020, compared with net income of $19.5 million in 2019. The increase in 2020 was due to a combination of factors in addition to our annuity reinsurance treaty (see page 10 for a detailed explanation). The Society has had eight consecutive years of positive net income. Some of the factors that have contributed to our net income achievements in recent years are containment of operating expenses, a disciplined approach to setting credited interest rates and appropriate pricing of new financial solutions in the low interest rate environment. Successful management of our investment portfolio has also resulted in fewer realized losses. As of December 2020, both of our A.M. Best and KBRA financial strength rating was affirmed at “A- (Excellent)” with a stable outlook. According to A.M. Best, our current rating is assigned to insurance companies that have an excellent ability to meet their ongoing insurance obligations. A.M. Best is a global full-service credit-rating agency www.gleanerlife.org
