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New York Life Reports 2010 Financial Results

  • Surplus and Asset Valuation Reserve increased by $1.8 billion, or 12%, to a record high of $16.8 billion.
  • Operating earnings of $1.4 billion increased 21% from 2009, exceeding the record result set in 2008.
  • Operating revenue grew by $1.1 billion, or 7.7% over 2009, to a record high $15.5 billion.
  • Total insurance sales surpassed $3 billion, an increase of 15% over 2009, setting a new record, with U.S. Life Insurance leading the way with a 26% increase.
  • Total investment sales exceeded $35 billion, a rise of 6.7% over 2009 and a new record.
  • Assets under management reached a record of $316 billion, a 10.2% increase from 2009.

NEW YORK, April 7, 2011 – New York Life Insurance Company, America’s largest mutual life insurance company*, announced record 2010 operating earnings and added $1.8 billion to surplus for the year, increasing the company’s financial strength to $16.8 billion, an all time high. The company also set new records in sales of insurance and investment products, operating revenue and assets under management.

Ted Mathas, chairman and CEO, said, “The company’s operations continued to generate strong growth in 2010. Most notably, our U.S. Life Insurance operations, the core of the New York Life franchise for 166 years, produced life sales growth of 26 percent at a time when the industry struggled for a modest single-digit increase. In fact, over the past four years our insurance sales have grown at a compound annual rate of 13 percent. Contributing to this strong sales growth has been outstanding growth in our career agency system. Since 2005 the ranks of New York Life active agents have grown 32 percent, while the number of agents industry wide is declining. Our agents and employees have worked hard to inform our policyholders and the public about the important role that life insurance can play in their financial planning and New York Life’s superior financial strength and track record of providing long-term guarantees. In the last three years in particular, the public has come to appreciate the importance of who is providing their family’s protection. This financial flight to quality provides the context for understanding our company’s recent performance. Meanwhile, New York Life remains one of only three life insurers in the U.S. with the highest-possible ratings from all four of the major rating agencies. Tied closely to our financial strength is our mutual structure, which perfectly aligns our business with the long-term interests of our policyholders. Our single focus on policyholders and managing for the long term has enabled us to pay a cash dividend to policyholders for 157 consecutive years, and despite the low interest rate environment we decided to hold our dividend scale for 2011 at a time when so many major U.S. life insurers are reducing their dividend scales. I am confident we can continue to differentiate our company by staying true to our fundamental strategies, including our focus on life insurance, on career agents, on remaining a mutual company, and of course, maintaining superior financial strength.”

Strong Surplus Position Provides Safety

Surplus, a main measure of financial strength, increased 12% in 2010 to $16.8 billion, a new record. The double-digit increase was fueled by strong net gains from operations and appreciation on investments in equities. Mr. Mathas said, “Our surplus and asset valuation reserve is at a record level, significantly above where it was even before the financial crisis. We maintain a healthy surplus – a kind of financial reservoir – to give our company and our policyholders sufficient capital at times of economic stress, pandemics and other disasters. Our reservoir was drawn down by some $2 billion during the crisis and has completely recovered – working just as a reservoir should. Our discipline of maintaining a large financial cushion has been more than validated in recent years, helping us maintain our highest-possible financial strength ratings and provide peace of mind to policyholders.”

Record Operating Earnings

Operating earnings, the company’s measure to track profitability from ongoing operations, were a very strong $1.44 billion in 2010, marking the fifth consecutive year that operating earnings have surpassed $1 billion. The 2010 result exceeds the record $1.33 billion in operating earnings posted in 2008. “The company’s operating earnings performance was resilient throughout the financial crisis, a reflection of how we manage for long-term strength. This approach provides a less volatile earnings profile so our policyholders can count on us year after year,” Mr. Mathas said.

Records Set for Sales, Operating Revenue and Assets Under Management

Insurance sales increased 15% in 2010, to $3.1 billion, propelled primarily by strong sales of life insurance through agents (up 29%). New York Life is the largest seller of life insurance and lifetime income annuities in the United States, according to an industry source.** Insurance sales through the Agency channel set a new record in 2010, exceeding $1 billion for the first time.*** Investment sales increased 6.7% to $35 billion in 2010, driven by exceptional growth in sales of institutional separate managed accounts, retail mutual funds, and bundled 401(k) plans. New York Life’s operating revenue, the company’s measure to track revenues from ongoing operations, increased 7.7% to $15.5 billion, a new company milestone. Assets under management increased $29 billion in 2010, to a new high of $316 billion, up 10.2%.

Review of Businesses

U.S. Life Insurance and Agency Operations

The company’s U.S. Life Insurance and Agency Operation includes the manufacture and sale of all life insurance products in the United States and management of the company’s primary U.S. distribution channel, 11,900 licensed agents. U.S. Life Insurance is the company’s largest revenue generator, selling a full array of products including individual-, bank- and corporate-owned life insurance. Key highlights of 2010 were:

  • For the fourth consecutive year, New York Life recruited more than 3,000 financial representatives in the United States in 2010. Agents who plan to work in specific ethnic communities represented more than 40 percent of agent appointments in 2010.
  • New York Life continued its leadership in the MDRT (formerly known as the Million Dollar Round Table), the industry’s most prestigious professional organization for agents, for the 56th consecutive year. The company had 1,995 agents achieve this recognition in 2010, about one-quarter of New York Life’s active field force in the United States. New York Life also led the industry in the number of women agents qualifying for MDRT in 2010.
  • New York Life is America’s leading direct marketer of life insurance through an endorsed program with AARP geared to its membership.
  • New York Life is also the largest underwriter of professional association insurance programs in the United States, covering members of more than 500 associations across the country.
Retirement Income Security

Retirement Income Security (RIS) is a leader in providing solutions to the retirement income challenge facing Americans, both in the accumulation and income phases of retirement. RIS makes available income annuities, investment annuities, the company’s family of MainStay mutual funds and long-term care insurance.

In 2010, RIS achieved new sales records in income annuities and new sales records for MainStay mutual funds. The long-term care operation generated a double digit increase in sales. While other insurers were exiting the long-term care business or raising prices, the company paid a dividend on its policies for the sixth consecutive year. New York Life is the fourth-largest seller of new individual long-term care insurance premium in the United States.****

New York Life Investments*****

New York Life Investments ranks among the largest asset management firms in the United States. With $283 billion in assets under management as of December 31, 2010, New York Life Investments and its affiliates provide investment management services to institutional and retail clients, offer retirement plans for corporations, multi-employer trusts and individuals and deliver guaranteed products to both the qualified and non-qualified markets. New York Life Investments continues to provide superior risk-adjusted performance in managing $165 billion of New York Life’s investment assets.

In 2010, New York Life Investments also achieved company records in both gross and net sales, while expanding product offerings in key asset classes with the acquisition of Private Advisors LLC of Richmond, Virginia.

New York Life International

New York Life International, with operations in Asia and Latin America, delivered strong revenue and earnings, with particularly solid performances in the company’s operations in Mexico and India. International’s career agent sales force continues to be a strong asset, with more than 51,000 agents registered in our markets.

New York Life Ratings Are Exceptionally Strong

New York Life has the highest possible ratings for financial strength/claims paying ability from the four major rating agencies: Moody’s Investors Service (Aaa), Standard & Poor’s (AAA), Fitch (AAA) and A.M. Best (A++).

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. 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 and retirement plan services. Other New York Life affiliates provide an array of securities products and services, as well as institutional and retail mutual funds.

Visit New York Life’s Web site at www.newyorklife.com for more information.

Note to Editors: New York Life was the number one seller of fixed immediate annuities in 2010, according to an industry source. Source: LIMRA International, U.S. Individual Annuity Sales Survey, Fixed Immediates, Fourth Quarter YTD 2010 results. (Fixed Immediates include Fixed Period Annuities.) New York Life was the largest seller of individual life insurance, according to an industry source. Note: Sales based on all planned recurring premiums plus 100% of reported single premiums. Source: LIMRA International, Fourth Quarter YTD 2010 Individual Life Insurance Sales Survey. Also, New York Life was the fourth largest seller of new individual long-term care insurance premium, according to an industry source. Source: LIMRA International, 2010 Individual Long-Term Care Sales Survey, adjusted for level premium pay plans plus 10% of limited premium pay plans.

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.

Please call 800-MAINSTAY (624-6782) for a prospectus. Investors are asked to consider the investment objectives, risks, and charges and expenses carefully before investing. The prospectus contains this and other information about the investment company. Please read the prospectus carefully before investing.

Securities distributed by NYLIFE Distributors LLC, 169 Lackawanna Avenue, Parsippany, New Jersey 07054.

MainStay and MainStay Investments are registered names under which New York Life Investments does business. New York Life Investments serves as the investment manager of the MainStay Funds. 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.

*Source: Fortune 500, ranked within industries, Insurance: Life, Health (Mutual), Fortune magazine, May 3, 2010.

**Source: LIMRA International with single premiums counted at 100%. See Note to Editors on page 5 for more detail.

***New York Life counts Agency insurance sales of single premiums at 50%.

****Source: LIMRA International, 2010 Individual Long-Term Care Sales Survey. See Note to Editors on page 5 for more detail.

*****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. See Note to Editors on page 5 for additional information.