Surplus Reaches All-time High of $10.8 Billion, Largest of Any Mutual; New Records Set For Agent-sold Life Insurance in the U.S., Investment Sales
NEW YORK, March 16, 2004 - New York Life Insurance Company, America's largest mutual life insurance company, achieved net income of $1.12 billion in 2003, an increase of 10% over the prior year's $1.02 billion. Surplus and Asset Valuation Reserve grew to $10.8 billion, the largest surplus of any mutual life insurer.
Sy Sternberg, chairman and chief executive officer, said, "Three primary stories emerged from 2003. Strong performances from the business lines led to new records in adjusted operating earnings and adjusted operating revenue, and also contributed to net income in excess of $1.1 billion. Surplus reached a new high, boosted by organic growth of $1.3 billion, reinforcing for policyholders our reputation for safety and security. And we extended our leadership in U.S. market share in individual life insurance for the third consecutive year. All of these achievements validate our strategy to stay focused on life insurance, maintain our career agency system, remain a mutual and expand globally."Summary of Key Financial Measures for New York Life in 2003
- Assets Under Management increased by more than $22 billion to $202 billion in 2003, a new high.
- Net income rose 10% to $1.12 billion, compared with 2002 net income of $1.02 billion*.
- Adjusted operating earnings increased 5% to a record $928 million from $884 million in 2002**.
- Adjusted operating revenue grew $500 million, or 5%, to a record $9.73 billion in 2003**.
- Surplus and Asset Valuation Reserve grew to $10.8 billion, a new record.
- Individual life insurance in force set a new record of $556 billion.
*According to Generally Accepted Accounting Principles (GAAP).
Life and Annuity, Special Markets Businesses Excel
The company's Life and Annuity business sells a full array of products in the United States, including individual, bank- and corporate-owned life insurance, and a variety of immediate and deferred, variable and fixed annuities. Adjusted operating revenue in Life and Annuity increased 3% to $6.7 billion in 2003, compared with $6.5 billion in the prior year.
For the third consecutive year, New York Life achieved the number one market share for new life premium, according to the association that compiles market data from among the 75 largest insurers, representing three-quarters of the industry.* Sales of individual life insurance rose 4% to a record $1.6 billion in 2003. The company's agency system increased life sales for the seventh consecutive year to $812 million, up 3% over 2002. New York Life also increased sales by 3% in its Advanced Markets Network distribution channel, to $692 million.
Agent sales of individual annuities increased slightly to $2.77 billion in 2003, compared with $2.71 billion in 2002. The company also sells individual annuities through banks, which contributed an additional $1.87 billion in sales in 2003.
Special Markets' adjusted operating revenue increased 13% to $1.07 billion, crossing the billion dollar mark for the first time. Special Markets is comprised of three main components, all of which had record levels of revenue in 2003. As the exclusive provider of life insurance products to members of AARP (formerly the American Association of Retired Persons), New York Life is the largest direct marketer of life insurance in the United States. New York Life is also the largest underwriter of professional association insurance programs in the United States, covering members of some 450 associations across the country. The company's long term care insurance operation, currently the industry's 12th largest provider, recorded one of the highest growth rates in the industry.
Investment Management Success Continues
New York Life's investment management subsidiary, New York Life Investment Management Holdings LLC, ranks among the largest asset management firms in the United States. The diversification of New York Life Investment Management's business among product types and distribution channels led to a 14% increase in its assets under management over 2002, reaching $179 billion at the close of 2003. New York Life Investment Management recorded adjusted operating revenue of $779 million in 2003, an increase of 9% over 2002. New York Life Investment Management's proven capabilities managing New York Life's own investment portfolio led to sales of $1.8 billion in specialty investment products - including collateralized debt obligations (CDOs) and mezzanine funds. Total sales climbed to a record $17.6 billion, up 6% over 2002, and were particularly strong in the retirement business, where sales increased by more than 50% year-over-year.
*Source: LIMRA International. Sales survey based on new periodic premium, plus 100% of single premium.
New York Life Investment Management's team of investment professionals focuses on virtually every sector of the capital markets, and includes:
- MainStay Funds and McMorgan Funds, mutual funds for individual and retirement plan investors.
- New York Life Investment Management Separately Managed Accounts, serving the needs of individuals and institutions.
- Guaranteed Products, a premier provider of Guaranteed Investment Products.
- MacKay Shields LLC, McMorgan Company, and Valuation Metrics -- institutional money management units.
- NYLIM Retirement Plan Services, offering bundled defined benefit and defined contribution plans.
- New York Life Capital Partners, a private equity investment business.
- NYLIM Real Estate, a provider of mortgage and equity real estate capital.
- Madison Capital Funding LLC, a specialty finance company.
- New York Life Trust Company FSB, a federally chartered trust company.
International Operations Profitable on Strong Revenue Gains
New York Life International reported strong revenue and earnings growth in the nine global markets in which it operates. Adjusted operating revenue grew to $1.3 billion, up 10% from the prior year. Adjusted operating earnings rose to $14 million, an increase of 8% from 2002. Insurance sales of $442 million were 17% lower than in 2002 reflecting management's decision to dampen sales in Taiwan due to record low interest rates there. Excluding Taiwan, insurance sales would have been up 15% in 2003*. Thailand led all operations with a sales increase of 133% over 2002. In China, the one-year old joint venture, Haier New York Life, ranked fourth in new premium among foreign joint venture life insurers in Shanghai.
International's career agent sales force continues to grow rapidly, with 16,000 agents registered in the nine markets, up more than 10% from 2002. Max New York Life, the joint venture in India, leads all operations with more than 5,000 licensed agents. Seguros Monterrey New York Life, the operation in Mexico, produced 277 members of the Million Dollar Round Table (MDRT), the premier international association of financial professionals. The Mexican operation now ranks 19th on MDRT's worldwide list of companies with qualifying agents.
New York Life International has operations in South Korea, Taiwan, China, Hong Kong, Thailand, India, the Philippines, Argentina, and Mexico. The company also maintains a representative office in Hanoi, Vietnam.
*on a constant dollar basis.
Surplus Notes Offering Validates the Company's Financial Strength Reputation
The low interest rate environment presented an opportunity to add to the company's already-strong capital position, and so for the first time in a decade New York Life went to the capital markets with a surplus notes offering. Market interest was very high and the initial offering was significantly over-subscribed, enabling the company to increase the size of the notes offering to $1 billion. The addition of these notes, coupled with strong organic surplus growth of $1.3 billion in 2003, brought the company's total Surplus and Asset Valuation Reserve at year-end to $10.8 billion. Mr. Sternberg commented that, "The company's reputation for superior financial strength was a major factor in the success of this offering. This strong surplus position assures that our commitments to policyholders will be met for generations to come."
Ratings Agencies Affirm Company Ratings
The ratings agencies all have affirmed New York Life's strong ratings. The company's financial strength/claims paying ability ratings by Standard & Poor's (AA+), Moody's (Aaa), Fitch (AAA) and A.M. Best (A++) have been affirmed.
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, annuities and long-term care insurance. New York Life Investment Management LLC provides institutional asset management, retirement planning and trust services. Other New York Life affiliates provide an array of securities products and services, as well as institutional and retail mutual funds.
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|New York Life Net Income Rises 10% In 2003|