Adjusted Operating Earnings Top $1 Billion for the First Time in the Company's History.
Surplus Reaches All-time High of $11.8 Billion, Largest of Any Mutual; New Records Set For Agent-sold Life Insurance, Investment Sales, Assets Under Management.
NEW YORK, March 22, 2005 — New York Life Insurance Company, America's largest mutual life insurance company, achieved a new record in net income of $1.29 billion in 2004, an increase of 16% over the prior year's $1.12 billion. Surplus and Asset Valuation Reserve grew to $11.8 billion, the largest surplus of any mutual life insurer.
Sy Sternberg, chairman and chief executive officer, said, "As New York Life marks 160 years of service to policyholders next month, the company's performance was remarkable in the year just passed. Adjusted operating earnings topped $1 billion for the first time, and net income achieved a historic high. Strong performances from the business lines also led to a new record in adjusted operating revenue, crossing $10 billion for the first time. Records including total life insurance sales, agent-sold life insurance, investment sales, and assets under management were also set. Surplus reached a new high, boosted by organic growth of $1 billion, reinforcing for policyholders our reputation for safety and security. These achievements are the result of 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 2004
- Assets Under Management increased by more than $12.8 billion to $215 billion in 2004, a new high.
- Net income rose 16% to $1.29 billion, compared with 2003 net income of $1.12 billion*.
- Adjusted operating earnings increased 16% to a record $1.02 billion from $879 million in 2003**.
- Adjusted operating revenue grew more than $750 million, or 8%, to a record $10.4 billion in 2004**.
- Surplus and Asset Valuation Reserve grew $1 billion to $11.8 billion, a new record.
- Total life insurance sales reached a new record of $2.1 billion.
- Total investment sales were $24.5 billion, up more than $2 billion to a new record.
- Individual life insurance in force set a new record of $616 billion.
*According to Generally Accepted Accounting Principles (GAAP).
**See attached reconciliation of GAAP performance measures to non-GAAP performance measures.
2004 Earnings (PDF, 36KB) 2004 Highlights (PDF, 32KB)
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 4% to $6.9 billion in 2004, compared with $6.7 billion in the prior year.
For the fourth 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 76 largest insurers, representing three-quarters of the industry.* The company achieved this distinction in a sales survey based on either of two common methodologies - new periodic premium, plus single premium counted at either 10% or 100%.
Sales of life and annuity products in the United States increased 22% in 2004, to $7.48 billion, compared with $6.14 billion in 2003. New York Life's agency system, the company's primary distribution channel, posted its eighth consecutive year of increased life sales to $858 million, up 6% over 2003. Agent sales of individual annuities experienced the best growth in four years, to $2.95 billion in 2004. An innovative Lifetime Income Annuity product experienced a 154% increase in sales to $292 million in 2004, contributing to an overall 30% increase in individual annuity sales for the year, to $6 billion. The company also sells individual annuities through banks, which contributed $2.46 billion of the sales total in 2004, a new high, up $1.3 billion for the year. New York Life is now the third biggest seller of fixed annuities through banks.*
New York Life achieved a significant agency milestone in 2004 in the Million Dollar Round Table, the industry's most prestigious professional organization for agents. This marked the 50th consecutive year that the company led the industry in qualifying agents, a validation of the strength of an agency system that is one of the company's key competitive differentiators.
Special Markets' adjusted operating revenue increased 11% to $1.19 billion in 2004, compared with $1.07 billion in 2003. Special Markets is comprised of three main business lines, AARP Life Insurance Program, long-term care and membership association, all of which had record levels of adjusted operating revenue in 2004. New York Life marked its tenth year as the exclusive provider of life insurance products to members of AARP**, with sales in 2004 exceeding $100 million for the first time. Through this AARP program, New York Life is America's leading direct marketer of life insurance to those over 50 years of age. 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 now ranks among the top ten providers in this field.***
*Source: LIMRA International, U.S. Individual Life Insurance Sales survey, 2004.
**Formerly the American Association of Retired Persons.
***Source: LIMRA International.
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 5.4% increase in the subsidiaries assets under management over 2003, reaching $189 billion at the close of 2004. New York Life Investment Management recorded adjusted operating revenue of $922 million in 2004, an increase of 18% over 2003. Building upon its successful management of New York Life's own investment portfolio, New York Life Investment Management now oversees more than $3.1 billion of specialty investment products - including collateralized debt obligations (CDOs), mezzanine funds and private equity. Total sales climbed to a record $18.2 billion*, up 3% over 2003, and were particularly strong in the Retirement and Guaranteed Products businesses.
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.
- MainStay Investments Wealth Strategies, offering separately managed accounts that serve the needs of individuals and institutions.
- Guaranteed Products, a premier provider of Guaranteed Investment Products.
- MacKay Shields LLC, McMorgan & Company, Securities Investment and NYLIM Equity Investors -- 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 management business.
- NYLIM Real Estate, a provider of mortgage and equity real estate capital.
- Madison Capital Funding LLC, a specialty finance company.
* 2004 investment sales include $1.25 billion of sales related to an acquisition of an investment subsidiary in 2004.
International Operations Show Strong Revenue Growth
New York Life International, with operations in South Korea, Taiwan, China, Hong Kong, Thailand, India, the Philippines, Argentina, and Mexico, reported strong revenue gains and insurance sales. Adjusted operating revenue grew to $1.5 billion, up 24% over the prior year. Insurance sales saw double-digit growth to $481 million, driven for the second consecutive year by exceptional growth in the company's Thailand operation.
New York Life International operations remain in growth mode, expanding rapidly in two of the world's most attractive emerging markets, India and China. The company's two-year old joint venture in China, Haier New York Life, last year received government permission to expand to a second major metropolitan area, Chengdu, in Sichuan province, and began selling life insurance there before the end of 2004. Max New York Life, the company's joint venture in India, recorded strong sales growth in 2004. The company now has 7,000 licensed agents in India and has expanded its network of offices and affiliates to 34 cities nationwide.
International's career agent sales force continues to grow, with 18,000 agents registered in the nine markets. Seguros Monterrey New York Life, in Mexico, produced 372 members of the Million Dollar Round Table (MDRT). The Mexican operation now ranks 19th on MDRT's worldwide list of companies with qualifying agents.
Ratings Agencies Affirm Company Ratings
The ratings agencies all affirmed New York Life's strong ratings during 2004. 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 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.
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|New York Life Net Income Rises 16% To New Record In 2004|