- Surplus Increases $1 Billion to $12.9 Billion
- Insurance Sales Increase 10%, Investment Sales Rise 17%, Operating Revenue Up 8%
- Net Income, Excluding Realized Capital Gains and Losses, Increases 18% to $1.035 Billion
NEW YORK, April 12, 2006 — New York Life Insurance Company, America's largest mutual life insurance company, set new records for sales of insurance and investment products, as well as reached new highs in surplus, operating revenue, assets under management and other measures in 2005.
New York Life Achieved These Records in 2005:
- Operating revenue grew more than $800 million, or 8%, to $11 billion in 20051.
- Surplus and Asset Valuation Reserve grew $1 billion to $12.9 billion.
- Assets Under Management increased by more than $10 billion to $225 billion in 2005.
- Total insurance sales reached $2.2 billion in 2005, an increase of 10%.
- Total investment sales increased more than $4 billion, or 17%, to $28.3 billion.
- Combined sales of insurance and investment products exceeded $30 billion, up 16% over 2004.
- Individual life insurance in force grew to over $651 billion
Sy Sternberg, chairman and chief executive officer, said, "As New York Life marked its 160th year of service to policyholders in 2005, the company's operations showed excellent performance across the board. Our broad array of products, including traditional life insurance products, lifetime income annuities, long term care insurance, and institutional and retail investment products and services, are clearly meeting the varied needs of our policyholders and clients. The robust growth achieved in 2005 reflects effective execution of our strategy, including our focus on career agents and value–added supplemental distribution in the U.S. and internationally. Surplus increased by more than $1 billion and reached a new high of $12.9 billion, providing a superb cushion of safety and security for our policyholders. And to cap off the year, Moody's bestowed its coveted triple–A rating on New York Life, specifically recognizing our financial strength and industry leadership and providing an independent validation of our strategy — which includes maintaining our mutual form of ownership."
Net income in 2005, excluding net realized capital gains and losses, increased 18% to $1.035 billion. The company's GAAP net income (including realized capital gains and losses) totaled $855 million in 2005, compared with $1.29 billion in 2004. These results included net realized capital losses of $180 million in 2005, compared with net realized capital gains of $420 million in 2004. The 2005 net capital losses include a $512 million loss attributable to an effective risk management strategy that does not qualify for hedge accounting. Operating earnings, the company's measure to track the profitability from ongoing operations, totaled a very solid $934 million in 2005, nearly matching the record–setting 2004 operating earnings that were positively impacted by a number of nonrecurring items.
Record Sales and Operating Revenue
Insurance sales increased 10% in 2005, to $2.2 billion, propelled by strong sales of life insurance and lifetime income annuities in the United States and by a 20% increase in sales of life insurance in the company's International operations. Sales of income annuities increased 50% in 2005, making New York Life the third largest seller of these annuities in the United States. Sales of life insurance through AARP2 increased 31% in 2005. Investment sales increased 17%, to $28.3 billion in 2005, driven by a 22% increase in sales at New York Life Investment Management, which saw particularly strong sales in the Institutional high yield products area, retirement services business, and in retail mutual fund sales through outside broker–dealers. New York Life's Operating revenue of $11.1 billion was up 8%, led by a 23% increase in operating revenue from International operations.
Review of Businesses
U.S. Insurance Operations — The company's U.S. Insurance Operations include its Life and Annuity and Special Markets business units. Life and Annuity sells a full array of products in the United States including individual, bank– and corporate–owned life insurance, lifetime income annuities and a variety of variable and fixed investment annuities. Operating revenue in Life and Annuity increased 4.4% to $7.08 billion in 2005, compared with $6.78 billion in the prior year. New York Life continued its leadership in the Million Dollar Round Table, the industry's most prestigious professional organization for agents. This marked the 51st 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, also a part of U.S. Insurance Operations, is comprised of the AARP Life Insurance Program, long–term care and membership association, all of which had record levels of operating revenue in 2005. Special Markets increased operating revenue by 11.8% to $1.3 billion in 2005, compared with $1.19 billion in 2004. 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 approximately 500 associations across the country. The company's long term care insurance operation now ranks among the top ten providers in this field, according to an industry source.3
New York Life Investment Management — 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 6% increase in the subsidiary's assets under management over 2004, reaching $200 billion during the year. New York Life Investment Management increased operating revenue 7% to $982 million in 2005. Total sales climbed to a record $22.1 billion, up 22% over 2004, and were particularly strong in the institutional high yield product areas, retirement services business, and in retail mutual fund sales through outside broker–dealers.
New York Life Investment Management's team of investment professionals focuses on virtually every sector of the capital markets, and includes:
- MainStay Funds, mutual funds for individual and retirement plan investors.
- MainStay Investments Wealth Strategies, offering separately managed accounts that serve the needs of individuals.
- Guaranteed Products, a premier provider of Guaranteed Investment Products.
- MacKay Shields LLC, McMorgan & Company, NYLIM Fixed Income Investors 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.
New York Life International — New York Life International, with operations in nine markets including China, Hong Kong, India, the Philippines, South Korea, Taiwan, Thailand, Argentina, and Mexico, reported strong revenue gains and insurance sales. Operating revenue grew to $1.8 billion, up 23% over the prior year. Insurance sales increased 20% to $583 million, driven by exceptional growth in the company's operations in India, Thailand and Mexico.
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 three–year old joint venture in China, Haier New York Life, last year received government permission to expand into two new province cities, Chengdu and Qingdao; and received operating licenses for Yantai and Deyang sales offices as well as Nanjing, a provincial capital. In 2005, Max New York Life, the company's joint venture in India, grew the number of licensed agents in India to over 10,900 and expanded its network of offices and affiliates to 57 offices in 37 cities nationwide.
International's career agent sales force continues to grow, with more than 22,000 agents registered in the nine markets.
Moody's Raises New York Life Ratings to Aaa, Cites Market Leadership and Financial Strength
In December 2005, Moody's Investors Service raised New York Life's ratings for financial strength to Aaa, the highest rating it awards. Moody's said the upgrade "is based on New York Life's continued leading position in the domestic life insurance market, mutual form of ownership, strong business and earnings diversification, and substantial financial flexibility, which is based in part on very stable and predictable businesses. The upgrade also reflects the company's strong capitalization, its stable and productive career agency distribution systems, a well–recognized and high–regarded brand name, a strong national and growing international presence, and significant embedded profitability in its existing book of business."
New York Life's financial strength/claims paying ability ratings from other rating agencies include: Standard & Poor's (AA+), 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, 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.
1See attached reconciliation of Accounting Principles Generally Accepted in the United States of America (GAAP) performance measures to non–GAAP performance measures.
2Formerly the American Association of Retired Persons.
3Source: LIMRA International.
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|New York Life Achieves Record Sales, Revenue and Surplus In 2005|