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Theodore Roosevelt once said, “The best prize life has to offer is the chance to work hard at work worth doing.” That’s a notion that I’m proud to say resonates with everyone in our organization.

We understand that the work we do has purpose; it affects not only the lives of people like you who have placed your trust with us, but arguably generations of family members who will follow you. We invite you to review our performance in 2013 and hope you walk away feeling confident that we continue to hold ourselves to the highest standards to ensure we measure up to your expectations.

As we begin 2014, there are many reasons to be cautiously optimistic about the path of our nation’s economy. The equity market had a very strong advance in 2013; interest rates, while still very low from a historical perspective, recorded a marked rise during the past year; unemployment declined to a five-year low; the housing market has been stabilizing; and in a sign of confidence that the economy is indeed regaining its strength, shortly before the year came to a close, the Federal Reserve announced its intention to begin scaling back on its massive stimulus program.

Concerns remain, such as the near-term possibility of an equity market correction, or more fundamentally, the fact that much of the improvement in our unemployment numbers has been driven by people who have stopped looking for work. Moreover, our federal government has not taken any material action to address our long-term debt situation, and we appear positioned for a continued stretch of political motivations trumping sound policy decisions.

Yet, a feeling of optimism is starting to take root. Perhaps we are adjusting to the ongoing uncertainty in the markets and the continued inaction of our political leaders. Or perhaps we are collectively deciding that it is simply time to move forward—more than five years after the start of the Great Recession. In any case, regardless of its source, a sense of confidence is essential to our prosperity. Of course, this ultimately must be grounded in individual action and accountability, but we are long overdue for a return of the optimism and collective pride that remain at the heart of the American success story.

“For nearly 170 years, we have built our business around bringing certainty and security to our customers in good times and bad.”

At New York Life, we appreciate the continued confidence you show in us by entrusting our company year after year with the safety and security of those you love. By doing business with us and our unmatched network of Agents and advisors, you are demonstrating your individual accountability for prioritizing what matters most and keeping the good things going in your life.

For nearly 170 years, we have built our business around bringing certainty and security to our customers in good times and bad. No one can predict the future, but we’ve made it our business to plan and prepare for whatever it may hold. We recognize that no matter what is happening in the world around us, life goes on. And we are here to help you at every stage: life insurance to protect against the unexpected; mutual funds and annuities to help pay for college tuition, or prepare for a comfortable retirement; and long-term care insurance to help ensure you receive the support you need in the event of a disability or chronic illness.

We hope you take great comfort and pride in the financial strength of your mutual company. Our undisputed financial strength anchors our ability to live up to the guarantees and promises we make to you. In the years since the onset of the financial crisis, New York Life has consistently delivered strong results despite unparalleled economic headwinds. And I’m pleased to report the momentum continued in 2013.

You can find the details of our financial performance on pages 8–15 in this Report and online at www.newyorklife.com. By any measure, the past year is one we can all feel very good about. Sales were up across the board; operating earnings, or profits, grew by 11 percent; and surplus, the money over and above the reserves we set aside to pay the benefits we offer, stood at more than $21 billion* at year-end—an all-time record.

Contributions to our success are coming from every corner of the company. The heart of our organization has been, and always will be, our core life insurance operation and our team of career Agents who have led the United States in MDRT° membership for 59 consecutive years. We are also the #1 direct marketer of life insurance in America,** as well as one of the premier providers of life insurance to large professional associations. And our subsidiary, Seguros Monterrey New York Life, remains one of the top life insurance companies in Mexico. The size and strength of our insurance business is the reason why, out of roughly 900 companies selling life insurance in the United States today, not one has a higher rating for financial strength from A.M. Best, Fitch, Moody’s, or Standard & Poor’s than we do.†

“We remain the predominant provider of guaranteed lifetime income annuities in the United States.”

While our combined insurance businesses form the foundation of the company, no other area of the organization is growing more rapidly than our investments operations. This is not happening by chance. During the past few years, we have made a concerted effort to extend beyond our insurance foundation by growing our mutual funds and asset management businesses. The array of products we offer provides our customers with additional solutions for their financial planning needs. And we’re seeing great results. We remain the predominant provider of guaranteed lifetime income annuities in the United States.‡ And mutual fund sales, which have been growing steadily, nearly doubled this year, reflecting both strong flows across the MainStay Funds family and the addition of a few new funds to our portfolio.

The contributions from our investments operations ultimately generate additional surplus and enhance our financial strength—and that is something that benefits all our policyholders. As a mutual life insurer, we have no shareholders. You are our priority. And every dollar we create within our organization is put to use with you in mind, which includes our annual dividend payout for eligible policies.

As I’ve discussed in this letter for the past several years, no economic factor has a greater effect on life insurance companies than the level of interest rates. It affects our dividends, crediting rates, and earnings. While rates have been slowly rising this past year, they still remain well below their long-term average.

“I’m very proud to say that we are the only major mutual U.S. life insurance company to increase both its dividend scale and its total dividend payout in both 2013 and 2014.”

Regardless of the economic climate, when it comes to dividends, we always aim to provide the largest payout we can while ensuring our continued financial strength that backs the benefits we’ve promised to you. Upon reviewing our operating performance this past year, and taking into consideration the additional capital we generated on the company’s equity investments, our Board of Directors agreed to approve a raise to the dividend scale again this year. The total payout for 2014 will exceed $1.4 billion—an increase of more than $100 million over last year. And I’m very proud to say that we are the only major mutual U.S. life insurance company to increase both its dividend scale and its total dividend payout in both 2013 and 2014.*

From an operational and strategic standpoint, we could point to any number of factors as reasons why New York Life remains at the top of the life insurance industry. But in reality, strategies, products, marketing, and other business operations can be copied or replicated by others. What I believe truly separates us from others is our perspective on, and approach to, the business we’re in.

With every product we offer, our goal is to be here to pay that benefit whenever it comes due. That moment is, and always will be, the essence of what our business is all about. And if you visit us at newyorklife.com, you will find just a small sampling of stories that play out every day in the words of our customers and Agents. I want to personally thank them for taking the time to share their experiences, and, in turn, allowing us to share them with you.

We hope our performance in 2013 makes you feel good about your decision to choose New York Life. You can be certain that what we do each year isn’t about having a bigger slice of the pie in the short term; it is always about growing the size of the pie for you and all our customers in the years ahead. Our job—every single day—is to help you remain optimistic and feel good about your future and the future of those you care about most.

Thank you for continuing to make us “The Company You Keep.”

Sincerely,

Ted Mathas
Chairman of the Board,
President and Chief Executive Officer






* Includes Asset Valuation Reserve

° Million Dollar Round Table, the premier association of financial professionals,is an organization that recognizes excellence in the life insurance industry.

** Source: LIMRA International, 3rd quarter YTD 2013 survey results and other publicly available sources

† Source, Third Party Ratings Reports: A.M. Best A++ (as of 6/4/2013), Fitch Ratings AAA (as of 8/29/2013), Moody’s Aaa (as of 1/10/2014), Standard & Poor’s AA+ (as of 6/18/2013).

‡ Source: LIMRA International, 3rd quarter YTD 2013 survey results. Guaranteed Lifetime Income products are issued by New York Life Insurance and Annuity Corporation, a wholly owned subsidiary of New York Life Insurance Company. Guarantees are backed by the claims-paying ability of the issuer.

* Based on publicly available information on New York Life’s peer mutual U.S. life insurers. This peer group is comprised of major mutual U.S. insurance companies for whom life insurance is the primary focus and primary line of business, and whose dividend information is made publicly available.

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