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(Mark one)
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ý
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Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
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For the quarterly period ended September 30, 2017
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¨
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Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
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For the transition period from _________to_________
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DELAWARE
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63-0780404
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(State or other jurisdiction of incorporation or organization)
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(I.R.S. Employer Identification No.)
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3700 South Stonebridge Drive, McKinney, Texas
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75070
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(Address of principal executive offices)
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(Zip Code)
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Large accelerated filer
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ý
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Accelerated filer
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¨
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Non-accelerated filer
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¨
(Do not check if a smaller reporting company)
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Smaller reporting company
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¨
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Emerging growth company
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¨
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If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
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¨
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CLASS
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OUTSTANDING AT October 31, 2017
|
|
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Common Stock,
$1.00 Par Value
|
|
115,446,832
|
|
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|
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Page
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Item 1.
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|||
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Item 2.
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|||
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Item 3.
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|||
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Item 4.
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|||
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|||
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Item 1.
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|||
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Item 1A.
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|||
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Item 2.
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|||
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Item 6.
|
Item 1.
|
Condensed Consolidated Financial Statements
|
|
September 30,
2017 |
|
December 31,
2016 |
||||
Assets:
|
|
|
|
||||
Investments:
|
|
|
|
||||
Fixed maturities—available for sale, at fair value (amortized cost: 2017—$14,914,580; 2016—$14,188,050)
|
$
|
16,652,913
|
|
|
$
|
15,245,861
|
|
Policy loans
|
523,318
|
|
|
507,975
|
|
||
Other long-term investments
|
70,096
|
|
|
53,852
|
|
||
Short-term investments
|
65,482
|
|
|
72,040
|
|
||
Total investments
|
17,311,809
|
|
|
15,879,728
|
|
||
Cash
|
88,462
|
|
|
76,163
|
|
||
Accrued investment income
|
238,278
|
|
|
223,148
|
|
||
Other receivables
|
389,084
|
|
|
384,454
|
|
||
Deferred acquisition costs
|
3,911,800
|
|
|
3,783,158
|
|
||
Goodwill
|
441,591
|
|
|
441,591
|
|
||
Other assets
|
544,011
|
|
|
520,313
|
|
||
Assets related to discontinued operations
|
68,572
|
|
|
127,532
|
|
||
Total assets
|
$
|
22,993,607
|
|
|
$
|
21,436,087
|
|
Liabilities:
|
|
|
|
||||
Future policy benefits
|
$
|
13,298,069
|
|
|
$
|
12,825,837
|
|
Unearned and advance premiums
|
61,536
|
|
|
64,017
|
|
||
Policy claims and other benefits payable
|
318,832
|
|
|
299,565
|
|
||
Other policyholders' funds
|
97,016
|
|
|
96,993
|
|
||
Total policy liabilities
|
13,775,453
|
|
|
13,286,412
|
|
||
Current and deferred income taxes payable
|
2,069,158
|
|
|
1,743,990
|
|
||
Other liabilities
|
492,175
|
|
|
413,760
|
|
||
Short-term debt
|
309,002
|
|
|
264,475
|
|
||
Long-term debt (estimated fair value: 2017—$1,243,232; 2016—$1,233,019)
|
1,130,806
|
|
|
1,133,165
|
|
||
Liabilities related to discontinued operations
|
49,328
|
|
|
27,424
|
|
||
Total liabilities
|
17,825,922
|
|
|
16,869,226
|
|
||
Commitments and Contingencies (
Note 6
)
|
|
|
|
||||
Shareholders’ equity:
|
|
|
|
||||
Preferred stock, par value $1 per share—Authorized 5,000,000 shares; outstanding: -0- in 2017 and 2016
|
—
|
|
|
—
|
|
||
Common stock, par value $1 per share—Authorized 320,000,000 shares; outstanding: (2017—127,218,183 issued, less 11,859,162 held in treasury and 2016—127,218,183 issued, less 9,187,075 held in treasury)
|
127,218
|
|
|
127,218
|
|
||
Additional paid-in capital
|
508,386
|
|
|
490,421
|
|
||
Accumulated other comprehensive income
|
1,039,302
|
|
|
577,574
|
|
||
Retained earnings
|
4,239,582
|
|
|
3,890,798
|
|
||
Treasury stock, at cost
|
(746,803
|
)
|
|
(519,150
|
)
|
||
Total shareholders’ equity
|
5,167,685
|
|
|
4,566,861
|
|
||
Total liabilities and shareholders’ equity
|
$
|
22,993,607
|
|
|
$
|
21,436,087
|
|
|
Three Months Ended
September 30, |
|
Nine Months Ended
September 30, |
||||||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Revenue:
|
|
|
|
|
|
|
|
||||||||
Life premium
|
$
|
576,223
|
|
|
$
|
546,415
|
|
|
$
|
1,725,896
|
|
|
$
|
1,639,156
|
|
Health premium
|
242,991
|
|
|
236,987
|
|
|
730,557
|
|
|
709,936
|
|
||||
Other premium
|
3
|
|
|
9
|
|
|
9
|
|
|
34
|
|
||||
Total premium
|
819,217
|
|
|
783,411
|
|
|
2,456,462
|
|
|
2,349,126
|
|
||||
Net investment income
|
213,872
|
|
|
202,720
|
|
|
634,930
|
|
|
601,415
|
|
||||
Realized investment gains (losses)
|
12,595
|
|
|
3,482
|
|
|
6,142
|
|
|
7,780
|
|
||||
Other income
|
331
|
|
|
160
|
|
|
1,140
|
|
|
963
|
|
||||
Total revenue
|
1,046,015
|
|
|
989,773
|
|
|
3,098,674
|
|
|
2,959,284
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Benefits and expenses:
|
|
|
|
|
|
|
|
||||||||
Life policyholder benefits
|
386,445
|
|
|
369,546
|
|
|
1,168,383
|
|
|
1,101,748
|
|
||||
Health policyholder benefits
|
155,774
|
|
|
153,351
|
|
|
470,104
|
|
|
459,387
|
|
||||
Other policyholder benefits
|
9,000
|
|
|
9,255
|
|
|
26,923
|
|
|
27,475
|
|
||||
Total policyholder benefits
|
551,219
|
|
|
532,152
|
|
|
1,665,410
|
|
|
1,588,610
|
|
||||
Amortization of deferred acquisition costs
|
122,334
|
|
|
116,821
|
|
|
370,363
|
|
|
352,872
|
|
||||
Commissions, premium taxes, and non-deferred acquisition costs
|
67,863
|
|
|
61,153
|
|
|
198,011
|
|
|
185,609
|
|
||||
Other operating expense
|
63,019
|
|
|
57,805
|
|
|
187,788
|
|
|
173,080
|
|
||||
Interest expense
|
20,970
|
|
|
20,381
|
|
|
62,825
|
|
|
62,860
|
|
||||
Total benefits and expenses
|
825,405
|
|
|
788,312
|
|
|
2,484,397
|
|
|
2,363,031
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Income before income taxes
|
220,610
|
|
|
201,461
|
|
|
614,277
|
|
|
596,253
|
|
||||
Income taxes
|
(67,264
|
)
|
|
(59,551
|
)
|
|
(183,390
|
)
|
|
(181,475
|
)
|
||||
Income from continuing operations
|
153,346
|
|
|
141,910
|
|
|
430,887
|
|
|
414,778
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Income (loss) from discontinued operations, net of tax
|
(12
|
)
|
|
9,959
|
|
|
(3,739
|
)
|
|
(447
|
)
|
||||
Net income
|
$
|
153,334
|
|
|
$
|
151,869
|
|
|
$
|
427,148
|
|
|
$
|
414,331
|
|
|
|
|
|
|
|
|
|
||||||||
Basic net income (loss) per common share:
|
|
|
|
|
|
|
|
||||||||
Continuing operations
|
$
|
1.32
|
|
|
$
|
1.19
|
|
|
$
|
3.69
|
|
|
$
|
3.44
|
|
Discontinued operations
|
—
|
|
|
0.08
|
|
|
(0.03
|
)
|
|
—
|
|
||||
Total basic net income per common share
|
$
|
1.32
|
|
|
$
|
1.27
|
|
|
$
|
3.66
|
|
|
$
|
3.44
|
|
|
|
|
|
|
|
|
|
||||||||
Diluted net income (loss) per common share:
|
|
|
|
|
|
|
|
||||||||
Continuing operations
|
$
|
1.29
|
|
|
$
|
1.16
|
|
|
$
|
3.61
|
|
|
$
|
3.38
|
|
Discontinued operations
|
—
|
|
|
0.09
|
|
|
(0.03
|
)
|
|
—
|
|
||||
Total diluted net income per common share
|
$
|
1.29
|
|
|
$
|
1.25
|
|
|
$
|
3.58
|
|
|
$
|
3.38
|
|
|
|
|
|
|
|
|
|
||||||||
Dividends declared per common share
|
$
|
0.15
|
|
|
$
|
0.14
|
|
|
$
|
0.45
|
|
|
$
|
0.42
|
|
|
Three Months Ended
September 30, |
|
Nine Months Ended
September 30, |
||||||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Net income
|
$
|
153,334
|
|
|
$
|
151,869
|
|
|
$
|
427,148
|
|
|
$
|
414,331
|
|
|
|
|
|
|
|
|
|
||||||||
Other comprehensive income (loss):
|
|
|
|
|
|
|
|
||||||||
Unrealized investment gains (losses):
|
|
|
|
|
|
|
|
||||||||
Unrealized gains (losses) on securities:
|
|
|
|
|
|
|
|
||||||||
Unrealized holding gains (losses) arising during period
|
83,216
|
|
|
236,040
|
|
|
692,747
|
|
|
1,397,181
|
|
||||
Reclassification adjustment for (gains) losses on securities included in net income
|
(12,910
|
)
|
|
(3,513
|
)
|
|
(13,264
|
)
|
|
(7,809
|
)
|
||||
Reclassification adjustment for amortization of (discount) and premium
|
119
|
|
|
(927
|
)
|
|
(379
|
)
|
|
(3,495
|
)
|
||||
Foreign exchange adjustment on securities recorded at fair value
|
1,173
|
|
|
(199
|
)
|
|
1,418
|
|
|
849
|
|
||||
Unrealized gains (losses) on securities
|
71,598
|
|
|
231,401
|
|
|
680,522
|
|
|
1,386,726
|
|
||||
Unrealized gains (losses) on other investments
|
473
|
|
|
1,685
|
|
|
3,544
|
|
|
3,568
|
|
||||
Total unrealized investment gains (losses)
|
72,071
|
|
|
233,086
|
|
|
684,066
|
|
|
1,390,294
|
|
||||
Less applicable tax (expense) benefit
|
(25,225
|
)
|
|
(81,583
|
)
|
|
(239,479
|
)
|
|
(486,573
|
)
|
||||
Unrealized investment gains (losses), net of tax
|
46,846
|
|
|
151,503
|
|
|
444,587
|
|
|
903,721
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Unrealized gains (losses) attributable to deferred acquisition costs
|
505
|
|
|
621
|
|
|
(992
|
)
|
|
(4,829
|
)
|
||||
Less applicable tax (expense) benefit
|
(177
|
)
|
|
(216
|
)
|
|
347
|
|
|
1,691
|
|
||||
Unrealized gains (losses) attributable to deferred acquisition costs, net of tax
|
328
|
|
|
405
|
|
|
(645
|
)
|
|
(3,138
|
)
|
||||
|
|
|
|
|
|
|
|
||||||||
Foreign exchange translation adjustments, other than securities
|
8,533
|
|
|
120
|
|
|
16,049
|
|
|
7,262
|
|
||||
Less applicable tax (expense) benefit
|
(2,986
|
)
|
|
(16
|
)
|
|
(4,567
|
)
|
|
(2,454
|
)
|
||||
Foreign exchange translation adjustments, other than securities, net of tax
|
5,547
|
|
|
104
|
|
|
11,482
|
|
|
4,808
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Pension adjustments:
|
|
|
|
|
|
|
|
||||||||
Amortization of pension costs
|
3,108
|
|
|
2,551
|
|
|
9,326
|
|
|
7,654
|
|
||||
Experience gain (loss)
|
—
|
|
|
—
|
|
|
371
|
|
|
791
|
|
||||
Pension adjustments
|
3,108
|
|
|
2,551
|
|
|
9,697
|
|
|
8,445
|
|
||||
Less applicable tax (expense) benefit
|
(1,087
|
)
|
|
(894
|
)
|
|
(3,393
|
)
|
|
(2,957
|
)
|
||||
Pension adjustments, net of tax
|
2,021
|
|
|
1,657
|
|
|
6,304
|
|
|
5,488
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Other comprehensive income (loss)
|
54,742
|
|
|
153,669
|
|
|
461,728
|
|
|
910,879
|
|
||||
Comprehensive income (loss)
|
$
|
208,076
|
|
|
$
|
305,538
|
|
|
$
|
888,876
|
|
|
$
|
1,325,210
|
|
|
|
Preferred Stock
|
|
Common Stock
|
|
Additional Paid-in Capital
|
|
Accumulated Other Comprehensive Income (Loss)
|
|
Retained Earnings
|
|
Treasury Stock
|
|
Total Shareholders’ Equity
|
||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Balance at January 1, 2016
|
|
$
|
—
|
|
|
$
|
130,218
|
|
|
$
|
482,284
|
|
|
$
|
231,947
|
|
|
$
|
3,614,369
|
|
|
$
|
(403,266
|
)
|
|
$
|
4,055,552
|
|
Comprehensive income (loss)
|
|
|
|
|
|
|
|
910,879
|
|
|
414,331
|
|
|
|
|
1,325,210
|
|
|||||||||||
Common dividends declared ($0.42 per share)
|
|
|
|
|
|
|
|
|
|
(50,410
|
)
|
|
|
|
(50,410
|
)
|
||||||||||||
Acquisition of treasury stock
|
|
|
|
|
|
|
|
|
|
|
|
(311,356
|
)
|
|
(311,356
|
)
|
||||||||||||
Stock-based compensation
|
|
|
|
|
|
13,787
|
|
|
|
|
(2,224
|
)
|
|
8,771
|
|
|
20,334
|
|
||||||||||
Exercise of stock options
|
|
|
|
|
|
|
|
|
|
|
(42,040
|
)
|
|
89,093
|
|
|
47,053
|
|
||||||||||
Balance at September 30, 2016
|
|
$
|
—
|
|
|
$
|
130,218
|
|
|
$
|
496,071
|
|
|
$
|
1,142,826
|
|
|
$
|
3,934,026
|
|
|
$
|
(616,758
|
)
|
|
$
|
5,086,383
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
|
|
Preferred Stock
|
|
Common Stock
|
|
Additional Paid-in Capital
|
|
Accumulated Other Comprehensive Income (Loss)
|
|
Retained Earnings
|
|
Treasury Stock
|
|
Total Shareholders’ Equity
|
||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Balance at January 1, 2017
|
|
$
|
—
|
|
|
$
|
127,218
|
|
|
$
|
490,421
|
|
|
$
|
577,574
|
|
|
$
|
3,890,798
|
|
|
$
|
(519,150
|
)
|
|
$
|
4,566,861
|
|
Comprehensive income (loss)
|
|
|
|
|
|
|
|
461,728
|
|
|
427,148
|
|
|
|
|
888,876
|
|
|||||||||||
Common dividends declared ($0.45 per share)
|
|
|
|
|
|
|
|
|
|
(52,304
|
)
|
|
|
|
(52,304
|
)
|
||||||||||||
Acquisition of treasury stock
|
|
|
|
|
|
|
|
|
|
|
|
(301,448
|
)
|
|
(301,448
|
)
|
||||||||||||
Stock-based compensation
|
|
|
|
|
|
17,965
|
|
|
|
|
(606
|
)
|
|
7,450
|
|
|
24,809
|
|
||||||||||
Exercise of stock options
|
|
|
|
|
|
|
|
|
|
|
(25,454
|
)
|
|
66,345
|
|
|
40,891
|
|
||||||||||
Balance at September 30, 2017
|
|
$
|
—
|
|
|
$
|
127,218
|
|
|
$
|
508,386
|
|
|
$
|
1,039,302
|
|
|
$
|
4,239,582
|
|
|
$
|
(746,803
|
)
|
|
$
|
5,167,685
|
|
|
Nine Months Ended September 30,
|
||||||
|
2017
|
|
2016
|
||||
Cash provided from operating activities
|
$
|
1,085,842
|
|
|
$
|
971,926
|
|
|
|
|
|
||||
Cash provided from (used for) investing activities:
|
|
|
|
||||
Investments sold or matured:
|
|
|
|
||||
Fixed maturities available for sale—sold
|
52,951
|
|
|
75,299
|
|
||
Fixed maturities available for sale—matured, called, and repaid
|
306,132
|
|
|
178,873
|
|
||
Other long-term investments
|
3,523
|
|
|
466
|
|
||
Total long-term investments sold or matured
|
362,606
|
|
|
254,638
|
|
||
Acquisition of investments:
|
|
|
|
||||
Fixed maturities—available for sale
|
(1,042,705
|
)
|
|
(910,090
|
)
|
||
Other long-term investments
|
(16,775
|
)
|
|
(20,404
|
)
|
||
Total investments acquired
|
(1,059,480
|
)
|
|
(930,494
|
)
|
||
Net increase in policy loans
|
(15,343
|
)
|
|
(6,623
|
)
|
||
Net (increase) decrease in short-term investments
|
6,556
|
|
|
(11,138
|
)
|
||
Net change in payable or receivable for securities
|
—
|
|
|
94
|
|
||
Additions to property and equipment
|
(13,451
|
)
|
|
(10,138
|
)
|
||
Sale of other assets
|
18
|
|
|
767
|
|
||
Investment in low-income housing interests
|
(13,852
|
)
|
|
(16,126
|
)
|
||
Cash provided from (used for) investing activities
|
(732,946
|
)
|
|
(719,020
|
)
|
||
|
|
|
|
||||
Cash provided from (used for) financing activities:
|
|
|
|
||||
Issuance of common stock
|
40,891
|
|
|
47,053
|
|
||
Cash dividends paid to shareholders
|
(51,532
|
)
|
|
(50,258
|
)
|
||
Proceeds from issuance of debt
|
—
|
|
|
400,000
|
|
||
Payment for debt issuance costs
|
—
|
|
|
(9,638
|
)
|
||
Repayment of debt
|
(1,250
|
)
|
|
(250,000
|
)
|
||
Net borrowing (repayment) of commercial paper
|
42,652
|
|
|
25,266
|
|
||
Acquisition of treasury stock
|
(301,448
|
)
|
|
(311,356
|
)
|
||
Net receipts (payments) from deposit-type product
|
(65,912
|
)
|
|
(57,188
|
)
|
||
Cash provided from (used for) financing activities
|
(336,599
|
)
|
|
(206,121
|
)
|
||
|
|
|
|
||||
Effect of foreign exchange rate changes on cash
|
(3,998
|
)
|
|
(3,268
|
)
|
||
Net increase (decrease) in cash
|
12,299
|
|
|
43,517
|
|
||
Cash at beginning of year
|
76,163
|
|
|
61,383
|
|
||
Cash at end of period
|
$
|
88,462
|
|
|
$
|
104,900
|
|
|
|
Three Months Ended September 30, 2017
|
||||||||||||||||||
|
|
Available
for Sale Assets |
|
Deferred
Acquisition Costs |
|
Foreign
Exchange |
|
Pension
Adjustments |
|
Total
|
||||||||||
Balance at July 1, 2017
|
|
$
|
1,090,055
|
|
|
$
|
(7,655
|
)
|
|
$
|
10,902
|
|
|
$
|
(108,742
|
)
|
|
$
|
984,560
|
|
Other comprehensive income (loss) before reclassifications, net of tax
|
|
55,160
|
|
|
328
|
|
|
5,547
|
|
|
—
|
|
|
61,035
|
|
|||||
Reclassifications, net of tax
|
|
(8,314
|
)
|
|
—
|
|
|
—
|
|
|
2,021
|
|
|
(6,293
|
)
|
|||||
Other comprehensive income (loss)
|
|
46,846
|
|
|
328
|
|
|
5,547
|
|
|
2,021
|
|
|
54,742
|
|
|||||
Balance at September 30, 2017
|
|
$
|
1,136,901
|
|
|
$
|
(7,327
|
)
|
|
$
|
16,449
|
|
|
$
|
(106,721
|
)
|
|
$
|
1,039,302
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
|
Three Months Ended September 30, 2016
|
||||||||||||||||||
|
|
Available
for Sale Assets |
|
Deferred
Acquisition Costs |
|
Foreign
Exchange |
|
Pension
Adjustments |
|
Total
|
||||||||||
Balance at July 1, 2016
|
|
$
|
1,084,551
|
|
|
$
|
(8,658
|
)
|
|
$
|
8,331
|
|
|
$
|
(95,067
|
)
|
|
$
|
989,157
|
|
Other comprehensive income (loss) before reclassifications, net of tax
|
|
154,389
|
|
|
405
|
|
|
104
|
|
|
—
|
|
|
154,898
|
|
|||||
Reclassifications, net of tax
|
|
(2,886
|
)
|
|
—
|
|
|
—
|
|
|
1,657
|
|
|
(1,229
|
)
|
|||||
Other comprehensive income (loss)
|
|
151,503
|
|
|
405
|
|
|
104
|
|
|
1,657
|
|
|
153,669
|
|
|||||
Balance at September 30, 2016
|
|
$
|
1,236,054
|
|
|
$
|
(8,253
|
)
|
|
$
|
8,435
|
|
|
$
|
(93,410
|
)
|
|
$
|
1,142,826
|
|
|
|
Nine Months Ended September 30, 2017
|
||||||||||||||||||
|
|
Available
for Sale Assets |
|
Deferred
Acquisition Costs |
|
Foreign
Exchange |
|
Pension
Adjustments |
|
Total
|
||||||||||
Balance at January 1, 2017
|
|
$
|
692,314
|
|
|
$
|
(6,682
|
)
|
|
$
|
4,967
|
|
|
$
|
(113,025
|
)
|
|
$
|
577,574
|
|
Other comprehensive income (loss) before reclassifications, net of tax
|
|
453,455
|
|
|
(645
|
)
|
|
11,482
|
|
|
241
|
|
|
464,533
|
|
|||||
Reclassifications, net of tax
|
|
(8,868
|
)
|
|
—
|
|
|
—
|
|
|
6,063
|
|
|
(2,805
|
)
|
|||||
Other comprehensive income (loss)
|
|
444,587
|
|
|
(645
|
)
|
|
11,482
|
|
|
6,304
|
|
|
461,728
|
|
|||||
Balance at September 30, 2017
|
|
$
|
1,136,901
|
|
|
$
|
(7,327
|
)
|
|
$
|
16,449
|
|
|
$
|
(106,721
|
)
|
|
$
|
1,039,302
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
|
Nine Months Ended September 30, 2016
|
||||||||||||||||||
|
|
Available
for Sale Assets |
|
Deferred
Acquisition Costs |
|
Foreign
Exchange |
|
Pension
Adjustments |
|
Total
|
||||||||||
Balance at January 1, 2016
|
|
$
|
332,333
|
|
|
$
|
(5,115
|
)
|
|
$
|
3,627
|
|
|
$
|
(98,898
|
)
|
|
$
|
231,947
|
|
Other comprehensive income (loss) before reclassifications, net of tax
|
|
911,069
|
|
|
(3,138
|
)
|
|
4,808
|
|
|
513
|
|
|
913,252
|
|
|||||
Reclassifications, net of tax
|
|
(7,348
|
)
|
|
—
|
|
|
—
|
|
|
4,975
|
|
|
(2,373
|
)
|
|||||
Other comprehensive income (loss)
|
|
903,721
|
|
|
(3,138
|
)
|
|
4,808
|
|
|
5,488
|
|
|
910,879
|
|
|||||
Balance at September 30, 2016
|
|
$
|
1,236,054
|
|
|
$
|
(8,253
|
)
|
|
$
|
8,435
|
|
|
$
|
(93,410
|
)
|
|
$
|
1,142,826
|
|
|
|
Three Months Ended
September 30, |
|
Nine Months Ended
September 30, |
|
Affected line items in the
Statement of Operations
|
||||||||||||
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
|
|||||||||
Unrealized investment gains (losses) on available for sale assets:
|
|
|
|
|
|
|
|
|
|
|
||||||||
Realized (gains) losses
|
|
$
|
(12,910
|
)
|
|
$
|
(3,513
|
)
|
|
$
|
(13,264
|
)
|
|
$
|
(7,809
|
)
|
|
Realized gains (losses)
|
Amortization of (discount) premium
|
|
119
|
|
|
(927
|
)
|
|
(379
|
)
|
|
(3,495
|
)
|
|
Net investment income
|
||||
Total before tax
|
|
(12,791
|
)
|
|
(4,440
|
)
|
|
(13,643
|
)
|
|
(11,304
|
)
|
|
|
||||
Tax
|
|
4,477
|
|
|
1,554
|
|
|
4,775
|
|
|
3,956
|
|
|
Income taxes
|
||||
Total after tax
|
|
(8,314
|
)
|
|
(2,886
|
)
|
|
(8,868
|
)
|
|
(7,348
|
)
|
|
|
||||
Pension adjustments:
|
|
|
|
|
|
|
|
|
|
|
||||||||
Amortization of prior service cost
|
|
118
|
|
|
120
|
|
|
356
|
|
|
360
|
|
|
Other operating expenses
|
||||
Amortization of actuarial gain (loss)
|
|
2,990
|
|
|
2,431
|
|
|
8,970
|
|
|
7,294
|
|
|
Other operating expenses
|
||||
Total before tax
|
|
3,108
|
|
|
2,551
|
|
|
9,326
|
|
|
7,654
|
|
|
|
||||
Tax
|
|
(1,087
|
)
|
|
(894
|
)
|
|
(3,263
|
)
|
|
(2,679
|
)
|
|
Income taxes
|
||||
Total after tax
|
|
2,021
|
|
|
1,657
|
|
|
6,063
|
|
|
4,975
|
|
|
|
||||
Total reclassifications (after tax)
|
|
$
|
(6,293
|
)
|
|
$
|
(1,229
|
)
|
|
$
|
(2,805
|
)
|
|
$
|
(2,373
|
)
|
|
|
|
Cost or
Amortized
Cost
|
|
Gross
Unrealized
Gains
|
|
Gross
Unrealized
Losses
|
|
Fair Value
(1)
|
|
% of Total
Fixed
Maturities
(2)
|
||||||||
Fixed maturities available for sale:
|
|
|
|
|
|
|
|
|
|
||||||||
U.S. Government direct, guaranteed, and government-sponsored enterprises
|
$
|
387,985
|
|
|
$
|
12,800
|
|
|
$
|
(1,098
|
)
|
|
$
|
399,687
|
|
|
2
|
States, municipalities, and political subdivisions
|
1,160,537
|
|
|
127,675
|
|
|
(108
|
)
|
|
1,288,104
|
|
|
8
|
||||
Foreign governments
|
20,939
|
|
|
1,607
|
|
|
—
|
|
|
22,546
|
|
|
—
|
||||
Corporates, by sector:
|
|
|
|
|
|
|
|
|
|
||||||||
Financial
|
3,199,469
|
|
|
426,345
|
|
|
(25,880
|
)
|
|
3,599,934
|
|
|
22
|
||||
Utilities
|
1,948,519
|
|
|
324,060
|
|
|
(2,655
|
)
|
|
2,269,924
|
|
|
14
|
||||
Energy
|
1,602,054
|
|
|
185,296
|
|
|
(28,070
|
)
|
|
1,759,280
|
|
|
11
|
||||
Other corporate sectors
|
6,025,262
|
|
|
666,120
|
|
|
(22,670
|
)
|
|
6,668,712
|
|
|
40
|
||||
Total corporates
|
12,775,304
|
|
|
1,601,821
|
|
|
(79,275
|
)
|
|
14,297,850
|
|
|
87
|
||||
Collateralized debt obligations
|
59,204
|
|
|
19,558
|
|
|
(8,994
|
)
|
|
69,768
|
|
|
—
|
||||
Other asset-backed securities
|
145,224
|
|
|
5,018
|
|
|
(17
|
)
|
|
150,225
|
|
|
1
|
||||
Redeemable preferred stocks, by sector:
|
|
|
|
|
|
|
|
|
|
||||||||
Financial
|
336,822
|
|
|
60,159
|
|
|
(3,030
|
)
|
|
393,951
|
|
|
2
|
||||
Utilities
|
28,565
|
|
|
2,333
|
|
|
(116
|
)
|
|
30,782
|
|
|
—
|
||||
Total redeemable preferred stocks
|
365,387
|
|
|
62,492
|
|
|
(3,146
|
)
|
|
424,733
|
|
|
2
|
||||
Total fixed maturities
|
$
|
14,914,580
|
|
|
$
|
1,830,971
|
|
|
$
|
(92,638
|
)
|
|
$
|
16,652,913
|
|
|
100
|
|
September 30, 2017
|
||||||
|
Amortized
Cost |
|
Fair Value
|
||||
Fixed maturities available for sale:
|
|
|
|
||||
Due in one year or less
|
$
|
140,702
|
|
|
$
|
143,863
|
|
Due after one year through five years
|
660,487
|
|
|
705,847
|
|
||
Due after five years through ten years
|
1,430,894
|
|
|
1,604,091
|
|
||
Due after ten years through twenty years
|
4,397,807
|
|
|
5,084,516
|
|
||
Due after twenty years
|
8,079,191
|
|
|
8,893,450
|
|
||
Mortgage-backed and asset-backed securities
|
205,499
|
|
|
221,146
|
|
||
|
$
|
14,914,580
|
|
|
$
|
16,652,913
|
|
|
Three Months Ended
September 30, |
|
Nine Months Ended
September 30, |
||||||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Proceeds from sales
|
$
|
52,951
|
|
|
$
|
24,000
|
|
|
$
|
52,951
|
|
|
$
|
75,299
|
|
Gross realized gains
|
4,851
|
|
|
2,577
|
|
|
4,851
|
|
|
6,133
|
|
||||
Gross realized losses
|
—
|
|
|
—
|
|
|
—
|
|
|
(214
|
)
|
Fair Value Measurements at September 30, 2017 using:
|
||||||||||||||||
Description
|
|
Quoted Prices
in Active
Markets for
Identical
Assets
(Level 1)
|
|
Significant Other Observable Inputs
(Level 2)
|
|
Significant Unobservable Inputs
(Level 3)
|
|
Total Fair
Value
|
||||||||
Bonds:
|
|
|
|
|
|
|
|
|
||||||||
U.S. Government direct, guaranteed, and government-sponsored enterprises
|
|
$
|
—
|
|
|
$
|
399,687
|
|
|
$
|
—
|
|
|
$
|
399,687
|
|
States, municipalities, and political subdivisions
|
|
39,100
|
|
|
1,249,004
|
|
|
—
|
|
|
1,288,104
|
|
||||
Foreign governments
|
|
—
|
|
|
22,546
|
|
|
—
|
|
|
22,546
|
|
||||
Corporates, by sector:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Financial
|
|
—
|
|
|
3,537,728
|
|
|
62,206
|
|
|
3,599,934
|
|
||||
Utilities
|
|
—
|
|
|
2,114,600
|
|
|
155,324
|
|
|
2,269,924
|
|
||||
Energy
|
|
—
|
|
|
1,717,538
|
|
|
41,742
|
|
|
1,759,280
|
|
||||
Other corporate sectors
|
|
3,225
|
|
|
6,340,276
|
|
|
325,211
|
|
|
6,668,712
|
|
||||
Total corporates
|
|
3,225
|
|
|
13,710,142
|
|
|
584,483
|
|
|
14,297,850
|
|
||||
Collateralized debt obligations
|
|
—
|
|
|
—
|
|
|
69,768
|
|
|
69,768
|
|
||||
Other asset-backed securities
|
|
—
|
|
|
135,842
|
|
|
14,383
|
|
|
150,225
|
|
||||
Redeemable preferred stocks, by sector:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Financial
|
|
—
|
|
|
393,951
|
|
|
—
|
|
|
393,951
|
|
||||
Utilities
|
|
—
|
|
|
30,782
|
|
|
—
|
|
|
30,782
|
|
||||
Total redeemable preferred stocks
|
|
—
|
|
|
424,733
|
|
|
—
|
|
|
424,733
|
|
||||
Total fixed maturities
|
|
$
|
42,325
|
|
|
$
|
15,941,954
|
|
|
$
|
668,634
|
|
|
$
|
16,652,913
|
|
Percent of total
|
|
0.3
|
%
|
|
95.7
|
%
|
|
4.0
|
%
|
|
100.0
|
%
|
|
Nine Months Ended September 30, 2017
|
||||||||||||||
|
Asset-
Backed Securities |
|
Collateralized
Debt Obligations |
|
Corporates
(1)
|
|
Total
|
||||||||
Balance at January 1, 2017
|
$
|
—
|
|
|
$
|
63,503
|
|
|
$
|
559,600
|
|
|
$
|
623,103
|
|
Total gains or losses:
|
|
|
|
|
|
|
|
||||||||
Included in realized gains/losses
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Included in other comprehensive income
|
595
|
|
|
7,787
|
|
|
10,614
|
|
|
18,996
|
|
||||
Acquisitions
|
14,000
|
|
|
—
|
|
|
21,666
|
|
|
35,666
|
|
||||
Sales
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Amortization
|
—
|
|
|
3,705
|
|
|
14
|
|
|
3,719
|
|
||||
Other
(2)
|
(212
|
)
|
|
(5,227
|
)
|
|
(7,411
|
)
|
|
(12,850
|
)
|
||||
Transfers in and/or out of Level 3
(3)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Balance at September 30, 2017
|
$
|
14,383
|
|
|
$
|
69,768
|
|
|
$
|
584,483
|
|
|
$
|
668,634
|
|
Percent of total fixed maturities
|
0.1
|
%
|
|
0.4
|
%
|
|
3.5
|
%
|
|
4.0
|
%
|
||||
|
|
|
|
|
|
|
|
||||||||
|
Nine Months Ended September 30, 2016
|
||||||||||||||
|
Asset-
Backed Securities |
|
Collateralized
Debt Obligations |
|
Corporates
(1)
|
|
Total
|
||||||||
Balance at January 1, 2016
|
$
|
—
|
|
|
$
|
70,382
|
|
|
$
|
530,806
|
|
|
$
|
601,188
|
|
Total gains or losses:
|
|
|
|
|
|
|
|
||||||||
Included in realized gains/losses
|
—
|
|
|
—
|
|
|
788
|
|
|
788
|
|
||||
Included in other comprehensive income
|
—
|
|
|
(3,879
|
)
|
|
33,365
|
|
|
29,486
|
|
||||
Acquisitions
|
—
|
|
|
—
|
|
|
33,662
|
|
|
33,662
|
|
||||
Sales
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Amortization
|
—
|
|
|
3,511
|
|
|
14
|
|
|
3,525
|
|
||||
Other
(2)
|
—
|
|
|
(6,732
|
)
|
|
(10,882
|
)
|
|
(17,614
|
)
|
||||
Transfers in and/or out of Level 3
(3)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Balance at September 30, 2016
|
$
|
—
|
|
|
$
|
63,282
|
|
|
$
|
587,753
|
|
|
$
|
651,035
|
|
Percent of total fixed maturities
|
—
|
%
|
|
0.4
|
%
|
|
3.7
|
%
|
|
4.1
|
%
|
|
|
Less than
Twelve
Months
|
|
Twelve
Months
or Longer
|
|
Total
|
|||
Number of issues (CUSIP numbers) held:
|
|
|
|
|
|
|
|||
As of September 30, 2017
|
|
151
|
|
|
109
|
|
|
260
|
|
As of December 31, 2016
|
|
407
|
|
|
94
|
|
|
501
|
|
|
|
Less than
Twelve Months
|
|
Twelve Months
or Longer
|
|
Total
|
||||||||||||||||||
Description of Securities
|
|
Fair Value
|
|
Unrealized
Loss
|
|
Fair Value
|
|
Unrealized
Loss
|
|
Fair Value
|
|
Unrealized
Loss
|
||||||||||||
Investment grade securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Bonds:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
U.S. Government direct, guaranteed, and government-sponsored enterprises
|
|
$
|
97,370
|
|
|
$
|
(610
|
)
|
|
$
|
5,422
|
|
|
$
|
(488
|
)
|
|
$
|
102,792
|
|
|
$
|
(1,098
|
)
|
States, municipalities and political subdivisions
|
|
10,115
|
|
|
(70
|
)
|
|
691
|
|
|
(2
|
)
|
|
10,806
|
|
|
(72
|
)
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Corporates, by sector:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Financial
|
|
94,944
|
|
|
(1,024
|
)
|
|
65,729
|
|
|
(2,271
|
)
|
|
160,673
|
|
|
(3,295
|
)
|
||||||
Utilities
|
|
101,687
|
|
|
(1,643
|
)
|
|
40,075
|
|
|
(1,012
|
)
|
|
141,762
|
|
|
(2,655
|
)
|
||||||
Energy
|
|
37,009
|
|
|
(512
|
)
|
|
93,841
|
|
|
(6,555
|
)
|
|
130,850
|
|
|
(7,067
|
)
|
||||||
Other corporate sectors
|
|
369,323
|
|
|
(6,254
|
)
|
|
247,324
|
|
|
(11,047
|
)
|
|
616,647
|
|
|
(17,301
|
)
|
||||||
Total corporates
|
|
602,963
|
|
|
(9,433
|
)
|
|
446,969
|
|
|
(20,885
|
)
|
|
1,049,932
|
|
|
(30,318
|
)
|
||||||
Other asset-backed securities
|
|
9,983
|
|
|
(17
|
)
|
|
—
|
|
|
—
|
|
|
9,983
|
|
|
(17
|
)
|
||||||
Redeemable preferred stocks, by sector:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Utilities
|
|
5,947
|
|
|
(116
|
)
|
|
—
|
|
|
—
|
|
|
5,947
|
|
|
(116
|
)
|
||||||
Total redeemable preferred stocks
|
|
5,947
|
|
|
(116
|
)
|
|
—
|
|
|
—
|
|
|
5,947
|
|
|
(116
|
)
|
||||||
Total investment grade securities
|
|
726,378
|
|
|
(10,246
|
)
|
|
453,082
|
|
|
(21,375
|
)
|
|
1,179,460
|
|
|
(31,621
|
)
|
||||||
Below investment grade securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Bonds:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
States, municipalities and political subdivisions
|
|
269
|
|
|
(36
|
)
|
|
—
|
|
|
—
|
|
|
269
|
|
|
(36
|
)
|
||||||
Corporates, by sector:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Financial
|
|
—
|
|
|
—
|
|
|
83,164
|
|
|
(22,585
|
)
|
|
83,164
|
|
|
(22,585
|
)
|
||||||
Energy
|
|
—
|
|
|
—
|
|
|
78,721
|
|
|
(21,003
|
)
|
|
78,721
|
|
|
(21,003
|
)
|
||||||
Other corporate sectors
|
|
—
|
|
|
—
|
|
|
45,330
|
|
|
(5,369
|
)
|
|
45,330
|
|
|
(5,369
|
)
|
||||||
Total corporates
|
|
—
|
|
|
—
|
|
|
207,215
|
|
|
(48,957
|
)
|
|
207,215
|
|
|
(48,957
|
)
|
||||||
Collateralized debt obligations
|
|
—
|
|
|
—
|
|
|
11,006
|
|
|
(8,994
|
)
|
|
11,006
|
|
|
(8,994
|
)
|
||||||
Redeemable preferred stocks, by sector:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Financial
|
|
—
|
|
|
—
|
|
|
24,080
|
|
|
(3,030
|
)
|
|
24,080
|
|
|
(3,030
|
)
|
||||||
Total redeemable preferred stocks
|
|
—
|
|
|
—
|
|
|
24,080
|
|
|
(3,030
|
)
|
|
24,080
|
|
|
(3,030
|
)
|
||||||
Total below investment grade securities
|
|
269
|
|
|
(36
|
)
|
|
242,301
|
|
|
(60,981
|
)
|
|
242,570
|
|
|
(61,017
|
)
|
||||||
Total fixed maturities
|
|
$
|
726,647
|
|
|
$
|
(10,282
|
)
|
|
$
|
695,383
|
|
|
$
|
(82,356
|
)
|
|
$
|
1,422,030
|
|
|
$
|
(92,638
|
)
|
|
September 30,
2017 |
|
December 31,
2016 |
||||
Assets:
|
|
|
|
||||
Due premiums
|
$
|
3,945
|
|
|
$
|
8,840
|
|
Other receivables
(1)
|
64,627
|
|
|
118,692
|
|
||
Total assets related to discontinued operations
|
68,572
|
|
|
127,532
|
|
||
|
|
|
|
||||
Liabilities:
|
|
|
|
||||
Risk sharing payable
|
9,065
|
|
|
8,374
|
|
||
Current and deferred income taxes payable
|
1,630
|
|
|
3,820
|
|
||
Other
(2)
|
38,633
|
|
|
15,230
|
|
||
Total liabilities related to discontinued operations
|
49,328
|
|
|
27,424
|
|
||
|
|
|
|
||||
Net assets
|
$
|
19,244
|
|
|
$
|
100,108
|
|
|
Three Months Ended
September 30, |
|
Nine Months Ended
September 30, |
||||||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Revenue:
|
|
|
|
|
|
|
|
||||||||
Health premium
|
$
|
(48
|
)
|
|
$
|
53,632
|
|
|
$
|
(343
|
)
|
|
$
|
165,105
|
|
|
|
|
|
|
|
|
|
||||||||
Benefits and expenses:
|
|
|
|
|
|
|
|
||||||||
Health policyholder benefits
|
(115
|
)
|
|
33,331
|
|
|
3,817
|
|
|
146,683
|
|
||||
Amortization of deferred acquisition costs
|
—
|
|
|
1,018
|
|
|
—
|
|
|
2,958
|
|
||||
Commissions, premium taxes, and non-deferred acquisition expenses
|
53
|
|
|
3,352
|
|
|
783
|
|
|
12,253
|
|
||||
Other operating expense
|
32
|
|
|
1,222
|
|
|
809
|
|
|
4,512
|
|
||||
Total benefits and expenses
|
(30
|
)
|
|
38,923
|
|
|
5,409
|
|
|
166,406
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Income (loss) before income taxes for discontinued operations
|
(18
|
)
|
|
14,709
|
|
|
(5,752
|
)
|
|
(1,301
|
)
|
||||
Gain from sale of discontinued operations
|
—
|
|
|
613
|
|
|
—
|
|
|
613
|
|
||||
Income tax benefit (expense)
|
6
|
|
|
(5,363
|
)
|
|
2,013
|
|
|
241
|
|
||||
Income (loss) from discontinued operations
|
$
|
(12
|
)
|
|
$
|
9,959
|
|
|
$
|
(3,739
|
)
|
|
$
|
(447
|
)
|
|
Nine Months Ended
September 30, |
||||||
|
2017
|
|
2016
|
||||
Net cash provided from (used for) discontinued operations
|
$
|
77,125
|
|
|
$
|
82,565
|
|
|
Nine Months Ended
September 30, |
||||||
|
2017
|
|
2016
|
||||
Balance at beginning of period
|
$
|
143,128
|
|
|
$
|
137,120
|
|
Incurred related to:
|
|
|
|
||||
Current year
|
393,747
|
|
|
388,998
|
|
||
Prior years
|
(10,745
|
)
|
|
(5,710
|
)
|
||
Total incurred
|
383,002
|
|
|
383,288
|
|
||
Paid related to:
|
|
|
|
||||
Current year
|
279,563
|
|
|
275,388
|
|
||
Prior years
|
103,010
|
|
|
102,435
|
|
||
Total paid
|
382,573
|
|
|
377,823
|
|
||
Balance at end of period
|
$
|
143,557
|
|
|
$
|
142,585
|
|
|
September 30,
2017 |
|
December 31, 2016
|
||||
Policy claims and other benefits payable:
|
|
|
|
||||
Short-duration contracts
|
$
|
23,193
|
|
|
$
|
26,721
|
|
Insurance lines other than short duration—health
|
120,364
|
|
|
116,407
|
|
||
Insurance lines other than short duration—life
|
175,275
|
|
|
156,437
|
|
||
Total policy claims and other benefits payable
|
$
|
318,832
|
|
|
$
|
299,565
|
|
|
As of September 30, 2017
|
||
Accident Year
|
Total of incurred-but-not-reported liabilities plus expected development on reported claims
|
||
2013
|
$
|
—
|
|
2014
|
1
|
|
|
2015
|
46
|
|
|
2016
|
1,022
|
|
|
2017
|
22,124
|
|
|
Total
|
$
|
23,193
|
|
|
Three Months Ended September 30,
|
||||||||||||||
|
Pension Benefits
|
|
Other Benefits
|
||||||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Service cost
|
$
|
4,486
|
|
|
$
|
3,894
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Interest cost
|
5,552
|
|
|
5,430
|
|
|
249
|
|
|
212
|
|
||||
Expected return on assets
|
(5,900
|
)
|
|
(5,782
|
)
|
|
—
|
|
|
—
|
|
||||
Amortization:
|
|
|
|
|
|
|
|
||||||||
Prior service cost
|
118
|
|
|
120
|
|
|
—
|
|
|
—
|
|
||||
Actuarial (gain) loss
|
2,952
|
|
|
2,423
|
|
|
38
|
|
|
8
|
|
||||
Direct recognition of expense
|
—
|
|
|
—
|
|
|
111
|
|
|
45
|
|
||||
Net periodic benefit cost
|
$
|
7,208
|
|
|
$
|
6,085
|
|
|
$
|
398
|
|
|
$
|
265
|
|
|
|
|
|
|
|
|
|
||||||||
|
Nine Months Ended September 30,
|
||||||||||||||
|
Pension Benefits
|
|
Other Benefits
|
||||||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Service cost
|
$
|
13,457
|
|
|
$
|
11,682
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Interest cost
|
16,653
|
|
|
16,294
|
|
|
749
|
|
|
636
|
|
||||
Expected return on assets
|
(17,697
|
)
|
|
(17,346
|
)
|
|
—
|
|
|
—
|
|
||||
Amortization:
|
|
|
|
|
|
|
|
||||||||
Prior service cost
|
356
|
|
|
360
|
|
|
—
|
|
|
—
|
|
||||
Actuarial (gain)/loss
|
8,855
|
|
|
7,270
|
|
|
115
|
|
|
24
|
|
||||
Direct recognition of expense
|
—
|
|
|
—
|
|
|
323
|
|
|
99
|
|
||||
Net periodic benefit cost
|
$
|
21,624
|
|
|
$
|
18,260
|
|
|
$
|
1,187
|
|
|
$
|
759
|
|
|
September 30, 2017
|
|
December 31, 2016
|
||||||||
|
Amount
|
|
%
|
|
Amount
|
|
%
|
||||
Corporate bonds
|
$
|
172,587
|
|
|
47
|
|
$
|
160,036
|
|
|
49
|
Exchange traded fund
(1)
|
153,824
|
|
|
42
|
|
134,771
|
|
|
41
|
||
Other bonds
|
259
|
|
|
—
|
|
258
|
|
|
—
|
||
Guaranteed annuity contract
(2)
|
21,163
|
|
|
6
|
|
18,997
|
|
|
6
|
||
Short-term investments
|
12,676
|
|
|
4
|
|
7,391
|
|
|
2
|
||
Other
|
5,118
|
|
|
1
|
|
7,418
|
|
|
2
|
||
Total
|
$
|
365,627
|
|
|
100
|
|
$
|
328,871
|
|
|
100
|
(1)
|
A fund including marketable securities that mirror the S&P 500 index.
|
(2)
|
Representing a guaranteed annuity contract issued by Torchmark's subsidiary, American Income Life Insurance Company, to fund the obligations of the American Income Pension Plan.
|
|
September 30,
2017 |
|
December 31, 2016
|
||||
Funded defined benefit pension
|
$
|
475,927
|
|
|
$
|
449,613
|
|
SERP
(1)
(Active)
|
77,223
|
|
|
74,687
|
|
||
SERP
(1)
(Closed)
|
2,827
|
|
|
3,222
|
|
||
Pension Benefit Obligation
|
$
|
555,977
|
|
|
$
|
527,522
|
|
(1)
|
Supplemental executive retirement plan (SERP).
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||
Basic weighted average shares outstanding
|
115,921,134
|
|
|
119,480,642
|
|
|
116,772,652
|
|
|
120,476,813
|
|
Weighted average dilutive options outstanding
|
2,521,815
|
|
|
2,430,121
|
|
|
2,540,955
|
|
|
2,209,739
|
|
Diluted weighted average shares outstanding
|
118,442,949
|
|
|
121,910,763
|
|
|
119,313,607
|
|
|
122,686,552
|
|
Antidilutive shares
|
—
|
|
|
—
|
|
|
1,174,469
|
|
|
—
|
|
|
Three Months Ended September 30, 2017
|
|||||||||||||||||||||||||||
|
Life
|
|
Health
|
|
Annuity
|
|
Investment
|
|
Other &
Corporate |
|
Adjustments
|
|
|
Consolidated
|
||||||||||||||
Revenue:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Premium
|
$
|
576,223
|
|
|
$
|
242,991
|
|
|
$
|
3
|
|
|
|
|
|
|
|
|
|
$
|
819,217
|
|
||||||
Net investment income
|
|
|
|
|
|
|
$
|
213,872
|
|
|
|
|
|
|
|
213,872
|
|
|||||||||||
Other income
|
|
|
|
|
|
|
|
|
$
|
361
|
|
|
$
|
(30
|
)
|
|
(2)
|
331
|
|
|||||||||
Total revenue
|
576,223
|
|
|
242,991
|
|
|
3
|
|
|
213,872
|
|
|
361
|
|
|
(30
|
)
|
|
|
1,033,420
|
|
|||||||
Expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Policy benefits
|
386,445
|
|
|
155,774
|
|
|
9,000
|
|
|
|
|
|
|
|
|
|
|
551,219
|
|
|||||||||
Required interest on reserves
|
(152,862
|
)
|
|
(19,617
|
)
|
|
(12,433
|
)
|
|
184,912
|
|
|
|
|
|
|
|
—
|
|
|||||||||
Required interest on DAC
|
46,893
|
|
|
5,881
|
|
|
172
|
|
|
(52,946
|
)
|
|
|
|
|
|
|
—
|
|
|||||||||
Amortization of acquisition costs
|
98,268
|
|
|
23,458
|
|
|
608
|
|
|
|
|
|
|
|
|
|
122,334
|
|
||||||||||
Commissions, premium taxes, and non-deferred acquisition costs
|
44,748
|
|
|
21,746
|
|
|
7
|
|
|
|
|
|
|
1,362
|
|
|
(2,3)
|
67,863
|
|
|||||||||
Insurance administrative expense
(1)
|
|
|
|
|
|
|
|
|
52,426
|
|
|
|
|
|
|
52,426
|
|
|||||||||||
Parent expense
|
|
|
|
|
|
|
|
|
2,330
|
|
|
|
|
|
2,330
|
|
||||||||||||
Stock compensation expense
|
|
|
|
|
|
|
|
|
8,263
|
|
|
|
|
|
8,263
|
|
||||||||||||
Interest expense
|
|
|
|
|
|
|
20,970
|
|
|
|
|
|
|
|
20,970
|
|
||||||||||||
Total expenses
|
423,492
|
|
|
187,242
|
|
|
(2,646
|
)
|
|
152,936
|
|
|
63,019
|
|
|
1,362
|
|
|
|
825,405
|
|
|||||||
Subtotal
|
152,731
|
|
|
55,749
|
|
|
2,649
|
|
|
60,936
|
|
|
(62,658
|
)
|
|
(1,392
|
)
|
|
|
208,015
|
|
|||||||
Non-operating items
|
|
|
|
|
|
|
|
|
|
|
1,392
|
|
|
(3)
|
1,392
|
|
||||||||||||
Measure of segment profitability (pretax)
|
$
|
152,731
|
|
|
$
|
55,749
|
|
|
$
|
2,649
|
|
|
$
|
60,936
|
|
|
$
|
(62,658
|
)
|
|
$
|
—
|
|
|
|
209,407
|
|
|
Deduct applicable income taxes
|
|
|
(63,342
|
)
|
||||||||||||||||||||||||
Segment profits after tax
|
|
|
146,065
|
|
||||||||||||||||||||||||
Add back income taxes applicable to segment profitability
|
|
|
63,342
|
|
||||||||||||||||||||||||
Add (deduct) realized investment gains (losses)
|
|
|
12,595
|
|
||||||||||||||||||||||||
Add (deduct) guaranty fund assessments
(3)
|
|
|
(1,392
|
)
|
||||||||||||||||||||||||
Pretax income from continuing operations per Condensed Consolidated Statements of Operations
|
|
|
$
|
220,610
|
|
|
Three Months Ended September 30, 2016
|
|||||||||||||||||||||||||||
|
Life
|
|
Health
|
|
Annuity
|
|
Investment
|
|
Other &
Corporate |
|
Adjustments
|
|
|
Consolidated
|
||||||||||||||
Revenue:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Premium
|
$
|
546,415
|
|
|
$
|
236,987
|
|
|
$
|
9
|
|
|
|
|
|
|
|
|
|
$
|
783,411
|
|
||||||
Net investment income
|
|
|
|
|
|
|
$
|
202,720
|
|
|
|
|
|
|
|
202,720
|
|
|||||||||||
Other income
|
|
|
|
|
|
|
|
|
$
|
199
|
|
|
$
|
(39
|
)
|
|
(2)
|
160
|
|
|||||||||
Total revenue
|
546,415
|
|
|
236,987
|
|
|
9
|
|
|
202,720
|
|
|
199
|
|
|
(39
|
)
|
|
|
986,291
|
|
|||||||
Expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Policy benefits
|
369,546
|
|
|
153,351
|
|
|
9,255
|
|
|
|
|
|
|
|
|
|
532,152
|
|
||||||||||
Required interest on reserves
|
(145,295
|
)
|
|
(18,476
|
)
|
|
(12,761
|
)
|
|
176,532
|
|
|
|
|
|
|
|
—
|
|
|||||||||
Required interest on DAC
|
44,950
|
|
|
5,789
|
|
|
192
|
|
|
(50,931
|
)
|
|
|
|
|
|
|
—
|
|
|||||||||
Amortization of acquisition costs
|
93,496
|
|
|
22,643
|
|
|
682
|
|
|
|
|
|
|
|
|
|
116,821
|
|
||||||||||
Commissions, premium taxes, and non-deferred acquisition costs
|
40,577
|
|
|
20,604
|
|
|
11
|
|
|
|
|
|
|
(39
|
)
|
|
(2)
|
61,153
|
|
|||||||||
Insurance administrative expense
(1)
|
|
|
|
|
|
|
|
|
49,248
|
|
|
257
|
|
|
|
49,505
|
|
|||||||||||
Parent expense
|
|
|
|
|
|
|
|
|
1,955
|
|
|
|
|
|
1,955
|
|
||||||||||||
Stock compensation expense
|
|
|
|
|
|
|
|
|
6,345
|
|
|
|
|
|
6,345
|
|
||||||||||||
Interest expense
|
|
|
|
|
|
|
20,381
|
|
|
|
|
|
|
|
20,381
|
|
||||||||||||
Total expenses
|
403,274
|
|
|
183,911
|
|
|
(2,621
|
)
|
|
145,982
|
|
|
57,548
|
|
|
218
|
|
|
|
788,312
|
|
|||||||
Subtotal
|
143,141
|
|
|
53,076
|
|
|
2,630
|
|
|
56,738
|
|
|
(57,349
|
)
|
|
(257
|
)
|
|
|
197,979
|
|
|||||||
Non-operating items
|
|
|
|
|
|
|
|
|
|
|
257
|
|
|
|
257
|
|
||||||||||||
Measure of segment profitability (pretax)
|
$
|
143,141
|
|
|
$
|
53,076
|
|
|
$
|
2,630
|
|
|
$
|
56,738
|
|
|
$
|
(57,349
|
)
|
|
$
|
—
|
|
|
|
198,236
|
|
|
Deduct applicable income taxes
|
|
|
(58,422
|
)
|
||||||||||||||||||||||||
Segment profits after tax
|
|
|
139,814
|
|
||||||||||||||||||||||||
Add back income taxes applicable to segment profitability
|
|
|
58,422
|
|
||||||||||||||||||||||||
Add (deduct) realized investment gains (losses)
|
|
|
3,482
|
|
||||||||||||||||||||||||
Add (deduct) non-operating fees
|
|
|
(257
|
)
|
||||||||||||||||||||||||
Pretax income from continuing operations per Condensed Consolidated Statements of Operations
|
|
|
$
|
201,461
|
|
|
Nine Months Ended September 30, 2017
|
|||||||||||||||||||||||||||
|
Life
|
|
Health
|
|
Annuity
|
|
Investment
|
|
Other &
Corporate |
|
Adjustments
|
|
|
Consolidated
|
||||||||||||||
Revenue:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Premium
|
$
|
1,725,896
|
|
|
$
|
730,557
|
|
|
$
|
9
|
|
|
|
|
|
|
|
|
|
|
$
|
2,456,462
|
|
|||||
Net investment income
|
|
|
|
|
|
|
$
|
634,930
|
|
|
|
|
|
|
|
|
634,930
|
|
||||||||||
Other income
|
|
|
|
|
|
|
|
|
$
|
1,239
|
|
|
$
|
(99
|
)
|
|
(2)
|
1,140
|
|
|||||||||
Total revenue
|
1,725,896
|
|
|
730,557
|
|
|
9
|
|
|
634,930
|
|
|
1,239
|
|
|
(99
|
)
|
|
|
3,092,532
|
|
|||||||
Expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Policy benefits
|
1,166,289
|
|
|
470,104
|
|
|
26,923
|
|
|
|
|
|
|
2,094
|
|
|
(3)
|
1,665,410
|
|
|||||||||
Required interest on reserves
|
(452,339
|
)
|
|
(57,859
|
)
|
|
(37,245
|
)
|
|
547,443
|
|
|
|
|
|
|
|
—
|
|
|||||||||
Required interest on DAC
|
139,042
|
|
|
17,530
|
|
|
524
|
|
|
(157,096
|
)
|
|
|
|
|
|
|
—
|
|
|||||||||
Amortization of acquisition costs
|
296,646
|
|
|
71,801
|
|
|
1,916
|
|
|
|
|
|
|
|
|
|
370,363
|
|
||||||||||
Commissions, premium taxes, and non-deferred acquisition costs
|
132,094
|
|
|
64,599
|
|
|
25
|
|
|
|
|
|
|
|
|
1,293
|
|
|
(2,4)
|
198,011
|
|
|||||||
Insurance administrative expense
(1)
|
|
|
|
|
|
|
|
|
|
|
|
|
155,751
|
|
|
|
|
|
|
155,751
|
|
|||||||
Parent expense
|
|
|
|
|
|
|
|
|
|
|
|
|
7,228
|
|
|
|
|
|
|
7,228
|
|
|||||||
Stock compensation expense
|
|
|
|
|
|
|
|
|
|
|
|
|
24,809
|
|
|
|
|
|
|
24,809
|
|
|||||||
Interest expense
|
|
|
|
|
|
|
|
|
|
62,825
|
|
|
|
|
|
|
|
|
|
62,825
|
|
|||||||
Total expenses
|
1,281,732
|
|
|
566,175
|
|
|
(7,857
|
)
|
|
453,172
|
|
|
187,788
|
|
|
3,387
|
|
|
|
2,484,397
|
|
|||||||
Subtotal
|
444,164
|
|
|
164,382
|
|
|
7,866
|
|
|
181,758
|
|
|
(186,549
|
)
|
|
(3,486
|
)
|
|
|
608,135
|
|
|||||||
Non-operating items
|
|
|
|
|
|
|
|
|
|
|
3,486
|
|
|
(3,4)
|
3,486
|
|
||||||||||||
Measure of segment profitability (pretax)
|
$
|
444,164
|
|
|
$
|
164,382
|
|
|
$
|
7,866
|
|
|
$
|
181,758
|
|
|
$
|
(186,549
|
)
|
|
$
|
—
|
|
|
|
611,621
|
|
|
Deduct applicable income taxes
|
|
|
(184,703
|
)
|
||||||||||||||||||||||||
Segment profits after tax
|
|
|
426,918
|
|
||||||||||||||||||||||||
Add back income taxes applicable to segment profitability
|
|
|
184,703
|
|
||||||||||||||||||||||||
Add (deduct) realized investment gains (losses)
|
|
|
6,142
|
|
||||||||||||||||||||||||
Add (deduct) administrative settlements
(3)
|
|
|
(2,094
|
)
|
||||||||||||||||||||||||
Add (deduct) guaranty fund assessments
(4)
|
|
|
(1,392
|
)
|
||||||||||||||||||||||||
Pretax income from continuing operations per Condensed Consolidated Statements of Operations
|
|
|
$
|
614,277
|
|
|
Nine Months Ended September 30, 2016
|
|||||||||||||||||||||||||||
|
Life
|
|
Health
|
|
Annuity
|
|
Investment
|
|
Other &
Corporate |
|
Adjustments
|
|
|
Consolidated
|
||||||||||||||
Revenue:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Premium
|
$
|
1,639,156
|
|
|
$
|
709,936
|
|
|
$
|
34
|
|
|
|
|
|
|
|
|
|
$
|
2,349,126
|
|
||||||
Net investment income
|
|
|
|
|
|
|
|
|
|
$
|
601,415
|
|
|
|
|
|
|
|
601,415
|
|
||||||||
Other income
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
1,086
|
|
|
$
|
(123
|
)
|
|
(2)
|
963
|
|
|||||
Total revenue
|
1,639,156
|
|
|
709,936
|
|
|
34
|
|
|
601,415
|
|
|
1,086
|
|
|
(123
|
)
|
|
|
2,951,504
|
|
|||||||
Expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Policy benefits
|
1,101,748
|
|
|
459,387
|
|
|
27,475
|
|
|
|
|
|
|
|
|
|
|
|
|
1,588,610
|
|
|||||||
Required interest on reserves
|
(430,931
|
)
|
|
(54,803
|
)
|
|
(38,359
|
)
|
|
524,093
|
|
|
|
|
|
|
|
|
|
—
|
|
|||||||
Required interest on DAC
|
133,628
|
|
|
17,297
|
|
|
621
|
|
|
(151,546
|
)
|
|
|
|
|
|
|
|
|
—
|
|
|||||||
Amortization of acquisition costs
|
281,698
|
|
|
67,110
|
|
|
4,064
|
|
|
|
|
|
|
|
|
|
|
|
|
352,872
|
|
|||||||
Commissions, premium taxes, and non-deferred acquisition costs
|
121,968
|
|
|
63,733
|
|
|
31
|
|
|
|
|
|
|
|
|
(123
|
)
|
|
(2)
|
185,609
|
|
|||||||
Insurance administrative expense
(1)
|
|
|
|
|
|
|
|
|
|
|
|
|
146,129
|
|
|
257
|
|
|
|
146,386
|
|
|||||||
Parent expense
|
|
|
|
|
|
|
|
|
|
|
|
|
6,360
|
|
|
|
|
|
|
6,360
|
|
|||||||
Stock compensation expense
|
|
|
|
|
|
|
|
|
|
|
|
|
20,334
|
|
|
|
|
|
|
20,334
|
|
|||||||
Interest expense
|
|
|
|
|
|
|
|
|
|
62,860
|
|
|
|
|
|
|
|
|
|
62,860
|
|
|||||||
Total expenses
|
1,208,111
|
|
|
552,724
|
|
|
(6,168
|
)
|
|
435,407
|
|
|
172,823
|
|
|
134
|
|
|
|
2,363,031
|
|
|||||||
Subtotal
|
431,045
|
|
|
157,212
|
|
|
6,202
|
|
|
166,008
|
|
|
(171,737
|
)
|
|
(257
|
)
|
|
|
588,473
|
|
|||||||
Non-operating items
|
|
|
|
|
|
|
|
|
|
|
257
|
|
|
|
257
|
|
||||||||||||
Measure of segment profitability (pretax)
|
$
|
431,045
|
|
|
$
|
157,212
|
|
|
$
|
6,202
|
|
|
$
|
166,008
|
|
|
$
|
(171,737
|
)
|
|
$
|
—
|
|
|
|
588,730
|
|
|
Deduct applicable income taxes
|
|
|
(178,842
|
)
|
||||||||||||||||||||||||
Segment profits after tax
|
|
|
409,888
|
|
||||||||||||||||||||||||
Add back income taxes applicable to segment profitability
|
|
|
178,842
|
|
||||||||||||||||||||||||
Add (deduct) realized investment gains (losses)
|
|
|
7,780
|
|
||||||||||||||||||||||||
Add (deduct) non-operating fees
|
|
|
(257
|
)
|
||||||||||||||||||||||||
Pretax income from continuing operations per Condensed Consolidated Statements of Operations
|
|
|
$
|
596,253
|
|
|
Three Months Ended
September 30, |
|
Nine Months Ended
September 30, |
||||||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Life insurance underwriting margin
|
$
|
152,731
|
|
|
$
|
143,141
|
|
|
$
|
444,164
|
|
|
$
|
431,045
|
|
Health insurance underwriting margin
|
55,749
|
|
|
53,076
|
|
|
164,382
|
|
|
157,212
|
|
||||
Annuity underwriting margin
|
2,649
|
|
|
2,630
|
|
|
7,866
|
|
|
6,202
|
|
||||
Excess investment income
|
60,936
|
|
|
56,738
|
|
|
181,758
|
|
|
166,008
|
|
||||
Other insurance:
|
|
|
|
|
|
|
|
||||||||
Other income
|
361
|
|
|
199
|
|
|
1,239
|
|
|
1,086
|
|
||||
Administrative expense
|
(52,426
|
)
|
|
(49,248
|
)
|
|
(155,751
|
)
|
|
(146,129
|
)
|
||||
Corporate and adjustments
|
(10,593
|
)
|
|
(8,300
|
)
|
|
(32,037
|
)
|
|
(26,694
|
)
|
||||
Segment profits before tax
|
209,407
|
|
|
198,236
|
|
|
611,621
|
|
|
588,730
|
|
||||
Applicable taxes
|
(63,342
|
)
|
|
(58,422
|
)
|
|
(184,703
|
)
|
|
(178,842
|
)
|
||||
Segment profits after tax
|
146,065
|
|
|
139,814
|
|
|
426,918
|
|
|
409,888
|
|
||||
Discontinued operations (after tax)
|
(12
|
)
|
|
9,959
|
|
|
(3,739
|
)
|
|
(447
|
)
|
||||
After-tax total, after discontinued operations
|
146,053
|
|
|
149,773
|
|
|
423,179
|
|
|
409,441
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Realized gains (losses)—investments (after tax)
|
8,186
|
|
|
2,263
|
|
|
6,235
|
|
|
5,057
|
|
||||
Administrative settlements (after tax)
|
—
|
|
|
—
|
|
|
(1,361
|
)
|
|
—
|
|
||||
Guaranty fund assessments (after tax)
|
(905
|
)
|
|
—
|
|
|
(905
|
)
|
|
—
|
|
||||
Non-operating fees (after tax)
|
—
|
|
|
(167
|
)
|
|
—
|
|
|
(167
|
)
|
||||
Net income
|
$
|
153,334
|
|
|
$
|
151,869
|
|
|
$
|
427,148
|
|
|
$
|
414,331
|
|
|
Nine Months Ended September 30,
|
||||||||||||||||||||
|
2017
|
|
2016
|
||||||||||||||||||
|
Shares
|
|
Amount
|
|
Average
Price |
|
Shares
|
|
Amount
|
|
Average
Price |
||||||||||
Purchases with:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Excess cash flow at the Parent Company
|
3,176
|
|
|
$
|
242,841
|
|
|
$
|
76.46
|
|
|
4,170
|
|
|
$
|
240,108
|
|
|
$
|
57.58
|
|
Option exercise proceeds
|
760
|
|
|
58,607
|
|
|
77.16
|
|
|
1,180
|
|
|
71,248
|
|
|
60.38
|
|
||||
Total
|
3,936
|
|
|
$
|
301,448
|
|
|
$
|
76.59
|
|
|
5,350
|
|
|
$
|
311,356
|
|
|
$
|
58.20
|
|
Life Insurance
Summary of Results (Dollar amounts in thousands) |
|||||||||||||||||
|
Nine Months Ended September 30,
|
|
Increase
|
||||||||||||||
|
2017
|
|
2016
|
|
(Decrease)
|
||||||||||||
|
Amount
|
|
% of
Premium |
|
Amount
|
|
% of
Premium |
|
Amount
|
|
%
|
||||||
Premium and policy charges
|
$
|
1,725,896
|
|
|
100
|
|
$
|
1,639,156
|
|
|
100
|
|
$
|
86,740
|
|
|
5
|
Net policy obligations
|
713,950
|
|
|
41
|
|
670,817
|
|
|
41
|
|
43,133
|
|
|
6
|
|||
Commissions and acquisition expense
|
567,782
|
|
|
33
|
|
537,294
|
|
|
33
|
|
30,488
|
|
|
6
|
|||
Insurance underwriting income before other income and administrative expense
|
$
|
444,164
|
|
|
26
|
|
$
|
431,045
|
|
|
26
|
|
$
|
13,119
|
|
|
3
|
|
Nine Months Ended September 30,
|
|
Increase
|
|||||||||||||||
|
2017
|
|
2016
|
|
(Decrease)
|
|||||||||||||
|
Amount
|
|
% of
Total |
|
Amount
|
|
% of
Total |
|
Amount
|
|
%
|
|||||||
American Income Exclusive Agency
|
$
|
741,392
|
|
|
43
|
|
$
|
677,702
|
|
|
41
|
|
$
|
63,690
|
|
|
9
|
|
Globe Life Direct Response
|
613,568
|
|
|
35
|
|
591,084
|
|
|
36
|
|
22,484
|
|
|
4
|
|
|||
Liberty National Exclusive Agency
|
205,775
|
|
|
12
|
|
203,040
|
|
|
13
|
|
2,735
|
|
|
1
|
|
|||
Other Agencies
|
165,161
|
|
|
10
|
|
167,330
|
|
|
10
|
|
(2,169
|
)
|
|
(1
|
)
|
|||
Total
|
$
|
1,725,896
|
|
|
100
|
|
$
|
1,639,156
|
|
|
100
|
|
$
|
86,740
|
|
|
5
|
|
Life Insurance
Net Sales
(Dollar amounts in thousands)
|
||||||||||||||||||
|
Nine Months Ended September 30,
|
|
Increase
|
|||||||||||||||
|
2017
|
|
2016
|
|
(Decrease)
|
|||||||||||||
|
Amount
|
|
% of
Total |
|
Amount
|
|
% of
Total |
|
Amount
|
|
%
|
|||||||
American Income Exclusive Agency
|
$
|
167,478
|
|
|
53
|
|
$
|
157,949
|
|
|
50
|
|
$
|
9,529
|
|
|
6
|
|
Globe Life Direct Response
|
106,652
|
|
|
34
|
|
116,224
|
|
|
37
|
|
(9,572
|
)
|
|
(8
|
)
|
|||
Liberty National Exclusive Agency
|
34,609
|
|
|
11
|
|
29,856
|
|
|
10
|
|
4,753
|
|
|
16
|
|
|||
Other Agencies
|
7,501
|
|
|
2
|
|
9,063
|
|
|
3
|
|
(1,562
|
)
|
|
(17
|
)
|
|||
Total
|
$
|
316,240
|
|
|
100
|
|
$
|
313,092
|
|
|
100
|
|
$
|
3,148
|
|
|
1
|
|
Life Insurance
First-Year Collected Premium
(Dollar amounts in thousands)
|
||||||||||||||||||
|
Nine Months Ended September 30,
|
|
Increase
|
|||||||||||||||
|
2017
|
|
2016
|
|
(Decrease)
|
|||||||||||||
|
Amount
|
|
% of
Total |
|
Amount
|
|
% of
Total |
|
Amount
|
|
%
|
|||||||
American Income Exclusive Agency
|
$
|
135,935
|
|
|
57
|
|
$
|
129,878
|
|
|
55
|
|
$
|
6,057
|
|
|
5
|
|
Globe Life Direct Response
|
70,989
|
|
|
30
|
|
75,784
|
|
|
32
|
|
(4,795
|
)
|
|
(6
|
)
|
|||
Liberty National Exclusive Agency
|
24,587
|
|
|
10
|
|
21,707
|
|
|
9
|
|
2,880
|
|
|
13
|
|
|||
Other Agencies
|
7,325
|
|
|
3
|
|
8,801
|
|
|
4
|
|
(1,476
|
)
|
|
(17
|
)
|
|||
Total
|
$
|
238,836
|
|
|
100
|
|
$
|
236,170
|
|
|
100
|
|
$
|
2,666
|
|
|
1
|
|
|
Nine Months Ended September 30,
|
|
Increase
|
||||||||||||||
|
2017
|
|
2016
|
|
(Decrease)
|
||||||||||||
|
Amount
|
|
% of
Premium |
|
Amount
|
|
% of
Premium |
|
Amount
|
|
%
|
||||||
Premium and policy charges
|
$
|
730,557
|
|
|
100
|
|
$
|
709,936
|
|
|
100
|
|
$
|
20,621
|
|
|
3
|
Net policy obligations
|
412,245
|
|
|
56
|
|
404,584
|
|
|
57
|
|
7,661
|
|
|
2
|
|||
Commissions and acquisition expense
|
153,930
|
|
|
21
|
|
148,140
|
|
|
21
|
|
5,790
|
|
|
4
|
|||
Insurance underwriting income before other income and administrative expense
|
$
|
164,382
|
|
|
23
|
|
$
|
157,212
|
|
|
22
|
|
$
|
7,170
|
|
|
5
|
|
Nine Months Ended September 30,
|
|
Increase
|
|||||||||||||||
|
2017
|
|
2016
|
|
(Decrease)
|
|||||||||||||
|
Amount
|
|
% of
Total |
|
Amount
|
|
% of
Total |
|
Amount
|
|
%
|
|||||||
United American Independent Agency
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Limited-benefit plans
|
$
|
8,686
|
|
|
|
|
$
|
9,737
|
|
|
|
|
$
|
(1,051
|
)
|
|
(11
|
)
|
Medicare Supplement
|
263,904
|
|
|
|
|
256,572
|
|
|
|
|
7,332
|
|
|
3
|
|
|||
|
272,590
|
|
|
37
|
|
266,309
|
|
|
38
|
|
6,281
|
|
|
2
|
|
|||
Family Heritage Agency
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Limited-benefit plans
|
188,350
|
|
|
|
|
175,538
|
|
|
|
|
12,812
|
|
|
7
|
|
|||
Medicare Supplement
|
—
|
|
|
|
|
—
|
|
|
|
|
—
|
|
|
—
|
|
|||
|
188,350
|
|
|
26
|
|
175,538
|
|
|
25
|
|
12,812
|
|
|
7
|
|
|||
Liberty National Exclusive Agency
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Limited-benefit plans
|
108,085
|
|
|
|
|
106,343
|
|
|
|
|
1,742
|
|
|
2
|
|
|||
Medicare Supplement
|
39,988
|
|
|
|
|
46,080
|
|
|
|
|
(6,092
|
)
|
|
(13
|
)
|
|||
|
148,073
|
|
|
20
|
|
152,423
|
|
|
21
|
|
(4,350
|
)
|
|
(3
|
)
|
|||
American Income Exclusive Agency
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Limited-benefit plans
|
66,077
|
|
|
|
|
62,477
|
|
|
|
|
3,600
|
|
|
6
|
|
|||
Medicare Supplement
|
198
|
|
|
|
|
241
|
|
|
|
|
(43
|
)
|
|
(18
|
)
|
|||
|
66,275
|
|
|
9
|
|
62,718
|
|
|
9
|
|
3,557
|
|
|
6
|
|
|||
Direct Response
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Limited-benefit plans
|
425
|
|
|
|
|
407
|
|
|
|
|
18
|
|
|
4
|
|
|||
Medicare Supplement
|
54,844
|
|
|
|
|
52,541
|
|
|
|
|
2,303
|
|
|
4
|
|
|||
|
55,269
|
|
|
8
|
|
52,948
|
|
|
7
|
|
2,321
|
|
|
4
|
|
|||
Total Health Premium
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Limited-benefit plans
|
371,623
|
|
|
51
|
|
354,502
|
|
|
50
|
|
17,121
|
|
|
5
|
|
|||
Medicare Supplement
|
358,934
|
|
|
49
|
|
355,434
|
|
|
50
|
|
3,500
|
|
|
1
|
|
|||
Total
|
$
|
730,557
|
|
|
100
|
|
$
|
709,936
|
|
|
100
|
|
$
|
20,621
|
|
|
3
|
|
|
Nine Months Ended September 30,
|
|
Increase
|
|||||||||||||||
|
2017
|
|
2016
|
|
(Decrease)
|
|||||||||||||
|
Amount
|
|
% of
Total |
|
Amount
|
|
% of
Total |
|
Amount
|
|
%
|
|||||||
United American Independent Agency
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Limited-benefit plans
|
$
|
388
|
|
|
|
|
$
|
428
|
|
|
|
|
$
|
(40
|
)
|
|
(9
|
)
|
Medicare Supplement
|
33,052
|
|
|
|
|
31,799
|
|
|
|
|
1,253
|
|
|
4
|
|
|||
|
33,440
|
|
|
32
|
|
32,227
|
|
|
33
|
|
1,213
|
|
|
4
|
|
|||
Family Heritage Agency
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Limited-benefit plans
|
41,755
|
|
|
|
|
38,144
|
|
|
|
|
3,611
|
|
|
9
|
|
|||
Medicare Supplement
|
—
|
|
|
|
|
—
|
|
|
|
|
—
|
|
|
—
|
|
|||
|
41,755
|
|
|
40
|
|
38,144
|
|
|
39
|
|
3,611
|
|
|
9
|
|
|||
Liberty National Exclusive Agency
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Limited-benefit plans
|
14,558
|
|
|
|
|
14,665
|
|
|
|
|
(107
|
)
|
|
(1
|
)
|
|||
Medicare Supplement
|
—
|
|
|
|
|
8
|
|
|
|
|
(8
|
)
|
|
(100
|
)
|
|||
|
14,558
|
|
|
14
|
|
14,673
|
|
|
15
|
|
(115
|
)
|
|
(1
|
)
|
|||
American Income Exclusive Agency
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Limited-benefit plans
|
10,369
|
|
|
|
|
9,463
|
|
|
|
|
906
|
|
|
10
|
|
|||
Medicare Supplement
|
—
|
|
|
|
|
—
|
|
|
|
|
—
|
|
|
—
|
|
|||
|
10,369
|
|
|
10
|
|
9,463
|
|
|
9
|
|
906
|
|
|
10
|
|
|||
Direct Response
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Limited-benefit plans
|
—
|
|
|
|
|
—
|
|
|
|
|
—
|
|
|
—
|
|
|||
Medicare Supplement
|
3,790
|
|
|
|
|
3,607
|
|
|
|
|
183
|
|
|
5
|
|
|||
|
3,790
|
|
|
4
|
|
3,607
|
|
|
4
|
|
183
|
|
|
5
|
|
|||
Total Net Sales
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Limited-benefit plans
|
67,070
|
|
|
65
|
|
62,700
|
|
|
64
|
|
4,370
|
|
|
7
|
|
|||
Medicare Supplement
|
36,842
|
|
|
35
|
|
35,414
|
|
|
36
|
|
1,428
|
|
|
4
|
|
|||
Total
|
$
|
103,912
|
|
|
100
|
|
$
|
98,114
|
|
|
100
|
|
$
|
5,798
|
|
|
6
|
|
|
Nine Months Ended September 30,
|
|
Increase
|
|||||||||||||||||
|
2017
|
|
2016
|
|
(Decrease)
|
|||||||||||||||
|
Amount
|
|
% of
Total |
|
Amount
|
|
% of
Total |
|
Amount
|
|
%
|
|||||||||
United American Independent Agency
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Limited-benefit plans
|
$
|
344
|
|
|
|
|
$
|
433
|
|
|
|
|
$
|
(89
|
)
|
|
(21
|
)
|
||
Medicare Supplement
|
39,306
|
|
|
|
|
47,653
|
|
|
|
|
(8,347
|
)
|
|
(18
|
)
|
|||||
|
39,650
|
|
|
40
|
|
|
48,086
|
|
|
46
|
|
|
(8,436
|
)
|
|
(18
|
)
|
|||
Family Heritage Agency
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Limited-benefit plans
|
33,116
|
|
|
|
|
30,311
|
|
|
|
|
2,805
|
|
|
9
|
|
|||||
Medicare Supplement
|
—
|
|
|
|
|
—
|
|
|
|
|
—
|
|
|
—
|
|
|||||
|
33,116
|
|
|
33
|
|
|
30,311
|
|
|
29
|
|
|
2,805
|
|
|
9
|
|
|||
Liberty National Exclusive Agency
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Limited-benefit plans
|
12,256
|
|
|
|
|
11,946
|
|
|
|
|
310
|
|
|
3
|
|
|||||
Medicare Supplement
|
2
|
|
|
|
|
2
|
|
|
|
|
—
|
|
|
—
|
|
|||||
|
12,258
|
|
|
12
|
|
|
11,948
|
|
|
12
|
|
|
310
|
|
|
3
|
|
|||
American Income Exclusive Agency
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Limited-benefit plans
|
10,840
|
|
|
|
|
10,188
|
|
|
|
|
652
|
|
|
6
|
|
|||||
Medicare Supplement
|
—
|
|
|
|
|
—
|
|
|
|
|
—
|
|
|
—
|
|
|||||
|
10,840
|
|
|
11
|
|
|
10,188
|
|
|
10
|
|
|
652
|
|
|
6
|
|
|||
Direct Response
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Limited-benefit plans
|
—
|
|
|
|
|
—
|
|
|
|
|
—
|
|
|
—
|
|
|||||
Medicare Supplement
|
4,108
|
|
|
|
|
3,161
|
|
|
|
|
947
|
|
|
30
|
|
|||||
|
4,108
|
|
|
4
|
|
|
3,161
|
|
|
3
|
|
|
947
|
|
|
30
|
|
|||
Total First-Year Collected Premium
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Limited-benefit plans
|
56,556
|
|
|
57
|
|
|
52,878
|
|
|
51
|
|
|
3,678
|
|
|
7
|
|
|||
Medicare Supplement
|
43,416
|
|
|
43
|
|
|
50,816
|
|
|
49
|
|
|
(7,400
|
)
|
|
(15
|
)
|
|||
Total
|
$
|
99,972
|
|
|
100
|
|
|
$
|
103,694
|
|
|
100
|
|
|
$
|
(3,722
|
)
|
|
(4
|
)
|
|
Nine Months Ended September 30,
|
||||||||||
|
2017
|
|
2016
|
||||||||
|
Amount
|
|
% of
Premium |
|
Amount
|
|
% of
Premium |
||||
Insurance administrative expenses:
|
|
|
|
|
|
|
|
||||
Salaries
|
$
|
70,505
|
|
|
2.9
|
|
$
|
67,683
|
|
|
2.9
|
Other employee costs
|
25,320
|
|
|
1.0
|
|
21,834
|
|
|
0.9
|
||
Information technology costs
|
19,325
|
|
|
0.8
|
|
17,712
|
|
|
0.7
|
||
Legal costs
|
6,520
|
|
|
0.2
|
|
6,352
|
|
|
0.3
|
||
Other administrative costs
|
34,081
|
|
|
1.4
|
|
32,548
|
|
|
1.4
|
||
Total insurance administrative expenses
|
155,751
|
|
|
6.3
|
|
146,129
|
|
|
6.2
|
||
|
|
|
|
|
|
|
|
||||
Parent company expense
|
7,228
|
|
|
|
|
6,360
|
|
|
|
||
Stock compensation expense
|
24,809
|
|
|
|
|
20,334
|
|
|
|
||
Non-operating fees
|
—
|
|
|
|
|
257
|
|
|
|
||
Total operating expenses, per
Condensed Consolidated Statements of Operations
|
$
|
187,788
|
|
|
|
|
$
|
173,080
|
|
|
|
|
|
|
|
|
|
|
|
||||
Insurance administrative expenses:
|
|
|
|
|
|
|
|
||||
Increase (decrease) over prior year
|
6.6
|
%
|
|
|
|
5.4
|
%
|
|
|
||
Total operating expenses:
|
|
|
|
|
|
|
|
||||
Increase (decrease) over prior year
|
8.5
|
%
|
|
|
|
3.6
|
%
|
|
|
|
Nine Months Ended
September 30, |
|
Increase
(Decrease) |
|||||||||||
|
2017
|
|
2016
|
|
Amount
|
|
%
|
|||||||
Net investment income
|
$
|
634,930
|
|
|
$
|
601,415
|
|
|
$
|
33,515
|
|
|
6
|
|
Interest on net insurance policy liabilities:
|
|
|
|
|
|
|
|
|||||||
Interest on reserves
|
(547,443
|
)
|
|
(524,093
|
)
|
|
(23,350
|
)
|
|
4
|
|
|||
Interest on deferred acquisition costs
|
157,096
|
|
|
151,546
|
|
|
5,550
|
|
|
4
|
|
|||
Net required interest
|
(390,347
|
)
|
|
(372,547
|
)
|
|
(17,800
|
)
|
|
5
|
|
|||
Financing costs
|
(62,825
|
)
|
|
(62,860
|
)
|
|
35
|
|
|
—
|
|
|||
Excess investment income
|
$
|
181,758
|
|
|
$
|
166,008
|
|
|
$
|
15,750
|
|
|
9
|
|
|
|
|
|
|
|
|
|
|||||||
Excess investment income per diluted share
|
$
|
1.52
|
|
|
$
|
1.35
|
|
|
$
|
0.17
|
|
|
13
|
|
|
|
|
|
|
|
|
|
|||||||
Average invested assets (at amortized cost)
|
$
|
15,275,412
|
|
|
$
|
14,339,950
|
|
|
$
|
935,462
|
|
|
7
|
|
Average net insurance policy liabilities
(1)
|
9,306,010
|
|
|
8,896,284
|
|
|
409,726
|
|
|
5
|
|
|||
Average debt and preferred securities (at amortized cost)
|
1,471,616
|
|
|
1,361,234
|
|
|
110,382
|
|
|
8
|
|
|
Nine Months Ended
September 30, |
|
Increase
(Decrease) |
|||||||||||
|
2017
|
|
2016
|
|
Amount
|
|
%
|
|||||||
Interest on funded debt
|
$
|
55,089
|
|
|
$
|
57,647
|
|
|
$
|
(2,558
|
)
|
|
(4
|
)
|
Interest on term loan
|
1,706
|
|
|
536
|
|
|
1,170
|
|
|
*
|
|
|||
Interest on short term debt
|
6,026
|
|
|
4,674
|
|
|
1,352
|
|
|
29
|
|
|||
Other
|
4
|
|
|
3
|
|
|
1
|
|
|
33
|
|
|||
Financing costs
|
$
|
62,825
|
|
|
$
|
62,860
|
|
|
$
|
(35
|
)
|
|
—
|
|
|
Nine Months Ended
September 30, |
||||||
|
2017
|
|
2016
|
||||
Cost of acquisitions
(1)
:
|
|
|
|
||||
Corporate securities
|
$
|
1,046,773
|
|
|
$
|
910,085
|
|
Other
|
5,932
|
|
|
15,737
|
|
||
Total fixed maturity acquisitions
|
$
|
1,052,705
|
|
|
$
|
925,822
|
|
|
|
|
|
||||
Effective annual yield
(2)
|
4.74
|
%
|
|
4.73
|
%
|
||
Average life (in years, to next call)
|
22.8
|
|
|
24.1
|
|
||
Average life (in years, to maturity)
|
23.7
|
|
|
24.8
|
|
||
Average rating
|
BBB+
|
|
|
BBB+
|
|
|
Amount
|
|
% of
Total |
||
Fixed maturities (at amortized cost)
|
$
|
14,914,580
|
|
|
96
|
Policy loans
|
523,318
|
|
|
3
|
|
Other long-term investments
(1)
|
69,592
|
|
|
1
|
|
Short-term investments
|
65,482
|
|
|
—
|
|
Total
|
$
|
15,572,972
|
|
|
100
|
|
Below Investment Grade
|
|
Total Fixed Maturities
|
|
% of Total Fixed Maturities
|
||||||||||||||||||||||||
|
Cost or
Amortized Cost |
Gross
Unrealized Gains |
Gross
Unrealized Losses |
Fair
Value |
|
Cost or
Amortized Cost |
Gross
Unrealized Gains |
Gross
Unrealized Losses |
Fair
Value |
|
At Amortized Cost
|
At Fair Value
|
|||||||||||||||||
Corporates:
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Financial
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Insurance - life, health, P&C
|
$
|
58,294
|
|
$
|
2,842
|
|
$
|
(3,381
|
)
|
$
|
57,755
|
|
|
$
|
2,003,179
|
|
$
|
319,173
|
|
$
|
(4,544
|
)
|
$
|
2,317,808
|
|
|
13
|
14
|
|
Banks
|
31,035
|
|
624
|
|
(3,030
|
)
|
28,629
|
|
|
739,517
|
|
107,348
|
|
(3,191
|
)
|
843,674
|
|
|
5
|
5
|
|||||||||
Other financial
|
74,955
|
|
—
|
|
(19,204
|
)
|
55,751
|
|
|
793,595
|
|
59,983
|
|
(21,175
|
)
|
832,403
|
|
|
5
|
5
|
|||||||||
Total financial
|
164,284
|
|
3,466
|
|
(25,615
|
)
|
142,135
|
|
|
3,536,291
|
|
486,504
|
|
(28,910
|
)
|
3,993,885
|
|
|
23
|
24
|
|||||||||
Utilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Electric
|
20,713
|
|
1,239
|
|
—
|
|
21,952
|
|
|
1,469,534
|
|
275,245
|
|
(2,332
|
)
|
1,742,447
|
|
|
10
|
11
|
|||||||||
Gas and water
|
—
|
|
—
|
|
—
|
|
—
|
|
|
507,550
|
|
51,148
|
|
(439
|
)
|
558,259
|
|
|
3
|
3
|
|||||||||
Total utilities
|
20,713
|
|
1,239
|
|
—
|
|
21,952
|
|
|
1,977,084
|
|
326,393
|
|
(2,771
|
)
|
2,300,706
|
|
|
13
|
14
|
|||||||||
Industrial - Energy
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Pipelines
|
40,598
|
|
531
|
|
(2,250
|
)
|
38,879
|
|
|
865,245
|
|
100,340
|
|
(5,289
|
)
|
960,296
|
|
|
6
|
6
|
|||||||||
Exploration and production
|
28,918
|
|
777
|
|
—
|
|
29,695
|
|
|
531,485
|
|
61,007
|
|
(4,023
|
)
|
588,469
|
|
|
4
|
4
|
|||||||||
Oil field services
|
33,871
|
|
—
|
|
(4,568
|
)
|
29,303
|
|
|
83,730
|
|
9,127
|
|
(4,568
|
)
|
88,289
|
|
|
1
|
1
|
|||||||||
Refiner
|
—
|
|
—
|
|
—
|
|
—
|
|
|
67,012
|
|
14,611
|
|
(5
|
)
|
81,618
|
|
|
—
|
—
|
|||||||||
Driller
|
54,582
|
|
211
|
|
(14,185
|
)
|
40,608
|
|
|
54,582
|
|
211
|
|
(14,185
|
)
|
40,608
|
|
|
—
|
—
|
|||||||||
Total energy
|
157,969
|
|
1,519
|
|
(21,003
|
)
|
138,485
|
|
|
1,602,054
|
|
185,296
|
|
(28,070
|
)
|
1,759,280
|
|
|
11
|
11
|
|||||||||
Industrial - Basic materials
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Chemicals
|
—
|
|
—
|
|
—
|
|
—
|
|
|
541,902
|
|
45,379
|
|
(497
|
)
|
586,784
|
|
|
4
|
4
|
|||||||||
Metals and mining
|
68,073
|
|
7,831
|
|
—
|
|
75,904
|
|
|
390,213
|
|
74,145
|
|
—
|
|
464,358
|
|
|
3
|
3
|
|||||||||
Forestry products and paper
|
—
|
|
—
|
|
—
|
|
—
|
|
|
112,311
|
|
15,338
|
|
—
|
|
127,649
|
|
|
1
|
1
|
|||||||||
Total basic materials
|
68,073
|
|
7,831
|
|
—
|
|
75,904
|
|
|
1,044,426
|
|
134,862
|
|
(497
|
)
|
1,178,791
|
|
|
8
|
8
|
|||||||||
Industrial - Consumer, non-cyclical
|
—
|
|
—
|
|
—
|
|
—
|
|
|
1,770,933
|
|
168,731
|
|
(7,462
|
)
|
1,932,202
|
|
|
11
|
11
|
|||||||||
Other industrials
|
47,204
|
|
2,792
|
|
(29
|
)
|
49,967
|
|
|
1,357,486
|
|
164,785
|
|
(2,430
|
)
|
1,519,841
|
|
|
9
|
9
|
|||||||||
Industrial -
Transportation |
26,572
|
|
387
|
|
(246
|
)
|
26,713
|
|
|
551,533
|
|
77,257
|
|
(614
|
)
|
628,176
|
|
|
4
|
4
|
|||||||||
Other corporate sectors
|
116,459
|
|
4,920
|
|
(5,094
|
)
|
116,285
|
|
|
1,300,884
|
|
120,485
|
|
(11,667
|
)
|
1,409,702
|
|
|
9
|
8
|
|||||||||
Total corporates
|
601,274
|
|
22,154
|
|
(51,987
|
)
|
571,441
|
|
|
13,140,691
|
|
1,664,313
|
|
(82,421
|
)
|
14,722,583
|
|
|
88
|
89
|
|||||||||
Other fixed maturities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Government (U.S., municipal, and foreign)
|
306
|
|
—
|
|
(36
|
)
|
270
|
|
|
1,568,390
|
|
142,000
|
|
(1,205
|
)
|
1,709,185
|
|
|
11
|
10
|
|||||||||
Collateralized debt obligations
|
59,204
|
|
19,558
|
|
(8,994
|
)
|
69,768
|
|
|
59,204
|
|
19,558
|
|
(8,994
|
)
|
69,768
|
|
|
—
|
—
|
|||||||||
Other asset-backed securities
|
—
|
|
—
|
|
—
|
|
—
|
|
|
144,701
|
|
4,967
|
|
(17
|
)
|
149,651
|
|
|
1
|
1
|
|||||||||
Mortgage-backed securities
(1)
|
—
|
|
—
|
|
—
|
|
—
|
|
|
1,594
|
|
133
|
|
(1
|
)
|
1,726
|
|
|
—
|
—
|
|||||||||
Total fixed maturities
|
$
|
660,784
|
|
$
|
41,712
|
|
$
|
(61,017
|
)
|
$
|
641,479
|
|
|
$
|
14,914,580
|
|
$
|
1,830,971
|
|
$
|
(92,638
|
)
|
$
|
16,652,913
|
|
|
100
|
100
|
|
September 30, 2017
|
||||||||||
|
Amortized
Cost |
|
%
|
|
Fair
Value |
|
%
|
||||
Investment grade:
|
|
|
|
|
|
|
|
||||
AAA
|
$
|
647,007
|
|
|
4
|
|
$
|
681,920
|
|
|
4
|
AA
|
1,261,049
|
|
|
9
|
|
1,418,391
|
|
|
9
|
||
A
|
4,023,931
|
|
|
27
|
|
4,727,798
|
|
|
28
|
||
BBB+
|
3,493,852
|
|
|
23
|
|
3,886,434
|
|
|
23
|
||
BBB
|
3,201,975
|
|
|
22
|
|
3,531,015
|
|
|
21
|
||
BBB-
|
1,625,982
|
|
|
11
|
|
1,765,876
|
|
|
11
|
||
Investment grade
|
14,253,796
|
|
|
96
|
|
16,011,434
|
|
|
96
|
||
Below investment grade:
|
|
|
|
|
|
|
|
||||
BB
|
362,855
|
|
|
2
|
|
351,691
|
|
|
2
|
||
B
|
161,422
|
|
|
1
|
|
140,346
|
|
|
1
|
||
Below B
|
136,507
|
|
|
1
|
|
149,442
|
|
|
1
|
||
Below investment grade
|
660,784
|
|
|
4
|
|
641,479
|
|
|
4
|
||
|
$
|
14,914,580
|
|
|
100
|
|
$
|
16,652,913
|
|
|
100
|
Balance as of December 31, 2016
|
$
|
751,144
|
|
Downgrades by rating agencies
|
—
|
|
|
Upgrades by rating agencies
|
(76,659
|
)
|
|
Disposals
|
(16,422
|
)
|
|
Amortization and other
|
2,721
|
|
|
Balance as of September 30, 2017
|
$
|
660,784
|
|
|
September 30,
2017 |
|
December 31, 2016
|
|
September 30,
2016 |
Average annual effective yield
(1)
|
5.63%
|
|
5.74%
|
|
5.76%
|
Average life, in years, to:
|
|
|
|
|
|
Next call
(2)
|
17.4
|
|
17.6
|
|
17.6
|
Maturity
(2)
|
19.2
|
|
19.8
|
|
19.9
|
Effective duration to:
|
|
|
|
|
|
Next call
(2)(3)
|
10.7
|
|
10.4
|
|
10.8
|
Maturity
(2)(3)
|
11.4
|
|
11.3
|
|
11.6
|
|
Nine Months Ended September 30,
|
||||||||||||||
|
2017
|
|
2016
|
||||||||||||
|
Amount
|
|
Per Share
|
|
Amount
|
|
Per Share
|
||||||||
Fixed maturities:
|
|
|
|
|
|
|
|
||||||||
Investment sales
|
$
|
3,153
|
|
|
$
|
0.02
|
|
|
$
|
3,847
|
|
|
$
|
0.03
|
|
Investments called or tendered
|
5,628
|
|
|
0.05
|
|
|
995
|
|
|
0.01
|
|
||||
Investment writedowns
(1)
|
(159
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Other investments
|
(2,387
|
)
|
|
(0.02
|
)
|
|
215
|
|
|
—
|
|
||||
Total
|
$
|
6,235
|
|
|
$
|
0.05
|
|
|
$
|
5,057
|
|
|
$
|
0.04
|
|
|
|
At
|
||||||||||
|
|
September 30,
2017 |
|
December 31, 2016
|
|
September 30,
2016 |
||||||
Balance of commercial paper at end of period (par value)
|
|
$
|
305,800
|
|
|
$
|
262,850
|
|
|
$
|
266,000
|
|
Annualized interest rate
|
|
1.44
|
%
|
|
0.96
|
%
|
|
0.85
|
%
|
|||
Letters of credit outstanding
|
|
$
|
177,000
|
|
|
$
|
177,000
|
|
|
$
|
177,000
|
|
Remaining amount available under credit line
|
|
267,200
|
|
|
310,150
|
|
|
307,000
|
|
|
|
Nine Months Ended
September 30, |
||||||
|
|
2017
|
|
2016
|
||||
Average balance of commercial paper outstanding during period (par value)
|
|
$
|
336,664
|
|
|
$
|
297,065
|
|
Daily-weighted average interest rate (annualized)
|
|
1.24
|
%
|
|
0.81
|
%
|
||
Maximum daily amount outstanding during period (par value)
|
|
$
|
455,912
|
|
|
$
|
412,676
|
|
Instrument
|
Year
Due |
|
Interest
Rate |
|
|
Par
Value |
|
Book
Value |
|
Fair
Value |
||||||
Notes
|
2023
|
|
7.875%
|
|
|
$
|
165,612
|
|
|
$
|
164,236
|
|
|
$
|
198,786
|
|
Senior Notes
|
2019
|
|
9.250%
|
|
|
292,647
|
|
|
291,767
|
|
|
327,057
|
|
|||
Senior Notes
(1)
|
2022
|
|
3.800%
|
|
|
150,000
|
|
|
148,404
|
|
|
154,449
|
|
|||
Junior Subordinated Debentures
|
2052
|
|
5.875%
|
|
|
125,000
|
|
|
120,954
|
|
|
126,700
|
|
|||
Junior Subordinated Debentures
|
2036
|
|
4.620%
|
(2)
|
|
20,000
|
|
|
20,000
|
|
|
20,000
|
|
|||
Junior Subordinated Debentures
|
2056
|
|
6.125%
|
|
|
300,000
|
|
|
290,445
|
|
|
321,240
|
|
|||
Term loan
(3)
|
2021
|
|
2.489%
|
(4)
|
|
98,750
|
|
|
98,750
|
|
|
98,750
|
|
|||
|
|
|
|
|
|
1,152,009
|
|
|
1,134,556
|
|
|
1,246,982
|
|
|||
Less current maturity of term loan
(3)
|
|
|
|
|
|
3,750
|
|
|
3,750
|
|
|
3,750
|
|
|||
Total long-term debt
|
|
|
|
|
|
1,148,259
|
|
|
1,130,806
|
|
|
1,243,232
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
||||||
Current maturity of term loan
(3)
|
|
|
|
|
|
3,750
|
|
|
3,750
|
|
|
3,750
|
|
|||
Commercial paper
|
|
|
|
|
|
305,800
|
|
|
305,252
|
|
|
305,252
|
|
|||
Total short term debt
|
|
|
|
|
|
309,550
|
|
|
309,002
|
|
|
309,002
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
||||||
Total debt
|
|
|
|
|
|
$
|
1,457,809
|
|
|
$
|
1,439,808
|
|
|
$
|
1,552,234
|
|
|
At
|
||||||||||||||||||||||
|
September 30, 2017
|
|
December 31, 2016
|
|
September 30, 2016
|
||||||||||||||||||
|
GAAP
|
|
Effect of
Accounting Rule Requiring Revaluation (1) |
|
GAAP
|
|
Effect of
Accounting Rule Requiring Revaluation (1) |
|
GAAP
|
|
Effect of
Accounting Rule Requiring Revaluation (1) |
||||||||||||
Fixed maturities
|
$
|
16,652,913
|
|
|
$
|
1,738,333
|
|
|
$
|
15,245,861
|
|
|
$
|
1,057,811
|
|
|
$
|
15,837,700
|
|
|
$
|
1,893,233
|
|
Deferred acquisition costs
(2)
|
3,911,800
|
|
|
(11,273
|
)
|
|
3,783,158
|
|
|
(10,281
|
)
|
|
3,739,526
|
|
|
(12,698
|
)
|
||||||
Total assets
|
22,993,607
|
|
|
1,727,060
|
|
|
21,436,087
|
|
|
1,047,530
|
|
|
22,077,031
|
|
|
1,880,535
|
|
||||||
Short-term debt
|
309,002
|
|
|
—
|
|
|
264,475
|
|
|
—
|
|
|
266,892
|
|
|
—
|
|
||||||
Long-term debt
|
1,130,806
|
|
|
—
|
|
|
1,133,165
|
|
|
—
|
|
|
1,133,544
|
|
|
—
|
|
||||||
Shareholders' equity
|
5,167,685
|
|
|
1,122,589
|
|
|
4,566,861
|
|
|
680,894
|
|
|
5,086,383
|
|
|
1,222,348
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Book value per diluted share
|
43.78
|
|
|
9.51
|
|
|
37.76
|
|
|
5.63
|
|
|
41.94
|
|
|
10.08
|
|
||||||
Debt to capitalization
(3)
|
21.8
|
%
|
|
(4.5
|
)%
|
|
23.4
|
%
|
|
(3.1
|
)%
|
|
21.6
|
%
|
|
(5.0
|
)%
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Diluted shares outstanding
|
118,028
|
|
|
|
|
120,958
|
|
|
|
|
121,271
|
|
|
|
|||||||||
Actual shares outstanding
|
115,359
|
|
|
|
|
118,031
|
|
|
|
|
118,895
|
|
|
|
1)
|
Economic and other conditions leading to unexpected changes in lapse rates and/or sales of our policies, as well as levels of mortality, morbidity, and utilization of health care services that differ from Torchmark’s assumptions;
|
2)
|
Regulatory developments, including changes in governmental regulations (particularly those impacting taxes and changes to the Federal Medicare program that would affect Medicare Supplement);
|
3)
|
Market trends in the senior-aged health care industry that provide alternatives to traditional Medicare (such as Health Maintenance Organizations and other managed care or private plans) and that could affect the sales of traditional Medicare Supplement insurance;
|
4)
|
Interest rate changes that affect product sales and/or investment portfolio yield;
|
5)
|
General economic, industry sector or individual debt issuers’ financial conditions that may affect the current market value of securities we own, or that may impair an issuer’s ability to make principal and/or interest payments due on those securities;
|
6)
|
Changes in pricing competition;
|
7)
|
Litigation results;
|
8)
|
Levels of administrative and operational efficiencies that differ from our assumptions;
|
9)
|
The ability to obtain timely and appropriate premium rate increases for health insurance policies from our regulators;
|
10)
|
The customer response to new products and marketing initiatives;
|
11)
|
Reported amounts in the financial statements which are based on management’s estimates and judgments which may differ from the actual amounts ultimately realized; and
|
12)
|
Compromise by a malicious actor or other event that causes a loss of secure data from, or inaccessibility to, our computer and other information technology systems.
|
Period
|
|
(a) Total Number
of Shares
Purchased
|
|
(b) Average
Price Paid
Per Share
|
|
(c) Total Number of
Shares Purchased as Part
of Publicly Announced
Plans or Programs
|
|
(d) Maximum Number
of Shares (or
Approximate Dollar
Amount) that May
Yet Be Purchased
Under the Plans or
Programs
|
||||
July 1-31, 2017
|
|
148,621
|
|
|
$
|
78.04
|
|
|
148,621
|
|
|
|
August 1-31, 2017
|
|
775,262
|
|
|
77.79
|
|
|
775,262
|
|
|
|
|
September 1-30, 2017
|
|
337,147
|
|
|
76.48
|
|
|
337,147
|
|
|
|
(a)
|
Exhibits
|
(31.1)
|
|
|
(31.2)
|
|
|
(31.3)
|
|
|
(32.1)
|
|
|
(101)
|
|
Interactive Data Files for the Torchmark Corporation Form 10-Q for the period ended September 30, 2017
|
|
|
|
TORCHMARK CORPORATION
|
|
|
|
|
Date: November 7, 2017
|
|
|
/s/ Gary L. Coleman
|
|
|
|
Gary L. Coleman
|
|
|
|
Co-Chairman and Chief Executive Officer
|
|
|
|
|
Date: November 7, 2017
|
|
|
/s/ Larry M. Hutchison
|
|
|
|
Larry M. Hutchison
|
|
|
|
Co-Chairman and Chief Executive Officer
|
|
|
|
|
Date: November 7, 2017
|
|
|
/s/ Frank M. Svoboda
|
|
|
|
Frank M. Svoboda
|
|
|
|
Executive Vice President and Chief Financial Officer
|
No information found
* THE VALUE IS THE MARKET VALUE AS OF THE LAST DAY OF THE QUARTER FOR WHICH THE 13F WAS FILED.
FUND | NUMBER OF SHARES | VALUE ($) | PUT OR CALL |
---|
DIRECTORS | AGE | BIO | OTHER DIRECTOR MEMBERSHIPS |
---|
No information found
No Customers Found
Price
Yield
Owner | Position | Direct Shares | Indirect Shares |
---|