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(Mark One)
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x
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
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OF THE SECURITIES EXCHANGE ACT OF 1934
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For the quarterly period ended June 30, 2017
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OR
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¨
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
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OF THE SECURITIES EXCHANGE ACT OF 1934
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Commission File Number 1-11848
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MISSOURI
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43-1627032
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(State or other jurisdiction
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(IRS employer
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of incorporation or organization)
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identification number)
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Item
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Page
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PART I – FINANCIAL INFORMATION
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1
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2
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3
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4
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PART II – OTHER INFORMATION
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1
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1A
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2
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6
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June 30,
2017 |
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December 31,
2016 |
||||
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(Dollars in thousands, except share data)
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||||||
Assets
|
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|
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||||
Fixed maturity securities:
|
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|
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||||
Available-for-sale at fair value (amortized cost of $33,738,334 and $30,211,787)
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$
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36,345,426
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$
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32,093,625
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Mortgage loans on real estate (net of allowances of $8,156 and $7,685)
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4,104,487
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3,775,522
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Policy loans
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1,406,774
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1,427,602
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Funds withheld at interest
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5,968,856
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5,875,919
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|
||
Short-term investments
|
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123,308
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76,710
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Other invested assets
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1,498,370
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1,591,940
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Total investments
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49,447,221
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44,841,318
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Cash and cash equivalents
|
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1,123,350
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|
1,200,718
|
|
||
Accrued investment income
|
|
388,008
|
|
|
347,173
|
|
||
Premiums receivable and other reinsurance balances
|
|
2,205,631
|
|
|
1,930,755
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|
||
Reinsurance ceded receivables
|
|
798,365
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|
|
683,972
|
|
||
Deferred policy acquisition costs
|
|
3,334,094
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3,338,605
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Other assets
|
|
841,403
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|
|
755,338
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Total assets
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$
|
58,138,072
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$
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53,097,879
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Liabilities and Stockholders’ Equity
|
|
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||||
Future policy benefits
|
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$
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20,665,256
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$
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19,581,573
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Interest-sensitive contract liabilities
|
|
16,440,873
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|
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14,029,354
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|
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Other policy claims and benefits
|
|
4,809,780
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|
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4,263,026
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|
||
Other reinsurance balances
|
|
399,517
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|
|
388,989
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|
||
Deferred income taxes
|
|
3,162,666
|
|
|
2,770,640
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|
||
Other liabilities
|
|
1,077,223
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|
|
1,041,880
|
|
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Long-term debt
|
|
2,788,494
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|
|
3,088,635
|
|
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Collateral finance and securitization notes
|
|
823,108
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|
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840,700
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Total liabilities
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|
50,166,917
|
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|
46,004,797
|
|
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Commitments and contingent liabilities (See Note 8)
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Stockholders’ Equity:
|
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|
||||
Preferred stock - par value $.01 per share, 10,000,000 shares authorized, no shares issued or outstanding
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—
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—
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Common stock - par value $.01 per share, 140,000,000 shares authorized, 79,137,758 shares issued at June 30, 2017 and December 31, 2016
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791
|
|
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791
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|
||
Additional paid-in capital
|
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1,860,001
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|
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1,848,611
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Retained earnings
|
|
5,523,622
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|
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5,199,130
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Treasury stock, at cost - 14,645,901 and 14,835,256 shares
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(1,085,157
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)
|
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(1,094,779
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)
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Accumulated other comprehensive income
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|
1,671,898
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1,139,329
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|
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Total stockholders’ equity
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7,971,155
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|
|
7,093,082
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|
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Total liabilities and stockholders’ equity
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$
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58,138,072
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|
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$
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53,097,879
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Three months ended June 30,
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Six months ended June 30,
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||||||||||||
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2017
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2016
|
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2017
|
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2016
|
||||||||
Revenues:
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(Dollars in thousands, except per share data)
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||||||||||||||
Net premiums
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$
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2,480,451
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$
|
2,346,945
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$
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4,846,147
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$
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4,503,950
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Investment income, net of related expenses
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|
518,538
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|
507,666
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1,032,902
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|
924,932
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|
||||
Investment related gains (losses), net:
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|
|
|
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|
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||||||||
Other-than-temporary impairments on fixed maturity securities
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(3,401
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)
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(846
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)
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(20,590
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)
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(34,663
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)
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Other investment related gains (losses), net
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59,696
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119,110
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137,408
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32,041
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||||
Total investment related gains (losses), net
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56,295
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|
118,264
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|
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116,818
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(2,622
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)
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||||
Other revenues
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|
73,992
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|
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66,193
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142,149
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125,376
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|
||||
Total revenues
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|
3,129,276
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|
3,039,068
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6,138,016
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5,551,636
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Benefits and Expenses:
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|
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||||||||
Claims and other policy benefits
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2,164,363
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1,997,502
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4,270,508
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3,884,266
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|
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Interest credited
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|
115,285
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|
|
95,849
|
|
|
222,969
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|
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183,754
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|
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Policy acquisition costs and other insurance expenses
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|
319,832
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405,681
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699,221
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|
|
639,444
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|
||||
Other operating expenses
|
|
154,356
|
|
|
159,895
|
|
|
312,862
|
|
|
317,319
|
|
||||
Interest expense
|
|
29,352
|
|
|
20,331
|
|
|
71,754
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|
|
53,138
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|
||||
Collateral finance and securitization expense
|
|
6,773
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|
|
6,587
|
|
|
13,543
|
|
|
12,912
|
|
||||
Total benefits and expenses
|
|
2,789,961
|
|
|
2,685,845
|
|
|
5,590,857
|
|
|
5,090,833
|
|
||||
Income before income taxes
|
|
339,315
|
|
|
353,223
|
|
|
547,159
|
|
|
460,803
|
|
||||
Provision for income taxes
|
|
107,125
|
|
|
117,120
|
|
|
169,457
|
|
|
148,228
|
|
||||
Net income
|
|
$
|
232,190
|
|
|
$
|
236,103
|
|
|
$
|
377,702
|
|
|
$
|
312,575
|
|
Earnings per share:
|
|
|
|
|
|
|
|
|
||||||||
Basic earnings per share
|
|
$
|
3.60
|
|
|
$
|
3.68
|
|
|
$
|
5.86
|
|
|
$
|
4.86
|
|
Diluted earnings per share
|
|
$
|
3.54
|
|
|
$
|
3.64
|
|
|
$
|
5.76
|
|
|
$
|
4.81
|
|
Dividends declared per share
|
|
$
|
0.41
|
|
|
$
|
0.37
|
|
|
$
|
0.82
|
|
|
$
|
0.74
|
|
|
|
Three months ended June 30,
|
|
Six months ended June 30,
|
||||||||||||
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Comprehensive income
|
|
(Dollars in thousands)
|
||||||||||||||
Net income
|
|
$
|
232,190
|
|
|
$
|
236,103
|
|
|
$
|
377,702
|
|
|
$
|
312,575
|
|
Other comprehensive income, net of tax:
|
|
|
|
|
|
|
|
|
||||||||
Foreign currency translation adjustments
|
|
43,565
|
|
|
9,942
|
|
|
21,352
|
|
|
87,675
|
|
||||
Net unrealized investment gains
|
|
306,329
|
|
|
643,893
|
|
|
509,444
|
|
|
1,191,118
|
|
||||
Defined benefit pension and postretirement plan adjustments
|
|
849
|
|
|
1,156
|
|
|
1,773
|
|
|
(1,703
|
)
|
||||
Total other comprehensive income, net of tax
|
|
350,743
|
|
|
654,991
|
|
|
532,569
|
|
|
1,277,090
|
|
||||
Total comprehensive income
|
|
$
|
582,933
|
|
|
$
|
891,094
|
|
|
$
|
910,271
|
|
|
$
|
1,589,665
|
|
|
|
Six months ended June 30,
|
||||||
|
|
2017
|
|
2016
|
||||
|
|
(Dollars in thousands)
|
||||||
Cash Flows from Operating Activities:
|
|
|
|
|
||||
Net income
|
|
$
|
377,702
|
|
|
$
|
312,575
|
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
|
||||
Change in operating assets and liabilities:
|
|
|
|
|
||||
Accrued investment income
|
|
(34,676
|
)
|
|
(34,705
|
)
|
||
Premiums receivable and other reinsurance balances
|
|
(230,650
|
)
|
|
(98,610
|
)
|
||
Deferred policy acquisition costs
|
|
35,870
|
|
|
(5,435
|
)
|
||
Reinsurance ceded receivable balances
|
|
(127,995
|
)
|
|
(60,465
|
)
|
||
Future policy benefits, other policy claims and benefits, and other reinsurance balances
|
|
745,799
|
|
|
380,297
|
|
||
Deferred income taxes
|
|
142,044
|
|
|
101,163
|
|
||
Other assets and other liabilities, net
|
|
(63,811
|
)
|
|
(43,708
|
)
|
||
Amortization of net investment premiums, discounts and other
|
|
(47,563
|
)
|
|
(42,843
|
)
|
||
Depreciation and amortization expense
|
|
13,869
|
|
|
12,888
|
|
||
Investment related (gains) losses, net
|
|
(116,818
|
)
|
|
2,622
|
|
||
Other, net
|
|
(37,797
|
)
|
|
70,667
|
|
||
Net cash provided by operating activities
|
|
655,974
|
|
|
594,446
|
|
||
Cash Flows from Investing Activities:
|
|
|
|
|
||||
Sales of fixed maturity securities available-for-sale
|
|
4,288,713
|
|
|
2,271,414
|
|
||
Maturities of fixed maturity securities available-for-sale
|
|
313,530
|
|
|
273,552
|
|
||
Sales of equity securities
|
|
166,916
|
|
|
132,932
|
|
||
Principal payments on mortgage loans on real estate
|
|
135,450
|
|
|
294,843
|
|
||
Principal payments on policy loans
|
|
26,658
|
|
|
25,065
|
|
||
Purchases of fixed maturity securities available-for-sale
|
|
(5,311,818
|
)
|
|
(4,416,290
|
)
|
||
Purchases of equity securities
|
|
(32,299
|
)
|
|
(408,684
|
)
|
||
Cash invested in mortgage loans on real estate
|
|
(463,063
|
)
|
|
(543,454
|
)
|
||
Cash invested in policy loans
|
|
(5,830
|
)
|
|
(1,679
|
)
|
||
Cash invested in funds withheld at interest
|
|
(6,910
|
)
|
|
(27,868
|
)
|
||
Purchases of property and equipment
|
|
31,686
|
|
|
—
|
|
||
Change in short-term investments
|
|
22,671
|
|
|
350,062
|
|
||
Change in other invested assets
|
|
(55,379
|
)
|
|
(8,100
|
)
|
||
Net cash used in investing activities
|
|
(889,675
|
)
|
|
(2,058,207
|
)
|
||
Cash Flows from Financing Activities:
|
|
|
|
|
||||
Dividends to stockholders
|
|
(52,815
|
)
|
|
(47,746
|
)
|
||
Repayment of collateral finance and securitization notes
|
|
(23,761
|
)
|
|
(35,369
|
)
|
||
Proceeds from long-term debt issuance
|
|
—
|
|
|
799,984
|
|
||
Debt issuance costs
|
|
—
|
|
|
(9,026
|
)
|
||
Principal payments of long-term debt
|
|
(301,278
|
)
|
|
(1,227
|
)
|
||
Purchases of treasury stock
|
|
(10,578
|
)
|
|
(120,806
|
)
|
||
Exercise of stock options, net
|
|
2,527
|
|
|
5,219
|
|
||
Change in cash collateral for derivative positions and other arrangements
|
|
(7,046
|
)
|
|
57,055
|
|
||
Deposits on universal life and other investment type policies and contracts
|
|
917,675
|
|
|
513,679
|
|
||
Withdrawals on universal life and other investment type policies and contracts
|
|
(402,528
|
)
|
|
(208,743
|
)
|
||
Net cash provided by financing activities
|
|
122,196
|
|
|
953,020
|
|
||
Effect of exchange rate changes on cash
|
|
34,137
|
|
|
19,795
|
|
||
Change in cash and cash equivalents
|
|
(77,368
|
)
|
|
(490,946
|
)
|
||
Cash and cash equivalents, beginning of period
|
|
1,200,718
|
|
|
1,525,275
|
|
||
Cash and cash equivalents, end of period
|
|
$
|
1,123,350
|
|
|
$
|
1,034,329
|
|
Supplemental disclosures of cash flow information:
|
|
|
|
|
||||
Interest paid
|
|
$
|
90,425
|
|
|
$
|
68,445
|
|
Income taxes paid, net of refunds
|
|
$
|
26,447
|
|
|
$
|
43,838
|
|
Non-cash transactions:
|
|
|
|
|
||||
Transfer of invested assets
|
|
$
|
2,243,360
|
|
|
$
|
1,730
|
|
1.
|
Business and Basis of Presentation
|
2.
|
Earnings Per Share
|
|
|
Three months ended June 30,
|
|
Six months ended June 30,
|
||||||||||||
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Earnings:
|
|
|
|
|
|
|
|
|
||||||||
Net income (numerator for basic and diluted calculations)
|
|
$
|
232,190
|
|
|
$
|
236,103
|
|
|
$
|
377,702
|
|
|
$
|
312,575
|
|
Shares:
|
|
|
|
|
|
|
|
|
||||||||
Weighted average outstanding shares (denominator for basic calculation)
|
|
64,449
|
|
|
64,126
|
|
|
64,401
|
|
|
64,348
|
|
||||
Equivalent shares from outstanding stock options
|
|
1,159
|
|
|
670
|
|
|
1,204
|
|
|
660
|
|
||||
Denominator for diluted calculation
|
|
65,608
|
|
|
64,796
|
|
|
65,605
|
|
|
65,008
|
|
||||
Earnings per share:
|
|
|
|
|
|
|
|
|
||||||||
Basic
|
|
$
|
3.60
|
|
|
$
|
3.68
|
|
|
$
|
5.86
|
|
|
$
|
4.86
|
|
Diluted
|
|
$
|
3.54
|
|
|
$
|
3.64
|
|
|
$
|
5.76
|
|
|
$
|
4.81
|
|
3.
|
Equity
|
|
|
Issued
|
|
Held In Treasury
|
|
Outstanding
|
|||
Balance, December 31, 2016
|
|
79,137,758
|
|
|
14,835,256
|
|
|
64,302,502
|
|
Stock-based compensation
(1)
|
|
—
|
|
|
(189,355
|
)
|
|
189,355
|
|
Balance, June 30, 2017
|
|
79,137,758
|
|
|
14,645,901
|
|
|
64,491,857
|
|
|
|
Issued
|
|
Held In Treasury
|
|
Outstanding
|
|||
Balance, December 31, 2015
|
|
79,137,758
|
|
|
13,933,232
|
|
|
65,204,526
|
|
Common stock acquired
|
|
—
|
|
|
1,352,211
|
|
|
(1,352,211
|
)
|
Stock-based compensation
(1)
|
|
—
|
|
|
(217,434
|
)
|
|
217,434
|
|
Balance, June 30, 2016
|
|
79,137,758
|
|
|
15,068,009
|
|
|
64,069,749
|
|
(1)
|
Represents net shares issued from treasury pursuant to the Company’s equity-based compensation programs.
|
|
|
Accumulated
Currency
Translation
Adjustments
|
|
Unrealized
Appreciation
(Depreciation)
of Investments
(1)
|
|
Pension and
Postretirement
Benefits
|
|
Total
|
||||||||
Balance, December 31, 2016
|
|
$
|
(172,541
|
)
|
|
$
|
1,355,033
|
|
|
$
|
(43,163
|
)
|
|
$
|
1,139,329
|
|
Other comprehensive income (loss) before reclassifications
|
|
(13,936
|
)
|
|
774,688
|
|
|
(196
|
)
|
|
760,556
|
|
||||
Amounts reclassified to (from) AOCI
|
|
—
|
|
|
(39,360
|
)
|
|
2,935
|
|
|
(36,425
|
)
|
||||
Deferred income tax benefit (expense)
|
|
35,288
|
|
|
(225,884
|
)
|
|
(966
|
)
|
|
(191,562
|
)
|
||||
Balance, June 30, 2017
|
|
$
|
(151,189
|
)
|
|
$
|
1,864,477
|
|
|
$
|
(41,390
|
)
|
|
$
|
1,671,898
|
|
|
|
Accumulated
Currency
Translation
Adjustments
|
|
Unrealized
Appreciation
(Depreciation)
of Investments
(1)
|
|
Pension and
Postretirement
Benefits
|
|
Total
|
||||||||
Balance, December 31, 2015
|
|
$
|
(181,151
|
)
|
|
$
|
935,697
|
|
|
$
|
(46,262
|
)
|
|
$
|
708,284
|
|
Other comprehensive income (loss) before reclassifications
|
|
99,374
|
|
|
1,759,753
|
|
|
(6,083
|
)
|
|
1,853,044
|
|
||||
Amounts reclassified to (from) AOCI
|
|
—
|
|
|
(24,366
|
)
|
|
3,467
|
|
|
(20,899
|
)
|
||||
Deferred income tax benefit (expense)
|
|
(11,699
|
)
|
|
(544,269
|
)
|
|
913
|
|
|
(555,055
|
)
|
||||
Balance, June 30, 2016
|
|
$
|
(93,476
|
)
|
|
$
|
2,126,815
|
|
|
$
|
(47,965
|
)
|
|
$
|
1,985,374
|
|
(1)
|
Includes cash flow hedges of
$1,131
and
$(2,496)
as of
June 30, 2017
and
December 31, 2016
, respectively, and
$(41,192)
and
$(29,397)
as of
June 30, 2016
and
December 31, 2015
, respectively. See Note 5 - “Derivative Instruments” for additional information on cash flow hedges.
|
|
|
Amount Reclassified from AOCI
|
|
|
||||||||||||||
|
|
Three months ended June 30,
|
|
Six months ended June 30,
|
|
|
||||||||||||
Details about AOCI Components
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
|
Affected Line Item in
Statements of Income
|
||||||||
Net unrealized investment gains (losses):
|
|
|
|
|
|
|
|
|
|
|
||||||||
Net unrealized gains and losses on available-for-sale securities
|
|
$
|
40,374
|
|
|
$
|
30,190
|
|
|
$
|
28,517
|
|
|
$
|
11,899
|
|
|
Investment related gains (losses), net
|
Cash flow hedges - Currency/Interest rate
|
|
132
|
|
|
93
|
|
|
329
|
|
|
253
|
|
|
(1)
|
||||
Cash flow hedges - Forward bond purchase commitments
|
|
51
|
|
|
(1,045
|
)
|
|
101
|
|
|
(257
|
)
|
|
(1)
|
||||
Deferred policy acquisition costs attributed to unrealized gains and losses
|
|
4,565
|
|
|
5,365
|
|
|
10,413
|
|
|
12,471
|
|
|
(2)
|
||||
Total
|
|
45,122
|
|
|
34,603
|
|
|
39,360
|
|
|
24,366
|
|
|
|
||||
Provision for income taxes
|
|
(15,218
|
)
|
|
(9,646
|
)
|
|
(12,024
|
)
|
|
(4,996
|
)
|
|
|
||||
Net unrealized gains (losses), net of tax
|
|
$
|
29,904
|
|
|
$
|
24,957
|
|
|
$
|
27,336
|
|
|
$
|
19,370
|
|
|
|
Amortization of defined benefit plan items:
|
|
|
|
|
|
|
|
|
|
|
||||||||
Prior service cost (credit)
|
|
$
|
60
|
|
|
$
|
(75
|
)
|
|
$
|
142
|
|
|
$
|
(153
|
)
|
|
(3)
|
Actuarial gains/(losses)
|
|
(1,539
|
)
|
|
(1,841
|
)
|
|
(3,077
|
)
|
|
(3,314
|
)
|
|
(3)
|
||||
Total
|
|
(1,479
|
)
|
|
(1,916
|
)
|
|
(2,935
|
)
|
|
(3,467
|
)
|
|
|
||||
Provision for income taxes
|
|
517
|
|
|
670
|
|
|
1,027
|
|
|
1,213
|
|
|
|
||||
Amortization of defined benefit plans, net of tax
|
|
$
|
(962
|
)
|
|
$
|
(1,246
|
)
|
|
$
|
(1,908
|
)
|
|
$
|
(2,254
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Total reclassifications for the period
|
|
$
|
28,942
|
|
|
$
|
23,711
|
|
|
$
|
25,428
|
|
|
$
|
17,116
|
|
|
|
(1)
|
See Note 5 - “Derivative Instruments” for additional information on cash flow hedges.
|
(2)
|
This AOCI component is included in the computation of the deferred policy acquisition cost. See Note 8 – “Deferred Policy Acquisition Costs” of the 2016 Annual Report for additional details.
|
(3)
|
This AOCI component is included in the computation of the net periodic pension cost. See Note 10 – “Employee Benefit Plans” for additional details.
|
4.
|
Investments
|
June 30, 2017:
|
|
Amortized Cost
|
|
Unrealized Gains
|
|
Unrealized Losses
|
|
Estimated Fair Value
|
|
% of Total
|
|
Other-than-
temporary impairments in AOCI |
|||||||||||
Available-for-sale:
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Corporate securities
|
|
$
|
21,252,180
|
|
|
$
|
1,189,750
|
|
|
$
|
100,269
|
|
|
$
|
22,341,661
|
|
|
61.5
|
%
|
|
$
|
—
|
|
Canadian and Canadian provincial governments
|
|
2,713,972
|
|
|
1,296,242
|
|
|
2,460
|
|
|
4,007,754
|
|
|
11.0
|
|
|
—
|
|
|||||
Residential mortgage-backed securities
|
|
1,505,474
|
|
|
42,619
|
|
|
8,794
|
|
|
1,539,299
|
|
|
4.2
|
|
|
—
|
|
|||||
Asset-backed securities
|
|
1,630,499
|
|
|
17,266
|
|
|
5,924
|
|
|
1,641,841
|
|
|
4.5
|
|
|
275
|
|
|||||
Commercial mortgage-backed securities
|
|
1,558,035
|
|
|
28,928
|
|
|
4,935
|
|
|
1,582,028
|
|
|
4.4
|
|
|
—
|
|
|||||
U.S. government and agencies
|
|
1,738,419
|
|
|
15,193
|
|
|
32,048
|
|
|
1,721,564
|
|
|
4.7
|
|
|
—
|
|
|||||
State and political subdivisions
|
|
599,622
|
|
|
47,564
|
|
|
8,216
|
|
|
638,970
|
|
|
1.8
|
|
|
—
|
|
|||||
Other foreign government, supranational and foreign government-sponsored enterprises
|
|
2,740,133
|
|
|
141,973
|
|
|
9,797
|
|
|
2,872,309
|
|
|
7.9
|
|
|
—
|
|
|||||
Total fixed maturity securities
|
|
$
|
33,738,334
|
|
|
$
|
2,779,535
|
|
|
$
|
172,443
|
|
|
$
|
36,345,426
|
|
|
100.0
|
%
|
|
$
|
275
|
|
Non-redeemable preferred stock
|
|
$
|
34,545
|
|
|
$
|
435
|
|
|
$
|
3,021
|
|
|
$
|
31,959
|
|
|
30.6
|
%
|
|
|
||
Other equity securities
|
|
75,413
|
|
|
522
|
|
|
3,617
|
|
|
72,318
|
|
|
69.4
|
|
|
|
||||||
Total equity securities
|
|
$
|
109,958
|
|
|
$
|
957
|
|
|
$
|
6,638
|
|
|
$
|
104,277
|
|
|
100.0
|
%
|
|
|
December 31, 2016:
|
|
Amortized Cost
|
|
Unrealized Gains
|
|
Unrealized Losses
|
|
Estimated Fair Value
|
|
% of Total
|
|
Other-than-
temporary impairments in AOCI |
|||||||||||
Available-for-sale:
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Corporate securities
|
|
$
|
18,924,711
|
|
|
$
|
911,618
|
|
|
$
|
217,245
|
|
|
$
|
19,619,084
|
|
|
61.1
|
%
|
|
$
|
—
|
|
Canadian and Canadian provincial governments
|
|
2,561,605
|
|
|
1,085,982
|
|
|
3,541
|
|
|
3,644,046
|
|
|
11.4
|
|
|
—
|
|
|||||
Residential mortgage-backed securities
|
|
1,258,039
|
|
|
33,917
|
|
|
13,380
|
|
|
1,278,576
|
|
|
4.0
|
|
|
(375
|
)
|
|||||
Asset-backed securities
|
|
1,443,822
|
|
|
9,350
|
|
|
23,828
|
|
|
1,429,344
|
|
|
4.5
|
|
|
275
|
|
|||||
Commercial mortgage-backed securities
|
|
1,342,440
|
|
|
28,973
|
|
|
7,759
|
|
|
1,363,654
|
|
|
4.2
|
|
|
—
|
|
|||||
U.S. government and agencies
|
|
1,518,702
|
|
|
12,644
|
|
|
63,044
|
|
|
1,468,302
|
|
|
4.6
|
|
|
—
|
|
|||||
State and political subdivisions
|
|
566,761
|
|
|
37,499
|
|
|
12,464
|
|
|
591,796
|
|
|
1.8
|
|
|
—
|
|
|||||
Other foreign government, supranational and foreign government-sponsored enterprises
|
|
2,595,707
|
|
|
123,054
|
|
|
19,938
|
|
|
2,698,823
|
|
|
8.4
|
|
|
—
|
|
|||||
Total fixed maturity securities
|
|
$
|
30,211,787
|
|
|
$
|
2,243,037
|
|
|
$
|
361,199
|
|
|
$
|
32,093,625
|
|
|
100.0
|
%
|
|
$
|
(100
|
)
|
Non-redeemable preferred stock
|
|
$
|
55,812
|
|
|
$
|
1,648
|
|
|
$
|
6,337
|
|
|
$
|
51,123
|
|
|
18.6
|
%
|
|
|
||
Other equity securities
|
|
229,767
|
|
|
1,792
|
|
|
7,321
|
|
|
224,238
|
|
|
81.4
|
|
|
|
||||||
Total equity securities
|
|
$
|
285,579
|
|
|
$
|
3,440
|
|
|
$
|
13,658
|
|
|
$
|
275,361
|
|
|
100.0
|
%
|
|
|
|
June 30, 2017
|
|
December 31, 2016
|
||||||||||||
|
Amortized
Cost
|
|
Estimated
Fair Value
|
|
Amortized
Cost
|
|
Estimated
Fair Value
|
||||||||
Fixed maturity securities pledged as collateral
|
$
|
69,849
|
|
|
$
|
74,441
|
|
|
$
|
207,066
|
|
|
$
|
210,676
|
|
Fixed maturity securities received as collateral
|
n/a
|
|
|
457,801
|
|
|
n/a
|
|
|
300,925
|
|
||||
Assets in trust held to satisfy collateral requirements
|
14,706,225
|
|
|
15,723,178
|
|
|
12,135,258
|
|
|
12,874,370
|
|
|
June 30, 2017
|
|
December 31, 2016
|
||||||||||||
|
Amortized
Cost
|
|
Estimated
Fair Value
|
|
Amortized
Cost
|
|
Estimated
Fair Value
|
||||||||
Fixed maturity securities guaranteed or issued by:
|
|
|
|
|
|
|
|
||||||||
Canadian province of Quebec
|
$
|
1,060,922
|
|
|
$
|
1,785,573
|
|
|
$
|
1,004,261
|
|
|
$
|
1,612,957
|
|
Canadian province of Ontario
|
886,518
|
|
|
1,228,391
|
|
|
832,764
|
|
|
1,126,433
|
|
|
|
Amortized Cost
|
|
Estimated Fair Value
|
||||
Available-for-sale:
|
|
|
|
|
||||
Due in one year or less
|
|
$
|
861,051
|
|
|
$
|
868,405
|
|
Due after one year through five years
|
|
7,421,897
|
|
|
7,696,337
|
|
||
Due after five years through ten years
|
|
9,514,341
|
|
|
10,016,984
|
|
||
Due after ten years
|
|
11,247,037
|
|
|
13,000,532
|
|
||
Asset and mortgage-backed securities
|
|
4,694,008
|
|
|
4,763,168
|
|
||
Total
|
|
$
|
33,738,334
|
|
|
$
|
36,345,426
|
|
June 30, 2017:
|
|
|
|
Estimated
|
|
|
|||||
|
|
Amortized Cost
|
|
Fair Value
|
|
% of Total
|
|||||
Finance
|
|
$
|
7,741,482
|
|
|
$
|
8,077,195
|
|
|
36.1
|
%
|
Industrial
|
|
11,215,292
|
|
|
11,792,664
|
|
|
52.9
|
|
||
Utility
|
|
2,295,406
|
|
|
2,471,802
|
|
|
11.0
|
|
||
Total
|
|
$
|
21,252,180
|
|
|
$
|
22,341,661
|
|
|
100.0
|
%
|
|
|
|
|
|
|
|
|||||
December 31, 2016:
|
|
|
|
Estimated
|
|
|
|||||
|
|
Amortized Cost
|
|
Fair Value
|
|
% of Total
|
|||||
Finance
|
|
$
|
6,725,199
|
|
|
$
|
6,888,968
|
|
|
35.2
|
%
|
Industrial
|
|
10,228,813
|
|
|
10,639,613
|
|
|
54.2
|
|
||
Utility
|
|
1,970,699
|
|
|
2,090,503
|
|
|
10.6
|
|
||
Total
|
|
$
|
18,924,711
|
|
|
$
|
19,619,084
|
|
|
100.0
|
%
|
|
|
Three months ended June 30,
|
|
Six months ended June 30,
|
||||||||||||
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Balance, beginning of period
|
|
$
|
3,677
|
|
|
$
|
7,284
|
|
|
$
|
6,013
|
|
|
$
|
7,284
|
|
Credit loss OTTI previously recognized on securities which matured, paid down, prepaid or were sold during the period
|
|
—
|
|
|
(310
|
)
|
|
(2,336
|
)
|
|
(310
|
)
|
||||
Balance, end of period
|
|
$
|
3,677
|
|
|
$
|
6,974
|
|
|
$
|
3,677
|
|
|
$
|
6,974
|
|
|
|
June 30, 2017
|
|
December 31, 2016
|
||||||||||
|
|
Gross
Unrealized
Losses
|
|
% of Total
|
|
Gross
Unrealized
Losses
|
|
% of Total
|
||||||
Less than 20%
|
|
$
|
150,762
|
|
|
84.2
|
%
|
|
$
|
337,831
|
|
|
90.1
|
%
|
20% or more for less than six months
|
|
7,593
|
|
|
4.2
|
|
|
19,438
|
|
|
5.2
|
|
||
20% or more for six months or greater
|
|
20,726
|
|
|
11.6
|
|
|
17,588
|
|
|
4.7
|
|
||
Total
|
|
$
|
179,081
|
|
|
100.0
|
%
|
|
$
|
374,857
|
|
|
100.0
|
%
|
|
|
Less than 12 months
|
|
12 months or greater
|
|
Total
|
||||||||||||||||||
|
|
|
|
Gross
|
|
|
|
Gross
|
|
|
|
Gross
|
||||||||||||
June 30, 2017:
|
|
Estimated
|
|
Unrealized
|
|
Estimated
|
|
Unrealized
|
|
Estimated
|
|
Unrealized
|
||||||||||||
|
|
Fair Value
|
|
Losses
|
|
Fair Value
|
|
Losses
|
|
Fair Value
|
|
Losses
|
||||||||||||
Investment grade securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Corporate securities
|
|
$
|
2,895,605
|
|
|
$
|
46,389
|
|
|
$
|
399,546
|
|
|
$
|
23,252
|
|
|
$
|
3,295,151
|
|
|
$
|
69,641
|
|
Canadian and Canadian provincial governments
|
|
116,719
|
|
|
2,457
|
|
|
—
|
|
|
—
|
|
|
116,719
|
|
|
2,457
|
|
||||||
Residential mortgage-backed securities
|
|
471,933
|
|
|
6,872
|
|
|
100,785
|
|
|
1,918
|
|
|
572,718
|
|
|
8,790
|
|
||||||
Asset-backed securities
|
|
285,211
|
|
|
1,451
|
|
|
204,154
|
|
|
3,916
|
|
|
489,365
|
|
|
5,367
|
|
||||||
Commercial mortgage-backed securities
|
|
352,867
|
|
|
4,897
|
|
|
2,195
|
|
|
38
|
|
|
355,062
|
|
|
4,935
|
|
||||||
U.S. government and agencies
|
|
1,378,976
|
|
|
31,962
|
|
|
13,763
|
|
|
86
|
|
|
1,392,739
|
|
|
32,048
|
|
||||||
State and political subdivisions
|
|
125,465
|
|
|
5,098
|
|
|
13,558
|
|
|
3,118
|
|
|
139,023
|
|
|
8,216
|
|
||||||
Other foreign government, supranational and foreign government-sponsored enterprises
|
|
440,670
|
|
|
7,189
|
|
|
29,234
|
|
|
1,616
|
|
|
469,904
|
|
|
8,805
|
|
||||||
Total investment grade securities
|
|
6,067,446
|
|
|
106,315
|
|
|
763,235
|
|
|
33,944
|
|
|
6,830,681
|
|
|
140,259
|
|
||||||
Below investment grade securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Corporate securities
|
|
255,991
|
|
|
4,547
|
|
|
93,562
|
|
|
26,081
|
|
|
349,553
|
|
|
30,628
|
|
||||||
Canadian and Canadian provincial governments
|
|
1,247
|
|
|
3
|
|
|
—
|
|
|
—
|
|
|
1,247
|
|
|
3
|
|
||||||
Residential mortgage-backed securities
|
|
—
|
|
|
—
|
|
|
107
|
|
|
4
|
|
|
107
|
|
|
4
|
|
||||||
Asset-backed securities
|
|
—
|
|
|
—
|
|
|
7,295
|
|
|
557
|
|
|
7,295
|
|
|
557
|
|
||||||
Other foreign government, supranational and foreign government-sponsored enterprises
|
|
38,069
|
|
|
287
|
|
|
17,606
|
|
|
705
|
|
|
55,675
|
|
|
992
|
|
||||||
Total below investment grade securities
|
|
295,307
|
|
|
4,837
|
|
|
118,570
|
|
|
27,347
|
|
|
413,877
|
|
|
32,184
|
|
||||||
Total fixed maturity securities
|
|
$
|
6,362,753
|
|
|
$
|
111,152
|
|
|
$
|
881,805
|
|
|
$
|
61,291
|
|
|
$
|
7,244,558
|
|
|
$
|
172,443
|
|
Non-redeemable preferred stock
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
24,807
|
|
|
$
|
3,021
|
|
|
$
|
24,807
|
|
|
$
|
3,021
|
|
Other equity securities
|
|
64,990
|
|
|
3,617
|
|
|
—
|
|
|
—
|
|
|
64,990
|
|
|
3,617
|
|
||||||
Total equity securities
|
|
$
|
64,990
|
|
|
$
|
3,617
|
|
|
$
|
24,807
|
|
|
$
|
3,021
|
|
|
$
|
89,797
|
|
|
$
|
6,638
|
|
|
|
Less than 12 months
|
|
12 months or greater
|
|
Total
|
||||||||||||||||||
|
|
|
|
Gross
|
|
|
|
Gross
|
|
|
|
Gross
|
||||||||||||
December 31, 2016:
|
|
Estimated
|
|
Unrealized
|
|
Estimated
|
|
Unrealized
|
|
Estimated
|
|
Unrealized
|
||||||||||||
|
|
Fair Value
|
|
Losses
|
|
Fair Value
|
|
Losses
|
|
Fair Value
|
|
Losses
|
||||||||||||
Investment grade securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Corporate securities
|
|
$
|
4,661,706
|
|
|
$
|
124,444
|
|
|
$
|
549,273
|
|
|
$
|
43,282
|
|
|
$
|
5,210,979
|
|
|
$
|
167,726
|
|
Canadian and Canadian provincial governments
|
|
101,578
|
|
|
3,541
|
|
|
—
|
|
|
—
|
|
|
101,578
|
|
|
3,541
|
|
||||||
Residential mortgage-backed securities
|
|
490,473
|
|
|
9,733
|
|
|
112,216
|
|
|
3,635
|
|
|
602,689
|
|
|
13,368
|
|
||||||
Asset-backed securities
|
|
563,259
|
|
|
12,010
|
|
|
257,166
|
|
|
9,653
|
|
|
820,425
|
|
|
21,663
|
|
||||||
Commercial mortgage-backed securities
|
|
368,465
|
|
|
6,858
|
|
|
10,853
|
|
|
166
|
|
|
379,318
|
|
|
7,024
|
|
||||||
U.S. government and agencies
|
|
1,056,101
|
|
|
63,044
|
|
|
—
|
|
|
—
|
|
|
1,056,101
|
|
|
63,044
|
|
||||||
State and political subdivisions
|
|
187,194
|
|
|
9,396
|
|
|
13,635
|
|
|
3,068
|
|
|
200,829
|
|
|
12,464
|
|
||||||
Other foreign government, supranational and foreign government-sponsored enterprises
|
|
524,236
|
|
|
13,372
|
|
|
51,097
|
|
|
2,981
|
|
|
575,333
|
|
|
16,353
|
|
||||||
Total investment grade securities
|
|
7,953,012
|
|
|
242,398
|
|
|
994,240
|
|
|
62,785
|
|
|
8,947,252
|
|
|
305,183
|
|
||||||
Below investment grade securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Corporate securities
|
|
330,757
|
|
|
7,914
|
|
|
163,152
|
|
|
41,605
|
|
|
493,909
|
|
|
49,519
|
|
||||||
Residential mortgage-backed securities
|
|
—
|
|
|
—
|
|
|
412
|
|
|
12
|
|
|
412
|
|
|
12
|
|
||||||
Asset-backed securities
|
|
5,904
|
|
|
700
|
|
|
12,581
|
|
|
1,465
|
|
|
18,485
|
|
|
2,165
|
|
||||||
Commercial mortgage-backed securities
|
|
5,815
|
|
|
735
|
|
|
—
|
|
|
—
|
|
|
5,815
|
|
|
735
|
|
||||||
Other foreign government, supranational and foreign government-sponsored enterprises
|
|
32,355
|
|
|
1,258
|
|
|
39,763
|
|
|
2,327
|
|
|
72,118
|
|
|
3,585
|
|
||||||
Total below investment grade securities
|
|
374,831
|
|
|
10,607
|
|
|
215,908
|
|
|
45,409
|
|
|
590,739
|
|
|
56,016
|
|
||||||
Total fixed maturity securities
|
|
$
|
8,327,843
|
|
|
$
|
253,005
|
|
|
$
|
1,210,148
|
|
|
$
|
108,194
|
|
|
$
|
9,537,991
|
|
|
$
|
361,199
|
|
Non-redeemable preferred stock
|
|
$
|
10,831
|
|
|
$
|
831
|
|
|
$
|
21,879
|
|
|
$
|
5,506
|
|
|
$
|
32,710
|
|
|
$
|
6,337
|
|
Other equity securities
|
|
202,068
|
|
|
7,020
|
|
|
6,751
|
|
|
301
|
|
|
208,819
|
|
|
7,321
|
|
||||||
Total equity securities
|
|
$
|
212,899
|
|
|
$
|
7,851
|
|
|
$
|
28,630
|
|
|
$
|
5,807
|
|
|
$
|
241,529
|
|
|
$
|
13,658
|
|
|
Three months ended June 30,
|
|
Six months ended June 30,
|
||||||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Fixed maturity securities available-for-sale
|
$
|
355,735
|
|
|
$
|
323,592
|
|
|
$
|
680,235
|
|
|
$
|
636,007
|
|
Mortgage loans on real estate
|
44,442
|
|
|
41,900
|
|
|
88,789
|
|
|
81,692
|
|
||||
Policy loans
|
15,194
|
|
|
16,372
|
|
|
30,466
|
|
|
32,506
|
|
||||
Funds withheld at interest
|
97,367
|
|
|
112,893
|
|
|
224,945
|
|
|
168,873
|
|
||||
Short-term investments and cash and cash equivalents
|
1,779
|
|
|
2,322
|
|
|
3,289
|
|
|
4,513
|
|
||||
Other invested assets
|
23,066
|
|
|
28,150
|
|
|
42,893
|
|
|
36,758
|
|
||||
Investment income
|
537,583
|
|
|
525,229
|
|
|
1,070,617
|
|
|
960,349
|
|
||||
Investment expense
|
(19,045
|
)
|
|
(17,563
|
)
|
|
(37,715
|
)
|
|
(35,417
|
)
|
||||
Investment income, net of related expenses
|
$
|
518,538
|
|
|
$
|
507,666
|
|
|
$
|
1,032,902
|
|
|
$
|
924,932
|
|
|
Three months ended June 30,
|
|
Six months ended June 30,
|
||||||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Fixed maturity and equity securities available for sale:
|
|
|
|
|
|
|
|
||||||||
Other-than-temporary impairment losses on fixed maturity securities recognized in earnings
|
$
|
(3,401
|
)
|
|
$
|
(846
|
)
|
|
$
|
(20,590
|
)
|
|
$
|
(34,663
|
)
|
Gain on investment activity
|
54,220
|
|
|
53,615
|
|
|
72,113
|
|
|
80,807
|
|
||||
Loss on investment activity
|
(10,471
|
)
|
|
(22,556
|
)
|
|
(23,034
|
)
|
|
(34,343
|
)
|
||||
Other impairment losses and change in mortgage loan provision
|
(6,675
|
)
|
|
211
|
|
|
(6,774
|
)
|
|
(1,849
|
)
|
||||
Derivatives and other, net
|
22,622
|
|
|
87,840
|
|
|
95,103
|
|
|
(12,574
|
)
|
||||
Total investment related gains (losses), net
|
$
|
56,295
|
|
|
$
|
118,264
|
|
|
$
|
116,818
|
|
|
$
|
(2,622
|
)
|
|
June 30, 2017
|
|
December 31, 2016
|
||||||||||||
|
Amortized
Cost
|
|
Estimated
Fair Value
|
|
Amortized
Cost
|
|
Estimated
Fair Value
|
||||||||
Borrowed securities
|
$
|
269,280
|
|
|
$
|
284,083
|
|
|
$
|
263,820
|
|
|
$
|
279,186
|
|
Securities lending:
|
|
|
|
|
|
|
|
||||||||
Securities loaned
|
117,217
|
|
|
121,064
|
|
|
74,389
|
|
|
73,625
|
|
||||
Securities received
|
n/a
|
|
|
109,000
|
|
|
n/a
|
|
|
80,000
|
|
||||
Repurchase program/reverse repurchase program:
|
|
|
|
|
|
|
|
||||||||
Securities pledged
|
486,700
|
|
|
509,579
|
|
|
476,531
|
|
|
499,891
|
|
||||
Securities received
|
n/a
|
|
|
517,871
|
|
|
n/a
|
|
|
515,200
|
|
|
June 30, 2017
|
||||||||||||||||||
|
Remaining Contractual Maturity of the Agreements
|
||||||||||||||||||
|
Overnight and Continuous
|
|
Up to 30 Days
|
|
30-90 Days
|
|
Greater than 90 Days
|
|
Total
|
||||||||||
Securities lending transactions:
|
|
|
|
|
|
|
|
|
|
||||||||||
Corporate securities
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
121,064
|
|
|
$
|
121,064
|
|
Total
|
—
|
|
|
—
|
|
|
—
|
|
|
121,064
|
|
|
121,064
|
|
|||||
Repurchase transactions:
|
|
|
|
|
|
|
|
|
|
||||||||||
Corporate securities
|
—
|
|
|
—
|
|
|
1,311
|
|
|
177,555
|
|
|
178,866
|
|
|||||
Residential mortgage-backed securities
|
—
|
|
|
—
|
|
|
—
|
|
|
89,333
|
|
|
89,333
|
|
|||||
U.S. government and agencies
|
—
|
|
|
—
|
|
|
—
|
|
|
219,522
|
|
|
219,522
|
|
|||||
Foreign government
|
—
|
|
|
—
|
|
|
—
|
|
|
20,953
|
|
|
20,953
|
|
|||||
Other
|
905
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
905
|
|
|||||
Total
|
905
|
|
|
—
|
|
|
1,311
|
|
|
507,363
|
|
|
509,579
|
|
|||||
Total transactions
|
$
|
905
|
|
|
$
|
—
|
|
|
$
|
1,311
|
|
|
$
|
628,427
|
|
|
$
|
630,643
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Gross amount of recognized liabilities for securities lending and repurchase transactions in preceding table
|
|
$
|
674,817
|
|
|||||||||||||||
Amounts related to agreements not included in offsetting disclosure
|
|
$
|
44,174
|
|
|
December 31, 2016
|
||||||||||||||||||
|
Remaining Contractual Maturity of the Agreements
|
||||||||||||||||||
|
Overnight and Continuous
|
|
Up to 30 Days
|
|
30-90 Days
|
|
Greater than 90 Days
|
|
Total
|
||||||||||
Securities lending transactions:
|
|
|
|
|
|
|
|
|
|
||||||||||
Corporate securities
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
4,017
|
|
|
$
|
69,608
|
|
|
$
|
73,625
|
|
Total
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
4,017
|
|
|
$
|
69,608
|
|
|
$
|
73,625
|
|
Repurchase transactions:
|
|
|
|
|
|
|
|
|
|
||||||||||
Corporate securities
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
3,220
|
|
|
$
|
166,979
|
|
|
$
|
170,199
|
|
Residential mortgage-backed securities
|
—
|
|
|
—
|
|
|
—
|
|
|
92,546
|
|
|
92,546
|
|
|||||
U.S. government and agencies
|
—
|
|
|
—
|
|
|
—
|
|
|
216,000
|
|
|
216,000
|
|
|||||
Foreign government
|
—
|
|
|
—
|
|
|
—
|
|
|
19,900
|
|
|
19,900
|
|
|||||
Other
|
1,246
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,246
|
|
|||||
Total
|
1,246
|
|
|
—
|
|
|
3,220
|
|
|
495,425
|
|
|
499,891
|
|
|||||
Total borrowings
|
$
|
1,246
|
|
|
$
|
—
|
|
|
$
|
7,237
|
|
|
$
|
565,033
|
|
|
$
|
573,516
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Gross amount of recognized liabilities for securities lending and repurchase transactions in preceding table
|
|
$
|
624,032
|
|
|||||||||||||||
Amounts related to agreements not included in offsetting disclosure
|
|
$
|
50,516
|
|
|
|
June 30, 2017
|
|
December 31, 2016
|
||||||||||
Property type:
|
|
Carrying Value
|
|
% of Total
|
|
Carrying Value
|
|
% of Total
|
||||||
Office building
|
|
$
|
1,402,369
|
|
|
34.1
|
%
|
|
$
|
1,270,113
|
|
|
33.6
|
%
|
Retail
|
|
1,248,238
|
|
|
30.3
|
|
|
1,179,936
|
|
|
31.2
|
|
||
Industrial
|
|
809,309
|
|
|
19.7
|
|
|
713,461
|
|
|
18.8
|
|
||
Apartment
|
|
483,811
|
|
|
11.8
|
|
|
447,088
|
|
|
11.8
|
|
||
Other commercial
|
|
170,305
|
|
|
4.1
|
|
|
172,609
|
|
|
4.6
|
|
||
Recorded investment
|
|
4,114,032
|
|
|
100.0
|
%
|
|
$
|
3,783,207
|
|
|
100.0
|
%
|
|
Unamortized balance of loan origination fees and expenses
|
|
(1,389
|
)
|
|
|
|
—
|
|
|
|
||||
Valuation allowances
|
|
(8,156
|
)
|
|
|
|
(7,685
|
)
|
|
|
||||
Total mortgage loans on real estate
|
|
$
|
4,104,487
|
|
|
|
|
$
|
3,775,522
|
|
|
|
|
|
June 30, 2017
|
|
December 31, 2016
|
||||||||||
|
|
Recorded
Investment
|
|
% of Total
|
|
Recorded
Investment
|
|
% of Total
|
||||||
Due within five years
|
|
$
|
1,037,000
|
|
|
25.2
|
%
|
|
$
|
822,073
|
|
|
21.7
|
%
|
Due after five years through ten years
|
|
2,236,805
|
|
|
54.4
|
|
|
2,099,559
|
|
|
55.5
|
|
||
Due after ten years
|
|
840,227
|
|
|
20.4
|
|
|
861,575
|
|
|
22.8
|
|
||
Total
|
|
$
|
4,114,032
|
|
|
100.0
|
%
|
|
$
|
3,783,207
|
|
|
100.0
|
%
|
|
Recorded Investment
|
|||||||||||||||||
|
Debt Service Ratios
|
|
|
|
|
|||||||||||||
|
>1.20x
|
|
1.00x - 1.20x
|
|
<1.00x
|
|
Total
|
|
% of Total
|
|||||||||
June 30, 2017:
|
|
|
|
|
|
|
|
|
|
|||||||||
Loan-to-Value Ratio
|
|
|
|
|
|
|
|
|
|
|||||||||
0% - 59.99%
|
$
|
2,009,905
|
|
|
$
|
60,110
|
|
|
$
|
4,060
|
|
|
$
|
2,074,075
|
|
|
50.4
|
%
|
60% - 69.99%
|
1,453,061
|
|
|
57,332
|
|
|
7,684
|
|
|
1,518,077
|
|
|
36.9
|
|
||||
70% - 79.99%
|
377,744
|
|
|
20,575
|
|
|
37,091
|
|
|
435,410
|
|
|
10.6
|
|
||||
Greater than 80%
|
61,704
|
|
|
—
|
|
|
24,766
|
|
|
86,470
|
|
|
2.1
|
|
||||
Total
|
$
|
3,902,414
|
|
|
$
|
138,017
|
|
|
$
|
73,601
|
|
|
$
|
4,114,032
|
|
|
100.0
|
%
|
|
Recorded Investment
|
|||||||||||||||||
|
Debt Service Ratios
|
|
|
|
|
|||||||||||||
|
>1.20x
|
|
1.00x - 1.20x
|
|
<1.00x
|
|
Total
|
|
% of Total
|
|||||||||
December 31, 2016:
|
|
|
|
|
|
|
|
|
|
|||||||||
Loan-to-Value Ratio
|
|
|
|
|
|
|
|
|
|
|||||||||
0% - 59.99%
|
$
|
1,859,640
|
|
|
$
|
64,749
|
|
|
$
|
1,366
|
|
|
$
|
1,925,755
|
|
|
50.8
|
%
|
60% - 69.99%
|
1,257,788
|
|
|
34,678
|
|
|
—
|
|
|
1,292,466
|
|
|
34.2
|
|
||||
70% - 79.99%
|
370,092
|
|
|
20,869
|
|
|
24,369
|
|
|
415,330
|
|
|
11.0
|
|
||||
Greater than 80%
|
114,297
|
|
|
—
|
|
|
35,359
|
|
|
149,656
|
|
|
4.0
|
|
||||
Total
|
$
|
3,601,817
|
|
|
$
|
120,296
|
|
|
$
|
61,094
|
|
|
$
|
3,783,207
|
|
|
100.0
|
%
|
|
|
June 30, 2017
|
|
December 31, 2016
|
||||
31-60 days past due
|
|
$
|
—
|
|
|
$
|
—
|
|
61-90 days past due
|
|
3,729
|
|
|
—
|
|
||
Greater than 90 days
|
|
—
|
|
|
—
|
|
||
Total past due
|
|
$
|
3,729
|
|
|
$
|
—
|
|
Current
|
|
4,110,303
|
|
|
3,783,207
|
|
||
Total
|
|
$
|
4,114,032
|
|
|
$
|
3,783,207
|
|
|
|
June 30, 2017
|
|
December 31, 2016
|
||||
Mortgage loans:
|
|
|
|
|
||||
Individually measured for impairment
|
|
$
|
2,077
|
|
|
$
|
2,216
|
|
Collectively measured for impairment
|
|
4,111,955
|
|
|
3,780,991
|
|
||
Recorded investment
|
|
$
|
4,114,032
|
|
|
$
|
3,783,207
|
|
Valuation allowances:
|
|
|
|
|
||||
Individually measured for impairment
|
|
$
|
—
|
|
|
$
|
—
|
|
Collectively measured for impairment
|
|
8,156
|
|
|
7,685
|
|
||
Total valuation allowances
|
|
$
|
8,156
|
|
|
$
|
7,685
|
|
|
|
Three months ended June 30,
|
|
Six months ended June 30,
|
||||||||||||
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Balance, beginning of period
|
|
$
|
7,786
|
|
|
$
|
6,824
|
|
|
$
|
7,685
|
|
|
$
|
6,813
|
|
Provision (release)
|
|
366
|
|
|
(325
|
)
|
|
467
|
|
|
(314
|
)
|
||||
Translation adjustment
|
|
4
|
|
|
—
|
|
|
4
|
|
|
—
|
|
||||
Balance, end of period
|
|
$
|
8,156
|
|
|
$
|
6,499
|
|
|
$
|
8,156
|
|
|
$
|
6,499
|
|
|
|
Unpaid
Principal
Balance
|
|
Recorded
Investment
|
|
Related
Allowance
|
|
Carrying
Value
|
||||||||
June 30, 2017:
|
|
|
|
|
|
|
|
|
||||||||
Impaired mortgage loans with no valuation allowance recorded
|
|
$
|
2,620
|
|
|
$
|
2,077
|
|
|
$
|
—
|
|
|
$
|
2,077
|
|
Impaired mortgage loans with valuation allowance recorded
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Total impaired mortgage loans
|
|
$
|
2,620
|
|
|
$
|
2,077
|
|
|
$
|
—
|
|
|
$
|
2,077
|
|
December 31, 2016:
|
|
|
|
|
|
|
|
|
||||||||
Impaired mortgage loans with no valuation allowance recorded
|
|
$
|
2,758
|
|
|
$
|
2,216
|
|
|
$
|
—
|
|
|
$
|
2,216
|
|
Impaired mortgage loans with valuation allowance recorded
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Total impaired mortgage loans
|
|
$
|
2,758
|
|
|
$
|
2,216
|
|
|
$
|
—
|
|
|
$
|
2,216
|
|
|
|
|
|
|
|
|
|
|
||||||||
The Company’s average investment in impaired mortgage loans and the related interest income are reflected in the table below for the periods indicated (dollars in thousands):
|
||||||||||||||||
|
|
Three months ended June 30,
|
||||||||||||||
|
|
2017
|
|
2016
|
||||||||||||
|
|
Average
Recorded Investment (1) |
|
Interest
Income
|
|
Average
Recorded
Investment
(1)
|
|
Interest
Income
|
||||||||
Impaired mortgage loans with no valuation allowance recorded
|
|
$
|
2,088
|
|
|
$
|
33
|
|
|
$
|
3,901
|
|
|
$
|
107
|
|
Impaired mortgage loans with valuation allowance recorded
|
|
—
|
|
|
—
|
|
|
4,724
|
|
|
—
|
|
||||
Total impaired mortgage loans
|
|
$
|
2,088
|
|
|
$
|
33
|
|
|
$
|
8,625
|
|
|
$
|
107
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
|
Six months ended June 30,
|
||||||||||||||
|
|
2017
|
|
2016
|
||||||||||||
|
|
Average
Recorded Investment (1) |
|
Interest
Income
|
|
Average
Recorded Investment (1) |
|
Interest
Income
|
||||||||
Impaired mortgage loans with no valuation allowance recorded
|
|
$
|
2,131
|
|
|
$
|
67
|
|
|
$
|
3,945
|
|
|
$
|
216
|
|
Impaired mortgage loans with valuation allowance recorded
|
|
—
|
|
|
—
|
|
|
7,279
|
|
|
—
|
|
||||
Total impaired mortgage loans
|
|
$
|
2,131
|
|
|
$
|
67
|
|
|
$
|
11,224
|
|
|
$
|
216
|
|
|
|
June 30, 2017
|
|
December 31, 2016
|
||||
Equity securities
|
|
$
|
104,277
|
|
|
$
|
275,361
|
|
Limited partnership interests and real estate joint ventures
|
|
746,573
|
|
|
687,522
|
|
||
Derivatives
|
|
158,048
|
|
|
229,108
|
|
||
FVO contractholder-directed unit-linked investments
|
|
204,630
|
|
|
190,120
|
|
||
Other
|
|
284,842
|
|
|
209,829
|
|
||
Total other invested assets
|
|
$
|
1,498,370
|
|
|
$
|
1,591,940
|
|
|
|
June 30, 2017
|
|
December 31, 2016
|
||||||||||||||||||||
|
|
Notional
|
|
Carrying Value/Fair Value
|
|
Notional
|
|
Carrying Value/Fair Value
|
||||||||||||||||
|
|
Amount
|
|
Assets
|
|
Liabilities
|
|
Amount
|
|
Assets
|
|
Liabilities
|
||||||||||||
Derivatives not designated as hedging instruments:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Interest rate swaps
|
|
$
|
973,825
|
|
|
$
|
63,370
|
|
|
$
|
4,375
|
|
|
$
|
949,556
|
|
|
$
|
78,405
|
|
|
$
|
5,949
|
|
Financial futures
|
|
477,407
|
|
|
—
|
|
|
—
|
|
|
475,968
|
|
|
—
|
|
|
—
|
|
||||||
Foreign currency forwards
|
|
15,000
|
|
|
21
|
|
|
63
|
|
|
25,000
|
|
|
—
|
|
|
5,070
|
|
||||||
Consumer price index swaps
|
|
21,991
|
|
|
—
|
|
|
187
|
|
|
20,615
|
|
|
—
|
|
|
262
|
|
||||||
Credit default swaps
|
|
945,000
|
|
|
7,620
|
|
|
1,043
|
|
|
926,000
|
|
|
12,012
|
|
|
2,871
|
|
||||||
Equity options
|
|
541,532
|
|
|
28,301
|
|
|
—
|
|
|
525,894
|
|
|
33,459
|
|
|
—
|
|
||||||
Longevity swaps
|
|
914,080
|
|
|
33,349
|
|
|
—
|
|
|
841,360
|
|
|
26,958
|
|
|
—
|
|
||||||
Mortality swaps
|
|
50,000
|
|
|
—
|
|
|
1,552
|
|
|
50,000
|
|
|
—
|
|
|
2,462
|
|
||||||
Synthetic guaranteed investment contracts
|
|
9,141,018
|
|
|
—
|
|
|
—
|
|
|
8,834,700
|
|
|
—
|
|
|
—
|
|
||||||
Embedded derivatives in:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Modified coinsurance or funds withheld arrangements
|
|
—
|
|
|
61,281
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
22,529
|
|
||||||
Indexed annuity products
|
|
—
|
|
|
—
|
|
|
812,718
|
|
|
—
|
|
|
—
|
|
|
805,672
|
|
||||||
Variable annuity products
|
|
—
|
|
|
—
|
|
|
161,913
|
|
|
—
|
|
|
—
|
|
|
184,636
|
|
||||||
Total non-hedging derivatives
|
|
13,079,853
|
|
|
193,942
|
|
|
981,851
|
|
|
12,649,093
|
|
|
150,834
|
|
|
1,029,451
|
|
||||||
Derivatives designated as hedging instruments:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Interest rate swaps
|
|
435,000
|
|
|
1,267
|
|
|
22,120
|
|
|
435,000
|
|
|
27,901
|
|
|
31,223
|
|
||||||
Foreign currency swaps
|
|
896,873
|
|
|
86,318
|
|
|
7,176
|
|
|
928,505
|
|
|
104,359
|
|
|
734
|
|
||||||
Foreign currency forwards
|
|
150,211
|
|
|
—
|
|
|
4,158
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Total hedging derivatives
|
|
1,482,084
|
|
|
87,585
|
|
|
33,454
|
|
|
1,363,505
|
|
|
132,260
|
|
|
31,957
|
|
||||||
Total derivatives
|
|
$
|
14,561,937
|
|
|
$
|
281,527
|
|
|
$
|
1,015,305
|
|
|
$
|
14,012,598
|
|
|
$
|
283,094
|
|
|
$
|
1,061,408
|
|
|
|
|
|
|
|
|
|
Gross Amounts Not
Offset in the Balance Sheet
|
|
|
||||||||||||||
|
|
Gross Amounts
Recognized
|
|
Gross Amounts
Offset in the
Balance Sheet
|
|
Net Amounts
Presented in the
Balance Sheet
|
|
Financial
Instruments
(1)
|
|
Cash Collateral
Pledged/
Received
|
|
Net Amount
|
||||||||||||
June 30, 2017:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Derivative assets
|
|
$
|
220,246
|
|
|
$
|
(28,849
|
)
|
|
$
|
191,397
|
|
|
$
|
(17,847
|
)
|
|
$
|
(183,179
|
)
|
|
$
|
(9,629
|
)
|
Derivative liabilities
|
|
40,674
|
|
|
(28,849
|
)
|
|
11,825
|
|
|
(59,540
|
)
|
|
(7,461
|
)
|
|
(55,176
|
)
|
||||||
December 31, 2016:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Derivative assets
|
|
$
|
283,094
|
|
|
$
|
(27,028
|
)
|
|
$
|
256,066
|
|
|
$
|
(16,913
|
)
|
|
$
|
(254,498
|
)
|
|
$
|
(15,345
|
)
|
Derivative liabilities
|
|
48,571
|
|
|
(27,028
|
)
|
|
21,543
|
|
|
(95,863
|
)
|
|
(1,441
|
)
|
|
(75,761
|
)
|
(1)
|
Includes initial margin posted to a central clearing partner.
|
Type of Fair Value Hedge
|
|
Hedged Item
|
|
Gains (Losses) Recognized for Derivatives
|
|
Gains (Losses) Recognized for Hedged Items
|
|
Ineffectiveness Recognized in Investment Related Gains (Losses), net
|
||||||
For the three months ended June 30, 2017:
|
|
|
|
|
|
|
||||||||
Foreign currency swaps
|
|
Foreign-denominated fixed maturity securities
|
|
$
|
905
|
|
|
$
|
(905
|
)
|
|
$
|
—
|
|
For the three months ended June 30, 2016:
|
|
|
|
|
|
|
||||||||
Foreign currency swaps
|
|
Foreign-denominated fixed maturity securities
|
|
$
|
(3,755
|
)
|
|
$
|
3,755
|
|
|
$
|
—
|
|
For the six months ended June 30, 2017:
|
|
|
|
|
|
|
||||||||
Foreign currency swaps
|
|
Foreign-denominated fixed maturity securities
|
|
$
|
7,441
|
|
|
$
|
(7,441
|
)
|
|
$
|
—
|
|
For the six months ended June 30, 2016:
|
|
|
|
|
|
|
||||||||
Foreign currency swaps
|
|
Foreign-denominated fixed maturity securities
|
|
$
|
2,112
|
|
|
$
|
(2,112
|
)
|
|
$
|
—
|
|
|
|
Three months ended June 30,
|
||||||
|
|
2017
|
|
2016
|
||||
Balance beginning of period
|
|
$
|
7,690
|
|
|
$
|
(21,794
|
)
|
Gains (losses) deferred in other comprehensive income (loss) on the effective portion of cash flow hedges
|
|
(6,417
|
)
|
|
(20,350
|
)
|
||
Amounts reclassified to investment related (gains) losses, net
|
|
41
|
|
|
1,010
|
|
||
Amounts reclassified to investment income
|
|
(183
|
)
|
|
(58
|
)
|
||
Balance end of period
|
|
$
|
1,131
|
|
|
$
|
(41,192
|
)
|
|
|
|
|
|
||||
|
|
Six months ended June 30,
|
||||||
|
|
2017
|
|
2016
|
||||
Balance beginning of period
|
|
$
|
(2,496
|
)
|
|
$
|
(29,397
|
)
|
Gains (losses) deferred in other comprehensive income (loss) on the effective portion of cash flow hedges
|
|
4,016
|
|
|
(11,799
|
)
|
||
Amounts reclassified to investment related (gains) losses, net
|
|
41
|
|
|
169
|
|
||
Amounts reclassified to investment income
|
|
(430
|
)
|
|
(165
|
)
|
||
Balance end of period
|
|
$
|
1,131
|
|
|
$
|
(41,192
|
)
|
|
|
Effective Portion
|
||||||||||
Derivative Type
|
|
Gain (Loss) Deferred in OCI
|
|
Gain (Loss) Reclassified into Income from OCI
|
||||||||
|
|
|
|
Investment Related Gains (Losses)
|
|
Investment Income
|
||||||
For the three months ended June 30, 2017:
|
||||||||||||
Interest rate
|
|
$
|
(7,643
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
Currency/Interest rate
|
|
1,226
|
|
|
—
|
|
|
132
|
|
|||
Forward bond purchase commitments
|
|
—
|
|
|
(41
|
)
|
|
51
|
|
|||
Total
|
|
$
|
(6,417
|
)
|
|
$
|
(41
|
)
|
|
$
|
183
|
|
For the three months ended June 30, 2016:
|
|
|
|
|
|
|
||||||
Interest rate
|
|
$
|
(17,464
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
Currency/Interest rate
|
|
(2,886
|
)
|
|
—
|
|
|
93
|
|
|||
Forward bond purchase commitments
|
|
—
|
|
|
(1,010
|
)
|
|
(35
|
)
|
|||
Total
|
|
$
|
(20,350
|
)
|
|
$
|
(1,010
|
)
|
|
$
|
58
|
|
|
|
|
|
|
|
|
||||||
For the six months ended June 30, 2017:
|
|
|
|
|
|
|
||||||
Interest rate
|
|
$
|
(5,427
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
Currency/Interest rate
|
|
9,443
|
|
|
—
|
|
|
329
|
|
|||
Forward bond purchase commitments
|
|
—
|
|
|
(41
|
)
|
|
101
|
|
|||
Total
|
|
$
|
4,016
|
|
|
$
|
(41
|
)
|
|
$
|
430
|
|
For the six months ended June 30, 2016:
|
|
|
|
|
|
|
||||||
Interest rate
|
|
$
|
(12,335
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
Currency/Interest rate
|
|
536
|
|
|
—
|
|
|
253
|
|
|||
Forward bond purchase commitments
|
|
—
|
|
|
(169
|
)
|
|
(88
|
)
|
|||
Total
|
|
$
|
(11,799
|
)
|
|
$
|
(169
|
)
|
|
$
|
165
|
|
|
|
Derivative Gains (Losses) Deferred in AOCI
|
||||||||||||||
|
|
For the three months ended June 30,
|
|
For the six months ended June 30,
|
||||||||||||
Type of NIFO Hedge
(1) (2)
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Foreign currency swaps
|
|
$
|
(17,919
|
)
|
|
$
|
302
|
|
|
$
|
(25,525
|
)
|
|
$
|
(31,493
|
)
|
Foreign currency forwards
|
|
4,158
|
|
|
—
|
|
|
4,158
|
|
|
—
|
|
||||
Total
|
|
$
|
(13,761
|
)
|
|
$
|
302
|
|
|
$
|
(21,367
|
)
|
|
$
|
(31,493
|
)
|
(1)
|
There were no sales or substantial liquidations of net investments in foreign operations that would have required the reclassification of gains or losses from accumulated other comprehensive income (loss) into investment income during the periods presented.
|
(2)
|
There was no ineffectiveness recognized for the Company’s hedges of net investments in foreign operations.
|
|
|
|
|
Gain (Loss) for the three months ended June 30,
|
||||||
Type of Non-hedging Derivative
|
|
Income Statement Location of Gain (Loss)
|
|
2017
|
|
2016
|
||||
Interest rate swaps
|
|
Investment related gains (losses), net
|
|
$
|
14,289
|
|
|
$
|
41,500
|
|
Financial futures
|
|
Investment related gains (losses), net
|
|
(6,442
|
)
|
|
(7,557
|
)
|
||
Foreign currency forwards
|
|
Investment related gains (losses), net
|
|
(351
|
)
|
|
3,577
|
|
||
CPI swaps
|
|
Investment related gains (losses), net
|
|
(4
|
)
|
|
(520
|
)
|
||
Credit default swaps
|
|
Investment related gains (losses), net
|
|
3,879
|
|
|
3,518
|
|
||
Equity options
|
|
Investment related gains (losses), net
|
|
(9,273
|
)
|
|
(3,225
|
)
|
||
Longevity swaps
|
|
Other revenues
|
|
1,981
|
|
|
2,394
|
|
||
Mortality swaps
|
|
Other revenues
|
|
(395
|
)
|
|
1,046
|
|
||
Subtotal
|
|
|
|
3,684
|
|
|
40,733
|
|
||
Embedded derivatives in:
|
|
|
|
|
|
|
||||
Modified coinsurance or funds withheld arrangements
|
|
Investment related gains (losses), net
|
|
15,108
|
|
|
76,966
|
|
||
Indexed annuity products
|
|
Interest credited
|
|
(5,955
|
)
|
|
(2,019
|
)
|
||
Variable annuity products
|
|
Investment related gains (losses), net
|
|
360
|
|
|
(28,137
|
)
|
||
Total non-hedging derivatives
|
|
|
|
$
|
13,197
|
|
|
$
|
87,543
|
|
|
|
|
|
|
|
|
||||
|
|
|
|
Gain (Loss) for the six months ended
June 30,
|
||||||
Type of Non-hedging Derivative
|
|
Income Statement Location of Gain (Loss)
|
|
2017
|
|
2016
|
||||
Interest rate swaps
|
|
Investment related gains (losses), net
|
|
$
|
11,677
|
|
|
$
|
104,027
|
|
Financial futures
|
|
Investment related gains (losses), net
|
|
(19,217
|
)
|
|
(18,608
|
)
|
||
Foreign currency forwards
|
|
Investment related gains (losses), net
|
|
553
|
|
|
6,077
|
|
||
CPI swaps
|
|
Investment related gains (losses), net
|
|
(9
|
)
|
|
(700
|
)
|
||
Credit default swaps
|
|
Investment related gains (losses), net
|
|
11,237
|
|
|
6,864
|
|
||
Equity options
|
|
Investment related gains (losses), net
|
|
(26,462
|
)
|
|
(5,928
|
)
|
||
Longevity swaps
|
|
Other revenues
|
|
3,847
|
|
|
2,481
|
|
||
Mortality swaps
|
|
Other revenues
|
|
(790
|
)
|
|
622
|
|
||
Subtotal
|
|
|
|
(19,164
|
)
|
|
94,835
|
|
||
Embedded derivatives in:
|
|
|
|
|
|
|
||||
Modified coinsurance or funds withheld arrangements
|
|
Investment related gains (losses), net
|
|
83,810
|
|
|
(15,283
|
)
|
||
Indexed annuity products
|
|
Interest credited
|
|
(22,357
|
)
|
|
(626
|
)
|
||
Variable annuity products
|
|
Investment related gains (losses), net
|
|
22,723
|
|
|
(91,077
|
)
|
||
Total non-hedging derivatives
|
|
|
|
$
|
65,012
|
|
|
$
|
(12,151
|
)
|
|
|
June 30, 2017
|
|
December 31, 2016
|
||||||||||||||||
Rating Agency Designation of Referenced Credit Obligations
(1)
|
|
Estimated Fair
Value of Credit
Default Swaps
|
|
Maximum
Amount of Future
Payments under
Credit Default
Swaps
(2)
|
|
Weighted
Average
Years to
Maturity
(3)
|
|
Estimated Fair
Value of Credit
Default Swaps
|
|
Maximum
Amount of Future
Payments under
Credit Default
Swaps
(2)
|
|
Weighted
Average
Years to
Maturity
(3)
|
||||||||
AAA/AA+/AA/AA-/A+/A/A-
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Single name credit default swaps
|
|
$
|
2,857
|
|
|
$
|
155,500
|
|
|
3.5
|
|
$
|
1,726
|
|
|
$
|
150,500
|
|
|
3.8
|
Subtotal
|
|
2,857
|
|
|
155,500
|
|
|
3.5
|
|
1,726
|
|
|
150,500
|
|
|
3.8
|
||||
BBB+/BBB/BBB-
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Single name credit default swaps
|
|
3,351
|
|
|
365,200
|
|
|
3.3
|
|
1,426
|
|
|
347,200
|
|
|
3.7
|
||||
Credit default swaps referencing indices
|
|
82
|
|
|
416,000
|
|
|
4.5
|
|
6,295
|
|
|
416,000
|
|
|
5.0
|
||||
Subtotal
|
|
3,433
|
|
|
781,200
|
|
|
3.9
|
|
7,721
|
|
|
763,200
|
|
|
4.4
|
||||
BB+/BB/BB-
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Single name credit default swaps
|
|
1
|
|
|
5,000
|
|
|
2.0
|
|
(477
|
)
|
|
9,000
|
|
|
3.5
|
||||
Subtotal
|
|
1
|
|
|
5,000
|
|
|
2.0
|
|
(477
|
)
|
|
9,000
|
|
|
3.5
|
||||
Total
|
|
$
|
6,291
|
|
|
$
|
941,700
|
|
|
3.8
|
|
$
|
8,970
|
|
|
$
|
922,700
|
|
|
4.3
|
(1)
|
The rating agency designations are based on ratings from Standard and Poor’s (“S&P”).
|
(2)
|
Assumes the value of the referenced credit obligations is zero.
|
(3)
|
The weighted average years to maturity of the credit default swaps is calculated based on weighted average notional amounts.
|
|
Three months ended June 30,
|
|
Six months ended June 30,
|
||||||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Embedded derivatives in modco or funds withheld arrangements included in investment related gains
|
$
|
15,108
|
|
|
$
|
76,966
|
|
|
$
|
83,810
|
|
|
$
|
(15,283
|
)
|
After the associated amortization of DAC and taxes, the related amounts included in net income
|
2,941
|
|
|
18,807
|
|
|
28,785
|
|
|
(7,970
|
)
|
||||
Embedded derivatives in variable annuity contracts included in investment related gains
|
360
|
|
|
(28,137
|
)
|
|
22,723
|
|
|
(91,077
|
)
|
||||
After the associated amortization of DAC and taxes, the related amounts included in net income
|
3,023
|
|
|
(40,167
|
)
|
|
31,859
|
|
|
(66,010
|
)
|
||||
Amounts related to embedded derivatives in equity-indexed annuities included in benefits and expenses
|
(5,955
|
)
|
|
(2,019
|
)
|
|
(22,357
|
)
|
|
(626
|
)
|
||||
After the associated amortization of DAC and taxes, the related amounts included in net income
|
(6,925
|
)
|
|
(7,816
|
)
|
|
(28,322
|
)
|
|
3,418
|
|
|
|
June 30, 2017
|
|
December 31, 2016
|
||||
Estimated fair value of derivatives in net asset position
|
|
$
|
181,124
|
|
|
$
|
236,985
|
|
Cash provided as collateral
(1)
|
|
7,461
|
|
|
1,441
|
|
||
Securities pledged to counterparties as collateral
(2)
|
|
59,540
|
|
|
95,863
|
|
||
Cash pledged from counterparties as collateral
(3)
|
|
(183,179
|
)
|
|
(254,498
|
)
|
||
Securities pledged from counterparties as collateral
(4)
|
|
(17,847
|
)
|
|
(16,913
|
)
|
||
Initial margin for cleared derivatives
(2)
|
|
(58,526
|
)
|
|
(73,571
|
)
|
||
Net amount after application of master netting agreements and collateral
|
|
$
|
(11,427
|
)
|
|
$
|
(10,693
|
)
|
Margin account related to exchange-traded futures
(5)
|
|
$
|
8,530
|
|
|
$
|
9,687
|
|
(1)
|
Consists of receivable from counterparty, included in other assets.
|
(2)
|
Included in available-for-sale securities, primarily consists of U.S. Treasury and government agency securities.
|
(3)
|
Included in cash and cash equivalents, with obligation to return cash collateral recorded in other liabilities.
|
(4)
|
Consists of U.S. Treasury and government securities.
|
(5)
|
Included in other assets.
|
June 30, 2017:
|
|
|
|
Fair Value Measurements Using:
|
||||||||||||
|
|
Total
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
||||||||
Assets:
|
|
|
|
|
|
|
|
|
||||||||
Fixed maturity securities – available-for-sale:
|
|
|
|
|
|
|
|
|
||||||||
Corporate securities
|
|
$
|
22,341,661
|
|
|
$
|
603,002
|
|
|
$
|
20,447,605
|
|
|
$
|
1,291,054
|
|
Canadian and Canadian provincial governments
|
|
4,007,754
|
|
|
—
|
|
|
3,474,484
|
|
|
533,270
|
|
||||
Residential mortgage-backed securities
|
|
1,539,299
|
|
|
—
|
|
|
1,390,614
|
|
|
148,685
|
|
||||
Asset-backed securities
|
|
1,641,841
|
|
|
—
|
|
|
1,440,252
|
|
|
201,589
|
|
||||
Commercial mortgage-backed securities
|
|
1,582,028
|
|
|
—
|
|
|
1,580,085
|
|
|
1,943
|
|
||||
U.S. government and agencies
|
|
1,721,564
|
|
|
1,597,777
|
|
|
100,220
|
|
|
23,567
|
|
||||
State and political subdivisions
|
|
638,970
|
|
|
—
|
|
|
604,536
|
|
|
34,434
|
|
||||
Other foreign government supranational and foreign government-sponsored enterprises
|
|
2,872,309
|
|
|
326,033
|
|
|
2,534,282
|
|
|
11,994
|
|
||||
Total fixed maturity securities – available-for-sale
|
|
36,345,426
|
|
|
2,526,812
|
|
|
31,572,078
|
|
|
2,246,536
|
|
||||
Funds withheld at interest – embedded derivatives
|
|
61,281
|
|
|
—
|
|
|
—
|
|
|
61,281
|
|
||||
Cash equivalents
|
|
300,516
|
|
|
300,516
|
|
|
—
|
|
|
—
|
|
||||
Short-term investments
|
|
91,024
|
|
|
21,586
|
|
|
65,890
|
|
|
3,548
|
|
||||
Other invested assets:
|
|
|
|
|
|
|
|
|
||||||||
Non-redeemable preferred stock
|
|
31,959
|
|
|
31,959
|
|
|
—
|
|
|
—
|
|
||||
Other equity securities
|
|
72,318
|
|
|
72,318
|
|
|
—
|
|
|
—
|
|
||||
Derivatives:
|
|
|
|
|
|
|
|
|
||||||||
Interest rate swaps
|
|
55,154
|
|
|
—
|
|
|
55,154
|
|
|
—
|
|
||||
CPI swaps
|
|
(187
|
)
|
|
—
|
|
|
(187
|
)
|
|
—
|
|
||||
Credit default swaps
|
|
6,258
|
|
|
—
|
|
|
6,258
|
|
|
—
|
|
||||
Equity options
|
|
15,804
|
|
|
—
|
|
|
15,804
|
|
|
—
|
|
||||
Foreign currency swaps
|
|
81,019
|
|
|
—
|
|
|
81,019
|
|
|
—
|
|
||||
FVO contractholder-directed unit-linked investments
|
|
204,630
|
|
|
203,150
|
|
|
1,480
|
|
|
—
|
|
||||
Other
|
|
7,047
|
|
|
7,047
|
|
|
—
|
|
|
—
|
|
||||
Total other invested assets
|
|
474,002
|
|
|
314,474
|
|
|
159,528
|
|
|
—
|
|
||||
Other assets - longevity swaps
|
|
33,349
|
|
|
—
|
|
|
—
|
|
|
33,349
|
|
||||
Total
|
|
$
|
37,305,598
|
|
|
$
|
3,163,388
|
|
|
$
|
31,797,496
|
|
|
$
|
2,344,714
|
|
Liabilities:
|
|
|
|
|
|
|
|
|
||||||||
Interest sensitive contract liabilities – embedded derivatives
|
|
$
|
974,631
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
974,631
|
|
Other liabilities:
|
|
|
|
|
|
|
|
|
||||||||
Derivatives:
|
|
|
|
|
|
|
|
|
||||||||
Interest rate swaps
|
|
17,012
|
|
|
—
|
|
|
17,012
|
|
|
—
|
|
||||
Foreign currency forwards
|
|
4,200
|
|
|
—
|
|
|
4,200
|
|
|
—
|
|
||||
Credit default swaps
|
|
(319
|
)
|
|
—
|
|
|
(319
|
)
|
|
—
|
|
||||
Equity options
|
|
(12,497
|
)
|
|
—
|
|
|
(12,497
|
)
|
|
—
|
|
||||
Foreign currency swaps
|
|
1,877
|
|
|
—
|
|
|
1,877
|
|
|
—
|
|
||||
Mortality swaps
|
|
1,552
|
|
|
—
|
|
|
—
|
|
|
1,552
|
|
||||
Total
|
|
$
|
986,456
|
|
|
$
|
—
|
|
|
$
|
10,273
|
|
|
$
|
976,183
|
|
December 31, 2016:
|
|
|
|
Fair Value Measurements Using:
|
||||||||||||
|
|
Total
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
||||||||
Assets:
|
|
|
|
|
|
|
|
|
||||||||
Fixed maturity securities – available-for-sale:
|
|
|
|
|
|
|
|
|
||||||||
Corporate securities
|
|
$
|
19,619,084
|
|
|
$
|
310,995
|
|
|
$
|
18,035,836
|
|
|
$
|
1,272,253
|
|
Canadian and Canadian provincial governments
|
|
3,644,046
|
|
|
—
|
|
|
3,168,081
|
|
|
475,965
|
|
||||
Residential mortgage-backed securities
|
|
1,278,576
|
|
|
—
|
|
|
1,118,285
|
|
|
160,291
|
|
||||
Asset-backed securities
|
|
1,429,344
|
|
|
—
|
|
|
1,210,064
|
|
|
219,280
|
|
||||
Commercial mortgage-backed securities
|
|
1,363,654
|
|
|
—
|
|
|
1,342,509
|
|
|
21,145
|
|
||||
U.S. government and agencies
|
|
1,468,302
|
|
|
1,345,755
|
|
|
98,059
|
|
|
24,488
|
|
||||
State and political subdivisions
|
|
591,796
|
|
|
—
|
|
|
550,130
|
|
|
41,666
|
|
||||
Other foreign government, supranational and foreign government-sponsored enterprises
|
|
2,698,823
|
|
|
276,729
|
|
|
2,409,225
|
|
|
12,869
|
|
||||
Total fixed maturity securities – available-for-sale
|
|
32,093,625
|
|
|
1,933,479
|
|
|
27,932,189
|
|
|
2,227,957
|
|
||||
Funds withheld at interest – embedded derivatives
|
|
(22,529
|
)
|
|
—
|
|
|
—
|
|
|
(22,529
|
)
|
||||
Cash equivalents
|
|
338,601
|
|
|
338,601
|
|
|
—
|
|
|
—
|
|
||||
Short-term investments
|
|
44,241
|
|
|
8,276
|
|
|
32,619
|
|
|
3,346
|
|
||||
Other invested assets:
|
|
|
|
|
|
|
|
|
||||||||
Non-redeemable preferred stock
|
|
51,123
|
|
|
38,317
|
|
|
12,806
|
|
|
—
|
|
||||
Other equity securities
|
|
224,238
|
|
|
224,238
|
|
|
—
|
|
|
—
|
|
||||
Derivatives:
|
|
|
|
|
|
|
|
|
||||||||
Interest rate swaps
|
|
93,508
|
|
|
—
|
|
|
93,508
|
|
|
—
|
|
||||
Credit default swaps
|
|
9,136
|
|
|
—
|
|
|
9,136
|
|
|
—
|
|
||||
Equity options
|
|
26,070
|
|
|
—
|
|
|
26,070
|
|
|
—
|
|
||||
Foreign currency swaps
|
|
100,394
|
|
|
—
|
|
|
100,394
|
|
|
—
|
|
||||
FVO contractholder-directed unit-linked investments
|
|
190,120
|
|
|
188,891
|
|
|
1,229
|
|
|
—
|
|
||||
Other
|
|
11,036
|
|
|
11,036
|
|
|
—
|
|
|
—
|
|
||||
Total other invested assets
|
|
705,625
|
|
|
462,482
|
|
|
243,143
|
|
|
—
|
|
||||
Other assets - longevity swaps
|
|
26,958
|
|
|
—
|
|
|
—
|
|
|
26,958
|
|
||||
Total
|
|
$
|
33,186,521
|
|
|
$
|
2,742,838
|
|
|
$
|
28,207,951
|
|
|
$
|
2,235,732
|
|
Liabilities:
|
|
|
|
|
|
|
|
|
||||||||
Interest sensitive contract liabilities – embedded derivatives
|
|
$
|
990,308
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
990,308
|
|
Other liabilities:
|
|
|
|
|
|
|
|
|
||||||||
Derivatives:
|
|
|
|
|
|
|
|
|
||||||||
Interest rate swaps
|
|
24,374
|
|
|
—
|
|
|
24,374
|
|
|
—
|
|
||||
Foreign currency forwards
|
|
5,070
|
|
|
—
|
|
|
5,070
|
|
|
—
|
|
||||
CPI swaps
|
|
262
|
|
|
—
|
|
|
262
|
|
|
—
|
|
||||
Credit default swaps
|
|
(5
|
)
|
|
—
|
|
|
(5
|
)
|
|
—
|
|
||||
Equity options
|
|
(7,389
|
)
|
|
—
|
|
|
(7,389
|
)
|
|
—
|
|
||||
Foreign currency swaps
|
|
(3,231
|
)
|
|
—
|
|
|
(3,231
|
)
|
|
—
|
|
||||
Mortality swaps
|
|
2,462
|
|
|
—
|
|
|
—
|
|
|
2,462
|
|
||||
Total
|
|
$
|
1,011,851
|
|
|
$
|
—
|
|
|
$
|
19,081
|
|
|
$
|
992,770
|
|
|
Estimated Fair Value
|
|
Valuation Technique
|
|
Unobservable Inputs
|
|
Range (Weighted Average)
|
||||||||||
June 30, 2017
|
|
December 31, 2016
|
|
|
|
June 30, 2017
|
|
December 31, 2016
|
|||||||||
Assets:
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Corporate securities
|
$
|
158,309
|
|
|
$
|
167,815
|
|
|
Market comparable securities
|
|
Liquidity premium
|
|
0-2% (1%)
|
|
|
0-2% (1%)
|
|
U.S. government and agencies
|
23,567
|
|
|
24,488
|
|
|
Market comparable securities
|
|
Liquidity premium
|
|
0-1% (1%)
|
|
|
0-1% (1%)
|
|
||
State and political subdivisions
|
4,607
|
|
|
4,670
|
|
|
Market comparable securities
|
|
Liquidity premium
|
|
1
|
%
|
|
1
|
%
|
||
Funds withheld at interest- embedded derivatives
|
61,281
|
|
|
(22,529
|
)
|
|
Total return swap
|
|
Mortality
|
|
0-100% (2%)
|
|
|
0-100% (2%)
|
|
||
|
|
|
|
|
|
|
Lapse
|
|
0-35% (9%)
|
|
|
0-35% (8%)
|
|
||||
|
|
|
|
|
|
|
Withdrawal
|
|
0-5% (3%)
|
|
|
0-5% (3%)
|
|
||||
|
|
|
|
|
|
|
CVA
|
|
0-5% (1%)
|
|
|
0-5% (1%)
|
|
||||
|
|
|
|
|
|
|
Crediting rate
|
|
2-4% (2%)
|
|
|
2-4% (2%)
|
|
||||
Longevity swaps
|
33,349
|
|
|
26,958
|
|
|
Discounted cash flow
|
|
Mortality
|
|
0-100% (2%)
|
|
|
0-100% (2%)
|
|
||
|
|
|
|
|
|
|
Mortality improvement
|
|
(10%)-10% (3%)
|
|
|
(10%)-10% (3%)
|
|
||||
Liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Interest sensitive contract liabilities- embedded derivatives- indexed annuities
|
812,718
|
|
|
805,672
|
|
|
Discounted cash flow
|
|
Mortality
|
|
0-100% (2%)
|
|
|
0-100% (2%)
|
|
||
|
|
|
|
|
|
|
Lapse
|
|
0-35% (9%)
|
|
|
0-35% (8%)
|
|
||||
|
|
|
|
|
|
|
Withdrawal
|
|
0-5% (3%)
|
|
|
0-5% (3%)
|
|
||||
|
|
|
|
|
|
|
Option budget projection
|
|
2-4% (2%)
|
|
|
2-4% (2%)
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Interest sensitive contract liabilities- embedded derivatives- variable annuities
|
161,913
|
|
|
184,636
|
|
|
Discounted cash
flow
|
|
Mortality
|
|
0-100% (2%)
|
|
|
0-100% (2%)
|
|
||
|
|
|
|
|
|
|
Lapse
|
|
0-25% (6%)
|
|
|
0-25% (6%)
|
|
||||
|
|
|
|
|
|
|
Withdrawal
|
|
0-7% (3%)
|
|
|
0-7% (3%)
|
|
||||
|
|
|
|
|
|
|
CVA
|
|
0-5% (1%)
|
|
|
0-5% (1%)
|
|
||||
|
|
|
|
|
|
|
Long-term volatility
|
|
0-27% (9%)
|
|
|
0-27% (14%)
|
|
||||
Mortality swaps
|
1,552
|
|
|
2,462
|
|
|
Discounted cash flow
|
|
Mortality
|
|
0-100% (1%)
|
|
|
0-100% (1%)
|
|
|
|
2017
|
||||||
|
|
Transfers from
Level 1 to
Level 2
|
|
Transfers from
Level 2 to
Level 1
|
||||
Three months ended June 30:
|
|
|
|
|
||||
Fixed maturity securities - available-for-sale:
|
|
|
|
|
||||
Corporate securities
|
|
$
|
—
|
|
|
$
|
49,999
|
|
|
|
|
|
|
||||
Six months ended June 30:
|
|
|
|
|
||||
Fixed maturity securities - available-for-sale:
|
|
|
|
|
||||
Corporate securities
|
|
$
|
—
|
|
|
$
|
88,674
|
|
For the three months ended June 30, 2017:
|
|
Fixed maturity securities - available-for-sale
|
||||||||||||||
|
|
Corporate
securities
|
|
Canadian and Canadian provincial governments
|
|
Residential
mortgage-
backed
securities
|
|
Asset-backed
securities
|
||||||||
Fair value, beginning of period
|
|
$
|
1,263,925
|
|
|
$
|
483,560
|
|
|
$
|
143,430
|
|
|
$
|
208,436
|
|
Total gains/losses (realized/unrealized)
|
|
|
|
|
|
|
|
|
||||||||
Included in earnings, net:
|
|
|
|
|
|
|
|
|
||||||||
Investment income, net of related expenses
|
|
(396
|
)
|
|
3,201
|
|
|
(29
|
)
|
|
511
|
|
||||
Investment related gains (losses), net
|
|
8,427
|
|
|
—
|
|
|
115
|
|
|
—
|
|
||||
Included in other comprehensive income
|
|
(4,548
|
)
|
|
46,509
|
|
|
1,962
|
|
|
1,136
|
|
||||
Purchases
(1)
|
|
104,087
|
|
|
—
|
|
|
29,318
|
|
|
34,366
|
|
||||
Sales
(1)
|
|
(23,174
|
)
|
|
—
|
|
|
(4,467
|
)
|
|
—
|
|
||||
Settlements
(1)
|
|
(74,531
|
)
|
|
—
|
|
|
(4,655
|
)
|
|
(27,569
|
)
|
||||
Transfers into Level 3
|
|
17,264
|
|
|
—
|
|
|
5,423
|
|
|
3,500
|
|
||||
Transfers out of Level 3
|
|
—
|
|
|
—
|
|
|
(22,412
|
)
|
|
(18,791
|
)
|
||||
Fair value, end of period
|
|
$
|
1,291,054
|
|
|
$
|
533,270
|
|
|
$
|
148,685
|
|
|
$
|
201,589
|
|
Unrealized gains and losses recorded in earnings for the period relating to those Level 3 assets and liabilities that were still held at the end of the period
|
|
|
|
|
|
|
|
|
||||||||
Included in earnings, net:
|
|
|
|
|
|
|
|
|
||||||||
Investment income, net of related expenses
|
|
$
|
(396
|
)
|
|
$
|
3,201
|
|
|
$
|
(37
|
)
|
|
$
|
239
|
|
Investment related gains (losses), net
|
|
(1,495
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
For the three months ended June 30, 2017 (continued):
|
|
Fixed maturity securities available-for-sale
|
||||||||||||||
|
|
Commercial
mortgage- backed securities |
|
U.S. government
and agencies |
|
State
and political subdivisions |
|
Other foreign government, supranational and foreign government-sponsored enterprises
|
||||||||
Fair value, beginning of period
|
|
$
|
1,923
|
|
|
$
|
23,474
|
|
|
$
|
33,858
|
|
|
$
|
12,344
|
|
Total gains/losses (realized/unrealized)
|
|
|
|
|
|
|
|
|
||||||||
Included in earnings, net:
|
|
|
|
|
|
|
|
|
||||||||
Investment income, net of related expenses
|
|
—
|
|
|
(115
|
)
|
|
(6
|
)
|
|
—
|
|
||||
Included in other comprehensive income
|
|
21
|
|
|
211
|
|
|
823
|
|
|
(12
|
)
|
||||
Purchases
(1)
|
|
—
|
|
|
132
|
|
|
—
|
|
|
—
|
|
||||
Settlements
(1)
|
|
(1
|
)
|
|
(135
|
)
|
|
(241
|
)
|
|
(338
|
)
|
||||
Fair value, end of period
|
|
$
|
1,943
|
|
|
$
|
23,567
|
|
|
$
|
34,434
|
|
|
$
|
11,994
|
|
Unrealized gains and losses recorded in earnings for the period relating to those Level 3 assets and liabilities that were still held at the end of the period
|
|
|
|
|
|
|
|
|
||||||||
Included in earnings, net:
|
|
|
|
|
|
|
|
|
||||||||
Investment income, net of related expenses
|
|
$
|
—
|
|
|
$
|
(115
|
)
|
|
$
|
(6
|
)
|
|
$
|
—
|
|
For the three months ended June 30, 2017 (continued):
|
|
Short-term Investments
|
|
Funds withheld
at interest-
embedded
derivatives
|
|
Other assets - longevity swaps
|
|
Interest sensitive contract liabilities embedded derivatives
|
|
Other liabilities - mortality swaps
|
||||||||||
Fair value, beginning of period
|
|
$
|
3,276
|
|
|
$
|
46,173
|
|
|
$
|
29,170
|
|
|
$
|
(972,930
|
)
|
|
$
|
(2,857
|
)
|
Total gains/losses (realized/unrealized)
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Included in earnings, net:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Investment related gains (losses), net
|
|
—
|
|
|
15,108
|
|
|
—
|
|
|
360
|
|
|
—
|
|
|||||
Interest credited
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(5,955
|
)
|
|
—
|
|
|||||
Included in other comprehensive income
|
|
(29
|
)
|
|
—
|
|
|
2,198
|
|
|
—
|
|
|
—
|
|
|||||
Other revenues
|
|
—
|
|
|
—
|
|
|
1,981
|
|
|
—
|
|
|
(395
|
)
|
|||||
Purchases
(1)
|
|
324
|
|
|
—
|
|
|
—
|
|
|
(19,533
|
)
|
|
—
|
|
|||||
Settlements
(1)
|
|
(23
|
)
|
|
—
|
|
|
—
|
|
|
23,427
|
|
|
1,700
|
|
|||||
Fair value, end of period
|
|
$
|
3,548
|
|
|
$
|
61,281
|
|
|
$
|
33,349
|
|
|
$
|
(974,631
|
)
|
|
$
|
(1,552
|
)
|
Unrealized gains and losses recorded in earnings for the period relating to those Level 3 assets and liabilities that were still held at the end of the period
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Included in earnings, net:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Investment related gains (losses), net
|
|
—
|
|
|
15,108
|
|
|
—
|
|
|
(1,794
|
)
|
|
—
|
|
|||||
Other revenues
|
|
—
|
|
|
—
|
|
|
1,981
|
|
|
—
|
|
|
(395
|
)
|
|||||
Interest credited
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(29,382
|
)
|
|
—
|
|
For the six months ended June 30, 2017:
|
|
Fixed maturity securities - available-for-sale
|
||||||||||||||
|
|
Corporate
securities
|
|
Canadian and Canadian provincial governments
|
|
Residential
mortgage-
backed
securities
|
|
Asset-backed
securities
|
||||||||
Fair value, beginning of period
|
|
$
|
1,272,253
|
|
|
$
|
475,965
|
|
|
$
|
160,291
|
|
|
$
|
219,280
|
|
Total gains/losses (realized/unrealized)
|
|
|
|
|
|
|
|
|
||||||||
Included in earnings, net:
|
|
|
|
|
|
|
|
|
||||||||
Investment income, net of related expenses
|
|
(819
|
)
|
|
6,271
|
|
|
(274
|
)
|
|
1,529
|
|
||||
Investment related gains (losses), net
|
|
7,196
|
|
|
—
|
|
|
480
|
|
|
—
|
|
||||
Interest credited
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Included in other comprehensive income
|
|
400
|
|
|
51,034
|
|
|
2,612
|
|
|
6,903
|
|
||||
Purchases
(1)
|
|
150,001
|
|
|
—
|
|
|
45,817
|
|
|
45,215
|
|
||||
Sales
(1)
|
|
(23,174
|
)
|
|
—
|
|
|
(15,071
|
)
|
|
—
|
|
||||
Settlements
(1)
|
|
(146,001
|
)
|
|
—
|
|
|
(11,439
|
)
|
|
(45,723
|
)
|
||||
Transfers into Level 3
|
|
31,198
|
|
|
—
|
|
|
5,500
|
|
|
38,758
|
|
||||
Transfers out of Level 3
|
|
—
|
|
|
—
|
|
|
(39,231
|
)
|
|
(64,373
|
)
|
||||
Fair value, end of period
|
|
$
|
1,291,054
|
|
|
$
|
533,270
|
|
|
$
|
148,685
|
|
|
$
|
201,589
|
|
Unrealized gains and losses recorded in earnings for the period relating to those Level 3 assets and liabilities that were still held at the end of the period
|
|
|
|
|
|
|
|
|
||||||||
Included in earnings, net:
|
|
|
|
|
|
|
|
|
||||||||
Investment income, net of related expenses
|
|
$
|
(819
|
)
|
|
$
|
6,271
|
|
|
$
|
(128
|
)
|
|
$
|
400
|
|
Investment related gains (losses), net
|
|
(2,788
|
)
|
|
—
|
|
|
(346
|
)
|
|
—
|
|
For the six months ended June 30, 2017 (continued):
|
|
Fixed maturity securities available-for-sale
|
||||||||||||||
|
|
Commercial
mortgage- backed securities |
|
U.S. government
and agencies |
|
State
and political subdivisions |
|
Other foreign government, supranational and foreign government-sponsored enterprises
|
||||||||
Fair value, beginning of period
|
|
$
|
21,145
|
|
|
$
|
24,488
|
|
|
$
|
41,666
|
|
|
$
|
12,869
|
|
Total gains/losses (realized/unrealized)
|
|
|
|
|
|
|
|
|
||||||||
Included in earnings, net:
|
|
|
|
|
|
|
|
|
||||||||
Investment income, net of related expenses
|
|
709
|
|
|
(232
|
)
|
|
(94
|
)
|
|
—
|
|
||||
Investment related gains (losses), net
|
|
(595
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Included in other comprehensive income
|
|
(62
|
)
|
|
263
|
|
|
(20
|
)
|
|
(203
|
)
|
||||
Other revenues
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Purchases
(1)
|
|
—
|
|
|
236
|
|
|
—
|
|
|
—
|
|
||||
Sales
(1)
|
|
(3,720
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Settlements
(1)
|
|
(5,402
|
)
|
|
(1,188
|
)
|
|
(274
|
)
|
|
(672
|
)
|
||||
Transfers out of Level 3
|
|
(10,132
|
)
|
|
—
|
|
|
(6,844
|
)
|
|
—
|
|
||||
Fair value, end of period
|
|
$
|
1,943
|
|
|
$
|
23,567
|
|
|
$
|
34,434
|
|
|
$
|
11,994
|
|
Unrealized gains and losses recorded in earnings for the period relating to those Level 3 assets and liabilities that were still held at the end of the period
|
|
|
|
|
|
|
|
|
||||||||
Included in earnings, net:
|
|
|
|
|
|
|
|
|
||||||||
Investment income, net of related expenses
|
|
$
|
—
|
|
|
$
|
(232
|
)
|
|
$
|
(94
|
)
|
|
$
|
—
|
|
For the six months ended June 30, 2017 (continued):
|
|
Short-term Investments
|
|
Funds withheld
at interest-
embedded
derivatives
|
|
Other assets - longevity swaps
|
|
Interest sensitive contract liabilities embedded derivatives
|
|
Other liabilities - mortality swaps
|
||||||||||
Fair value, beginning of period
|
|
$
|
3,346
|
|
|
$
|
(22,529
|
)
|
|
$
|
26,958
|
|
|
$
|
(990,308
|
)
|
|
$
|
(2,462
|
)
|
Total gains/losses (realized/unrealized)
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Included in earnings, net:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Investment related gains (losses), net
|
|
—
|
|
|
83,810
|
|
|
—
|
|
|
22,723
|
|
|
—
|
|
|||||
Interest credited
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(22,357
|
)
|
|
—
|
|
|||||
Included in other comprehensive income
|
|
4
|
|
|
—
|
|
|
2,545
|
|
|
—
|
|
|
—
|
|
|||||
Other revenues
|
|
—
|
|
|
—
|
|
|
3,846
|
|
|
—
|
|
|
(790
|
)
|
|||||
Purchases
(1)
|
|
356
|
|
|
—
|
|
|
—
|
|
|
(25,927
|
)
|
|
—
|
|
|||||
Settlements
(1)
|
|
(158
|
)
|
|
—
|
|
|
—
|
|
|
41,238
|
|
|
1,700
|
|
|||||
Fair value, end of period
|
|
$
|
3,548
|
|
|
$
|
61,281
|
|
|
$
|
33,349
|
|
|
$
|
(974,631
|
)
|
|
$
|
(1,552
|
)
|
Unrealized gains and losses recorded in earnings for the period relating to those Level 3 assets and liabilities that were still held at the end of the period
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Included in earnings, net:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Investment related gains (losses), net
|
|
—
|
|
|
83,810
|
|
|
—
|
|
|
18,505
|
|
|
—
|
|
|||||
Other revenues
|
|
—
|
|
|
—
|
|
|
3,846
|
|
|
—
|
|
|
(790
|
)
|
|||||
Interest credited
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(63,596
|
)
|
|
—
|
|
(1)
|
The amount reported within purchases, sales and settlements is the purchase price (for purchases) and the sales/settlement proceeds (for sales and settlements) based upon the actual date purchased or sold/settled. Items purchased and sold/settled in the same period are excluded from the rollforward. The Company had no issuances during the period.
|
For the three months ended June 30, 2016:
|
|
Fixed maturity securities - available-for-sale
|
||||||||||||||||||||||
|
|
Corporate
securities
|
|
Canadian and Canadian provincial governments
|
|
Residential
mortgage-
backed
securities
|
|
Asset-backed
securities
|
|
Commercial
mortgage-
backed
securities
|
|
U.S. government
and agencies
|
||||||||||||
Fair value, beginning of period
|
|
$
|
1,243,660
|
|
|
$
|
487,383
|
|
|
$
|
333,253
|
|
|
$
|
285,220
|
|
|
$
|
63,574
|
|
|
$
|
25,880
|
|
Total gains/losses (realized/unrealized)
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Included in earnings, net:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Investment income, net of related expenses
|
|
(592
|
)
|
|
3,049
|
|
|
116
|
|
|
252
|
|
|
490
|
|
|
(122
|
)
|
||||||
Investment related gains (losses), net
|
|
12
|
|
|
—
|
|
|
(1,891
|
)
|
|
823
|
|
|
(2,669
|
)
|
|
—
|
|
||||||
Included in other comprehensive income
|
|
30,391
|
|
|
63,760
|
|
|
3,839
|
|
|
2,793
|
|
|
453
|
|
|
461
|
|
||||||
Other revenues
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Purchases
(1)
|
|
72,982
|
|
|
—
|
|
|
42,913
|
|
|
59,779
|
|
|
—
|
|
|
144
|
|
||||||
Sales
(1)
|
|
(901
|
)
|
|
—
|
|
|
(167,236
|
)
|
|
(30,181
|
)
|
|
(22,338
|
)
|
|
—
|
|
||||||
Settlements
(1)
|
|
(47,461
|
)
|
|
—
|
|
|
(13,464
|
)
|
|
(4,196
|
)
|
|
(68
|
)
|
|
(108
|
)
|
||||||
Transfers into Level 3
|
|
5,023
|
|
|
—
|
|
|
—
|
|
|
18,398
|
|
|
—
|
|
|
—
|
|
||||||
Transfers out of Level 3
|
|
(5,732
|
)
|
|
—
|
|
|
(31,551
|
)
|
|
(34,072
|
)
|
|
(1,507
|
)
|
|
—
|
|
||||||
Fair value, end of period
|
|
$
|
1,297,382
|
|
|
$
|
554,192
|
|
|
$
|
165,979
|
|
|
$
|
298,816
|
|
|
$
|
37,935
|
|
|
$
|
26,255
|
|
Unrealized gains and losses recorded in earnings for the period relating to those Level 3 assets and liabilities that were still held at the end of the period
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Included in earnings, net:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Investment income, net of related expenses
|
|
$
|
(608
|
)
|
|
$
|
3,049
|
|
|
$
|
530
|
|
|
$
|
187
|
|
|
$
|
485
|
|
|
$
|
(122
|
)
|
For the three months ended June 30, 2016 (continued):
|
|
Fixed maturity securities
available-for-sale
|
|
|
|
|
|
|
|
|
||||||||||||||
|
|
State
and political subdivisions |
|
Other foreign government, supranational and foreign government-sponsored enterprises
|
|
Funds withheld
at interest-
embedded
derivatives
|
|
Other assets - longevity swaps
|
|
Interest sensitive contract liabilities embedded derivatives
|
|
Other liabilities - mortality swaps
|
||||||||||||
Fair value, beginning of period
|
|
$
|
34,624
|
|
|
$
|
13,936
|
|
|
$
|
(168,948
|
)
|
|
$
|
15,806
|
|
|
$
|
(1,118,069
|
)
|
|
$
|
(3,043
|
)
|
Total gains/losses (realized/unrealized)
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Included in earnings, net:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Investment income, net of related expenses
|
|
12
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Investment related gains (losses), net
|
|
—
|
|
|
—
|
|
|
76,967
|
|
|
—
|
|
|
(28,137
|
)
|
|
—
|
|
||||||
Interest credited
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(2,019
|
)
|
|
—
|
|
||||||
Included in other comprehensive income
|
|
837
|
|
|
95
|
|
|
—
|
|
|
(419
|
)
|
|
—
|
|
|
—
|
|
||||||
Other revenues
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,394
|
|
|
—
|
|
|
1,046
|
|
||||||
Purchases
(1)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
4,703
|
|
|
—
|
|
||||||
Settlements
(1)
|
|
(227
|
)
|
|
(325
|
)
|
|
—
|
|
|
—
|
|
|
18,142
|
|
|
—
|
|
||||||
Fair value, end of period
|
|
$
|
35,246
|
|
|
$
|
13,706
|
|
|
$
|
(91,981
|
)
|
|
$
|
17,781
|
|
|
$
|
(1,125,380
|
)
|
|
$
|
(1,997
|
)
|
Unrealized gains and losses recorded in earnings for the period relating to those Level 3 assets and liabilities that were still held at the end of the period
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Included in earnings, net:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Investment income, net of related expenses
|
|
$
|
12
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Investment related gains (losses), net
|
|
—
|
|
|
—
|
|
|
76,967
|
|
|
—
|
|
|
(31,333
|
)
|
|
—
|
|
||||||
Other revenues
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,394
|
|
|
—
|
|
|
1,046
|
|
||||||
Interest credited
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(20,162
|
)
|
|
—
|
|
For the six months ended June 30, 2016:
|
|
Fixed maturity securities - available-for-sale
|
||||||||||||||||||||||
|
|
Corporate
securities
|
|
Canadian and Canadian provincial governments
|
|
Residential
mortgage-
backed
securities
|
|
Asset-backed
securities
|
|
Commercial
mortgage-
backed
securities
|
|
U.S. government
and agencies
|
||||||||||||
Fair value, beginning of period
|
|
$
|
1,226,970
|
|
|
$
|
416,076
|
|
|
$
|
330,649
|
|
|
$
|
303,836
|
|
|
$
|
68,563
|
|
|
$
|
26,265
|
|
Total gains/losses (realized/unrealized)
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Included in earnings, net:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Investment income, net of related expenses
|
|
(1,419
|
)
|
|
6,051
|
|
|
(371
|
)
|
|
426
|
|
|
1,133
|
|
|
(245
|
)
|
||||||
Investment related gains (losses), net
|
|
(21,856
|
)
|
|
—
|
|
|
(1,922
|
)
|
|
1,101
|
|
|
(3,289
|
)
|
|
—
|
|
||||||
Interest credited
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Included in other comprehensive income
|
|
56,073
|
|
|
132,065
|
|
|
(493
|
)
|
|
(7,734
|
)
|
|
(2,359
|
)
|
|
1,057
|
|
||||||
Purchases
(1)
|
|
140,578
|
|
|
—
|
|
|
72,228
|
|
|
97,050
|
|
|
1,545
|
|
|
257
|
|
||||||
Sales
(1)
|
|
(10,483
|
)
|
|
—
|
|
|
(167,684
|
)
|
|
(38,681
|
)
|
|
(25,976
|
)
|
|
—
|
|
||||||
Settlements
(1)
|
|
(96,955
|
)
|
|
—
|
|
|
(24,904
|
)
|
|
(7,921
|
)
|
|
(137
|
)
|
|
(1,079
|
)
|
||||||
Transfers into Level 3
|
|
10,206
|
|
|
—
|
|
|
—
|
|
|
24,796
|
|
|
—
|
|
|
—
|
|
||||||
Transfers out of Level 3
|
|
(5,732
|
)
|
|
—
|
|
|
(41,524
|
)
|
|
(74,057
|
)
|
|
(1,545
|
)
|
|
—
|
|
||||||
Fair value, end of period
|
|
$
|
1,297,382
|
|
|
$
|
554,192
|
|
|
$
|
165,979
|
|
|
$
|
298,816
|
|
|
$
|
37,935
|
|
|
$
|
26,255
|
|
Unrealized gains and losses recorded in earnings for the period relating to those Level 3 assets and liabilities that were still held at the end of the period
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Included in earnings, net:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Investment income, net of related expenses
|
|
$
|
(1,428
|
)
|
|
$
|
6,051
|
|
|
$
|
42
|
|
|
$
|
350
|
|
|
$
|
1,031
|
|
|
$
|
(245
|
)
|
Investment related gains (losses), net
|
|
(21,726
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
For the six months ended June 30, 2016 (continued):
|
|
Fixed maturity securities
available-for-sale
|
|
|
|
|
|
|
|
|
||||||||||||||
|
|
State
and political subdivisions |
|
Other foreign government, supranational and foreign government-sponsored enterprises
|
|
Funds withheld
at interest-
embedded
derivatives
|
|
Other assets - longevity swaps
|
|
Interest sensitive contract liabilities embedded derivatives
|
|
Other liabilities - mortality swaps
|
||||||||||||
Fair value, beginning of period
|
|
$
|
38,342
|
|
|
$
|
14,065
|
|
|
$
|
(76,698
|
)
|
|
$
|
14,996
|
|
|
$
|
(1,070,584
|
)
|
|
$
|
(2,619
|
)
|
Total gains/losses (realized/unrealized)
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Included in earnings, net:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Investment income, net of related expenses
|
|
195
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Investment related gains (losses), net
|
|
—
|
|
|
—
|
|
|
(15,283
|
)
|
|
—
|
|
|
(91,077
|
)
|
|
—
|
|
||||||
Interest credited
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(626
|
)
|
|
—
|
|
||||||
Included in other comprehensive income
|
|
1,171
|
|
|
288
|
|
|
—
|
|
|
304
|
|
|
—
|
|
|
—
|
|
||||||
Other revenues
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,481
|
|
|
—
|
|
|
622
|
|
||||||
Purchases
(1)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,035
|
|
|
—
|
|
||||||
Settlements
(1)
|
|
(258
|
)
|
|
(647
|
)
|
|
—
|
|
|
—
|
|
|
34,872
|
|
|
—
|
|
||||||
Transfers out of Level 3
|
|
(4,204
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Fair value, end of period
|
|
$
|
35,246
|
|
|
$
|
13,706
|
|
|
$
|
(91,981
|
)
|
|
$
|
17,781
|
|
|
$
|
(1,125,380
|
)
|
|
$
|
(1,997
|
)
|
Unrealized gains and losses recorded in earnings for the period relating to those Level 3 assets and liabilities that were still held at the end of the period
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Included in earnings, net:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Investment income, net of related expenses
|
|
$
|
195
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Investment related gains (losses), net
|
|
—
|
|
|
—
|
|
|
(15,283
|
)
|
|
—
|
|
|
(96,811
|
)
|
|
—
|
|
||||||
Other revenues
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,481
|
|
|
—
|
|
|
622
|
|
||||||
Interest credited
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(35,497
|
)
|
|
—
|
|
(1)
|
The amount reported within purchases, sales and settlements is the purchase price (for purchases) and the sales/settlement proceeds (for sales and settlements) based upon the actual date purchased or sold/settled. Items purchased and sold/settled in the same period are excluded from the rollforward. The Company had no issuances during the period.
|
|
|
Carrying Value After Measurement
|
|
Net Investment Gains (Losses)
|
||||||||||||||||||||
|
|
At June 30,
|
|
Three months ended June 30,
|
|
Six months ended June 30,
|
||||||||||||||||||
(dollars in thousands)
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||||||
Mortgage loans
(1)
|
|
$
|
—
|
|
|
$
|
6,993
|
|
|
$
|
—
|
|
|
$
|
(400
|
)
|
|
$
|
—
|
|
|
$
|
(702
|
)
|
Limited partnership interests
(2)
|
|
3,690
|
|
|
4,460
|
|
|
(6,308
|
)
|
|
(112
|
)
|
|
(6,308
|
)
|
|
(2,039
|
)
|
(1)
|
Estimated fair values for impaired mortgage loans are based on internal valuation models using unobservable inputs or, if the loans are in foreclosure or are otherwise determined to be collateral dependent, are based on external appraisals of the underlying collateral.
|
(2)
|
The impaired limited partnership interests presented above were accounted for using the cost method. Impairments on these cost method investments were recognized at estimated fair value determined using the net asset values of the Company’s ownership interest as provided in the financial statements of the investees. The market for these investments has limited activity and price transparency.
|
June 30, 2017:
|
|
Carrying Value
|
|
Estimated
Fair Value
|
|
Fair Value Measurement Using:
|
||||||||||||||||||
Level 1
|
|
Level 2
|
|
Level 3
|
|
NAV
|
||||||||||||||||||
Assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Mortgage loans on real estate
|
|
$
|
4,104,487
|
|
|
$
|
4,215,094
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
4,215,094
|
|
|
$
|
—
|
|
Policy loans
|
|
1,406,774
|
|
|
1,406,774
|
|
|
—
|
|
|
1,406,774
|
|
|
—
|
|
|
—
|
|
||||||
Funds withheld at interest
(1)
|
|
5,904,679
|
|
|
6,258,874
|
|
|
—
|
|
|
—
|
|
|
6,258,874
|
|
|
—
|
|
||||||
Cash and cash equivalents
(2)
|
|
822,834
|
|
|
822,834
|
|
|
822,834
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Short-term investments
(2)
|
|
32,284
|
|
|
32,284
|
|
|
32,284
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Other invested assets
(2)
|
|
567,448
|
|
|
603,783
|
|
|
27,815
|
|
|
66,501
|
|
|
198,931
|
|
|
310,536
|
|
||||||
Accrued investment income
|
|
388,008
|
|
|
388,008
|
|
|
—
|
|
|
388,008
|
|
|
—
|
|
|
—
|
|
||||||
Liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Interest-sensitive contract liabilities
(1)
|
|
$
|
12,718,836
|
|
|
$
|
12,711,801
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
12,711,801
|
|
|
$
|
—
|
|
Long-term debt
|
|
2,788,494
|
|
|
3,029,601
|
|
|
—
|
|
|
—
|
|
|
3,029,601
|
|
|
—
|
|
||||||
Collateral finance and securitization notes
|
|
823,108
|
|
|
730,809
|
|
|
—
|
|
|
—
|
|
|
730,809
|
|
|
—
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
December 31, 2016:
|
|
Carrying Value
|
|
Estimated
Fair Value
|
|
Fair Value Measurement Using:
|
||||||||||||||||||
Level 1
|
|
Level 2
|
|
Level 3
|
|
NAV
|
||||||||||||||||||
Assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Mortgage loans on real estate
|
|
$
|
3,775,522
|
|
|
$
|
3,786,987
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
3,786,987
|
|
|
$
|
—
|
|
Policy loans
|
|
1,427,602
|
|
|
1,427,602
|
|
|
—
|
|
|
1,427,602
|
|
|
—
|
|
|
—
|
|
||||||
Funds withheld at interest
(1)
|
|
5,893,381
|
|
|
6,193,166
|
|
|
—
|
|
|
—
|
|
|
6,193,166
|
|
|
—
|
|
||||||
Cash and cash equivalents
(2)
|
|
862,117
|
|
|
862,117
|
|
|
862,117
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Short-term investments
(2)
|
|
32,469
|
|
|
32,469
|
|
|
32,469
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Other invested assets
(2)
|
|
477,132
|
|
|
510,640
|
|
|
26,294
|
|
|
55,669
|
|
|
131,904
|
|
|
296,773
|
|
||||||
Accrued investment income
|
|
347,173
|
|
|
347,173
|
|
|
—
|
|
|
347,173
|
|
|
—
|
|
|
—
|
|
||||||
Liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Interest-sensitive contract liabilities
(1)
|
|
$
|
10,225,099
|
|
|
$
|
10,234,544
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
10,234,544
|
|
|
$
|
—
|
|
Long-term debt
|
|
3,088,635
|
|
|
3,186,173
|
|
|
—
|
|
|
—
|
|
|
3,186,173
|
|
|
—
|
|
||||||
Collateral finance and securitization notes
|
|
840,700
|
|
|
745,805
|
|
|
—
|
|
|
—
|
|
|
745,805
|
|
|
—
|
|
(1)
|
Carrying values presented herein differ from those presented in the condensed consolidated balance sheets because certain items within the respective financial statement caption are embedded derivatives and are measured at fair value on a recurring basis.
|
(2)
|
Carrying values presented herein differ from those presented in the condensed consolidated balance sheets because certain items within the respective financial statement caption are measured at fair value on a recurring basis.
|
7.
|
Segment Information
|
|
|
Three months ended June 30,
|
|
Six months ended June 30,
|
||||||||||||
Revenues:
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
U.S. and Latin America:
|
|
|
|
|
|
|
|
|
||||||||
Traditional
|
|
$
|
1,522,698
|
|
|
$
|
1,494,003
|
|
|
$
|
3,011,201
|
|
|
$
|
2,894,820
|
|
Financial Solutions
|
|
271,976
|
|
|
305,077
|
|
|
570,822
|
|
|
343,982
|
|
||||
Total
|
|
1,794,674
|
|
|
1,799,080
|
|
|
3,582,023
|
|
|
3,238,802
|
|
||||
Canada:
|
|
|
|
|
|
|
|
|
||||||||
Traditional
|
|
269,273
|
|
|
288,912
|
|
|
533,548
|
|
|
546,912
|
|
||||
Financial Solutions
|
|
12,003
|
|
|
11,854
|
|
|
23,810
|
|
|
22,538
|
|
||||
Total
|
|
281,276
|
|
|
300,766
|
|
|
557,358
|
|
|
569,450
|
|
||||
Europe, Middle East and Africa:
|
|
|
|
|
|
|
|
|
||||||||
Traditional
|
|
345,920
|
|
|
301,642
|
|
|
664,006
|
|
|
591,276
|
|
||||
Financial Solutions
|
|
73,405
|
|
|
80,977
|
|
|
153,394
|
|
|
148,733
|
|
||||
Total
|
|
419,325
|
|
|
382,619
|
|
|
817,400
|
|
|
740,009
|
|
||||
Asia Pacific:
|
|
|
|
|
|
|
|
|
||||||||
Traditional
|
|
561,529
|
|
|
477,571
|
|
|
1,066,759
|
|
|
871,770
|
|
||||
Financial Solutions
|
|
17,984
|
|
|
17,045
|
|
|
38,436
|
|
|
37,116
|
|
||||
Total
|
|
579,513
|
|
|
494,616
|
|
|
1,105,195
|
|
|
908,886
|
|
||||
Corporate and Other
|
|
54,488
|
|
|
61,987
|
|
|
76,040
|
|
|
94,489
|
|
||||
Total
|
|
$
|
3,129,276
|
|
|
$
|
3,039,068
|
|
|
$
|
6,138,016
|
|
|
$
|
5,551,636
|
|
|
|
Three months ended June 30,
|
|
Six months ended June 30,
|
||||||||||||
Income (loss) before income taxes:
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
U.S. and Latin America:
|
|
|
|
|
|
|
|
|
||||||||
Traditional
|
|
$
|
90,594
|
|
|
$
|
111,430
|
|
|
$
|
120,554
|
|
|
$
|
162,528
|
|
Financial Solutions
|
|
106,985
|
|
|
108,854
|
|
|
210,571
|
|
|
93,958
|
|
||||
Total
|
|
197,579
|
|
|
220,284
|
|
|
331,125
|
|
|
256,486
|
|
||||
Canada:
|
|
|
|
|
|
|
|
|
||||||||
Traditional
|
|
32,836
|
|
|
43,309
|
|
|
52,164
|
|
|
63,404
|
|
||||
Financial Solutions
|
|
4,425
|
|
|
2,128
|
|
|
8,017
|
|
|
2,720
|
|
||||
Total
|
|
37,261
|
|
|
45,437
|
|
|
60,181
|
|
|
66,124
|
|
||||
Europe, Middle East and Africa:
|
|
|
|
|
|
|
|
|
||||||||
Traditional
|
|
11,354
|
|
|
6,834
|
|
|
25,330
|
|
|
5,718
|
|
||||
Financial Solutions
|
|
28,905
|
|
|
27,469
|
|
|
60,823
|
|
|
52,893
|
|
||||
Total
|
|
40,259
|
|
|
34,303
|
|
|
86,153
|
|
|
58,611
|
|
||||
Asia Pacific:
|
|
|
|
|
|
|
|
|
||||||||
Traditional
|
|
53,322
|
|
|
34,482
|
|
|
95,010
|
|
|
75,642
|
|
||||
Financial Solutions
|
|
5,377
|
|
|
(73
|
)
|
|
11,249
|
|
|
8,480
|
|
||||
Total
|
|
58,699
|
|
|
34,409
|
|
|
106,259
|
|
|
84,122
|
|
||||
Corporate and Other
|
|
5,517
|
|
|
18,790
|
|
|
(36,559
|
)
|
|
(4,540
|
)
|
||||
Total
|
|
$
|
339,315
|
|
|
$
|
353,223
|
|
|
$
|
547,159
|
|
|
$
|
460,803
|
|
Assets:
|
|
June 30, 2017
|
|
December 31, 2016
|
||||
U.S. and Latin America:
|
|
|
|
|
||||
Traditional
|
|
$
|
18,588,924
|
|
|
$
|
18,140,825
|
|
Financial Solutions
|
|
16,370,238
|
|
|
13,712,106
|
|
||
Total
|
|
34,959,162
|
|
|
31,852,931
|
|
||
Canada:
|
|
|
|
|
||||
Traditional
|
|
3,965,235
|
|
|
3,846,682
|
|
||
Financial Solutions
|
|
104,804
|
|
|
85,405
|
|
||
Total
|
|
4,070,039
|
|
|
3,932,087
|
|
||
Europe, Middle East and Africa:
|
|
|
|
|
||||
Traditional
|
|
2,852,309
|
|
|
2,559,124
|
|
||
Financial Solutions
|
|
4,016,788
|
|
|
3,876,131
|
|
||
Total
|
|
6,869,097
|
|
|
6,435,255
|
|
||
Asia Pacific:
|
|
|
|
|
||||
Traditional
|
|
4,449,350
|
|
|
3,968,081
|
|
||
Financial Solutions
|
|
1,179,010
|
|
|
676,281
|
|
||
Total
|
|
5,628,360
|
|
|
4,644,362
|
|
||
Corporate and Other
|
|
6,611,414
|
|
|
6,233,244
|
|
||
Total
|
|
$
|
58,138,072
|
|
|
$
|
53,097,879
|
|
|
June 30, 2017
|
|
December 31, 2016
|
||||
Limited partnership interests and real estate joint ventures
|
$
|
328,739
|
|
|
$
|
332,169
|
|
Commercial mortgage loans
|
84,685
|
|
|
126,248
|
|
||
Bank loans and private placements
|
51,627
|
|
|
58,318
|
|
||
Equity release mortgages
|
173,203
|
|
|
130,324
|
|
Commitment Period:
|
Maximum Potential Obligation
|
||
2023
|
$
|
500.0
|
|
2033
|
450.0
|
|
|
2034
|
2,000.0
|
|
|
2035
|
1,314.2
|
|
|
2036
|
2,932.0
|
|
|
2037
|
5,657.4
|
|
|
June 30, 2017
|
|
December 31, 2016
|
||||
Treaty guarantees
|
$
|
964,978
|
|
|
$
|
902,216
|
|
Treaty guarantees, net of assets in trust
|
833,654
|
|
|
780,786
|
|
||
Securities borrowing and repurchase arrangements
|
207,140
|
|
|
263,820
|
|
||
Financing arrangements
|
106,681
|
|
|
119,073
|
|
||
Lease obligations
|
2,162
|
|
|
2,428
|
|
9.
|
Income Tax
|
|
|
Three months ended June 30,
|
|
Six months ended June 30,
|
||||||||||||
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Tax provision at U.S. statutory rate
|
|
$
|
118,760
|
|
|
$
|
123,628
|
|
|
$
|
191,506
|
|
|
$
|
161,281
|
|
Increase (decrease) in income taxes resulting from:
|
|
|
|
|
|
|
|
|
||||||||
Foreign tax rate differing from U.S. tax rate
|
|
(4,261
|
)
|
|
(8,398
|
)
|
|
(10,413
|
)
|
|
(12,282
|
)
|
||||
Differences in tax bases in foreign jurisdictions
|
|
(13,375
|
)
|
|
(5,553
|
)
|
|
(16,759
|
)
|
|
(14,489
|
)
|
||||
Deferred tax valuation allowance
|
|
13,031
|
|
|
4,288
|
|
|
14,213
|
|
|
9,287
|
|
||||
Amounts related to tax audit contingencies
|
|
(1,783
|
)
|
|
3,288
|
|
|
(1,172
|
)
|
|
3,889
|
|
||||
Corporate rate changes
|
|
44
|
|
|
—
|
|
|
(1,193
|
)
|
|
—
|
|
||||
Subpart F
|
|
1,140
|
|
|
738
|
|
|
1,326
|
|
|
1,433
|
|
||||
Foreign tax credits
|
|
(1,938
|
)
|
|
(427
|
)
|
|
(2,064
|
)
|
|
(721
|
)
|
||||
Equity compensation excess benefit
|
|
(2,609
|
)
|
|
—
|
|
|
(4,464
|
)
|
|
—
|
|
||||
Return to provision adjustments
|
|
(633
|
)
|
|
(442
|
)
|
|
(403
|
)
|
|
(316
|
)
|
||||
Other, net
|
|
(1,251
|
)
|
|
(2
|
)
|
|
(1,120
|
)
|
|
146
|
|
||||
Total provision for income taxes
|
|
$
|
107,125
|
|
|
$
|
117,120
|
|
|
$
|
169,457
|
|
|
$
|
148,228
|
|
Effective tax rate
|
|
31.6
|
%
|
|
33.2
|
%
|
|
31.0
|
%
|
|
32.2
|
%
|
|
|
Pension Benefits
|
|
Other Benefits
|
||||||||||||
|
|
Three months ended June 30,
|
|
Three months ended June 30,
|
||||||||||||
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Service cost
|
|
$
|
2,819
|
|
|
$
|
2,652
|
|
|
$
|
721
|
|
|
$
|
1,015
|
|
Interest cost
|
|
1,431
|
|
|
1,076
|
|
|
565
|
|
|
643
|
|
||||
Expected return on plan assets
|
|
(1,823
|
)
|
|
(1,345
|
)
|
|
—
|
|
|
—
|
|
||||
Amortization of prior service cost
|
|
95
|
|
|
75
|
|
|
(155
|
)
|
|
—
|
|
||||
Amortization of prior actuarial loss
|
|
1,082
|
|
|
1,224
|
|
|
457
|
|
|
617
|
|
||||
Settlements
|
|
256
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Net periodic benefit cost
|
|
$
|
3,860
|
|
|
$
|
3,682
|
|
|
$
|
1,588
|
|
|
$
|
2,275
|
|
|
|
Pension Benefits
|
|
Other Benefits
|
||||||||||||
|
|
Six months ended June 30,
|
|
Six months ended June 30,
|
||||||||||||
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Service cost
|
|
$
|
5,399
|
|
|
$
|
4,958
|
|
|
$
|
1,442
|
|
|
$
|
2,031
|
|
Interest cost
|
|
2,629
|
|
|
2,335
|
|
|
1,130
|
|
|
1,286
|
|
||||
Expected return on plan assets
|
|
(3,108
|
)
|
|
(2,569
|
)
|
|
—
|
|
|
—
|
|
||||
Amortization of prior service cost
|
|
169
|
|
|
153
|
|
|
(311
|
)
|
|
—
|
|
||||
Amortization of prior actuarial loss
|
|
2,163
|
|
|
2,081
|
|
|
914
|
|
|
1,233
|
|
||||
Settlements
|
|
513
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Net periodic benefit cost
|
|
$
|
7,765
|
|
|
$
|
6,958
|
|
|
$
|
3,175
|
|
|
$
|
4,550
|
|
11.
|
Reinsurance
|
|
|
|
|
June 30, 2017
|
|
December 31, 2016
|
||||||||||
Reinsurer
|
|
A.M. Best Rating
|
|
Amount
|
|
% of Total
|
|
Amount
|
|
% of Total
|
||||||
Reinsurer A
|
|
A+
|
|
$
|
291,029
|
|
|
36.4
|
%
|
|
$
|
240,894
|
|
|
35.2
|
%
|
Reinsurer B
|
|
A+
|
|
195,222
|
|
|
24.4
|
|
|
183,881
|
|
|
26.9
|
|
||
Reinsurer C
|
|
A+
|
|
67,691
|
|
|
8.5
|
|
|
68,832
|
|
|
10.1
|
|
||
Reinsurer D
|
|
A++
|
|
47,520
|
|
|
6.0
|
|
|
36,202
|
|
|
5.3
|
|
||
Reinsurer E
|
|
A
|
|
42,808
|
|
|
5.4
|
|
|
35,484
|
|
|
5.2
|
|
||
Other reinsurers
|
|
|
|
154,095
|
|
|
19.3
|
|
|
118,679
|
|
|
17.3
|
|
||
Total
|
|
|
|
$
|
798,365
|
|
|
100.0
|
%
|
|
$
|
683,972
|
|
|
100.0
|
%
|
12.
|
New Accounting Standards
|
|
|
Three months ended June 30,
|
|
Six months ended June 30,
|
||||||||||||
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Revenues:
|
|
(Dollars in thousands, except per share data)
|
||||||||||||||
Net premiums
|
|
$
|
2,480,451
|
|
|
$
|
2,346,945
|
|
|
$
|
4,846,147
|
|
|
$
|
4,503,950
|
|
Investment income, net of related expenses
|
|
518,538
|
|
|
507,666
|
|
|
1,032,902
|
|
|
924,932
|
|
||||
Investment related gains (losses), net
|
|
56,295
|
|
|
118,264
|
|
|
116,818
|
|
|
(2,622
|
)
|
||||
Other revenues
|
|
73,992
|
|
|
66,193
|
|
|
142,149
|
|
|
125,376
|
|
||||
Total revenues
|
|
3,129,276
|
|
|
3,039,068
|
|
|
6,138,016
|
|
|
5,551,636
|
|
||||
Benefits and Expenses:
|
|
|
|
|
|
|
|
|
||||||||
Claims and other policy benefits
|
|
2,164,363
|
|
|
1,997,502
|
|
|
4,270,508
|
|
|
3,884,266
|
|
||||
Interest credited
|
|
115,285
|
|
|
95,849
|
|
|
222,969
|
|
|
183,754
|
|
||||
Policy acquisition costs and other insurance expenses
|
|
319,832
|
|
|
405,681
|
|
|
699,221
|
|
|
639,444
|
|
||||
Other operating expenses
|
|
154,356
|
|
|
159,895
|
|
|
312,862
|
|
|
317,319
|
|
||||
Interest expense
|
|
29,352
|
|
|
20,331
|
|
|
71,754
|
|
|
53,138
|
|
||||
Collateral finance and securitization expense
|
|
6,773
|
|
|
6,587
|
|
|
13,543
|
|
|
12,912
|
|
||||
Total benefits and expenses
|
|
2,789,961
|
|
|
2,685,845
|
|
|
5,590,857
|
|
|
5,090,833
|
|
||||
Income before income taxes
|
|
339,315
|
|
|
353,223
|
|
|
547,159
|
|
|
460,803
|
|
||||
Provision for income taxes
|
|
107,125
|
|
|
117,120
|
|
|
169,457
|
|
|
148,228
|
|
||||
Net income
|
|
$
|
232,190
|
|
|
$
|
236,103
|
|
|
$
|
377,702
|
|
|
$
|
312,575
|
|
Earnings per share:
|
|
|
|
|
|
|
|
|
||||||||
Basic earnings per share
|
|
$
|
3.60
|
|
|
$
|
3.68
|
|
|
$
|
5.86
|
|
|
$
|
4.86
|
|
Diluted earnings per share
|
|
$
|
3.54
|
|
|
$
|
3.64
|
|
|
$
|
5.76
|
|
|
$
|
4.81
|
|
Dividends declared per share
|
|
$
|
0.41
|
|
|
$
|
0.37
|
|
|
$
|
0.82
|
|
|
$
|
0.74
|
|
•
|
The change in the value of embedded derivatives related to reinsurance treaties written on a modco or funds withheld basis are subject to the general accounting principles for derivatives and hedging related to embedded derivatives. The unrealized gains and losses associated with these embedded derivatives, after adjustment for deferred acquisition costs, resulted in a decrease in income before income taxes of $24.4 million in the second quarter of 2017 and an increase of $56.5 million in the first six months of 2017, as compared to the same periods in 2016.
|
•
|
Changes in risk-free rates used in the fair value estimates of embedded derivatives associated with EIAs affect the amount of unrealized gains and losses the Company recognizes. The unrealized gains and losses associated with EIAs, after adjustment for deferred acquisition costs and retrocession, resulted in a decrease in income before income taxes of $4.7 million in the second quarter of 2017 and an increase of $20.0 million in the first six months of 2017, as compared to the same periods in 2016.
|
•
|
The change in the Company’s liability for variable annuities associated with guaranteed minimum living benefits affects the amount of unrealized gains and losses the Company recognizes. The unrealized gains and losses associated with guaranteed minimum living benefits, after adjustment for deferred acquisition costs, increased income before income taxes by $66.4 million and $150.6 million in the second quarter and first six months of 2017, respectively, as compared to the same periods in 2016. After consideration of the change in fair value of freestanding derivatives used to hedge this liability, income before income taxes increased by $1.5 million and $9.1 million in the second quarter and first six months of 2017, respectively, as compared to the same periods in 2016.
|
For the three months ended June 30, 2017:
|
|
|
|
Financial Solutions
|
|
|
||||||||||
(dollars in thousands)
|
|
|
|
Asset-Intensive
|
|
Financial
Reinsurance
|
|
Total U.S. and Latin America
|
||||||||
|
|
Traditional
|
|
|||||||||||||
Revenues:
|
|
|
|
|
|
|
|
|
||||||||
Net premiums
|
|
$
|
1,335,316
|
|
|
$
|
7,128
|
|
|
$
|
—
|
|
|
$
|
1,342,444
|
|
Investment income, net of related expenses
|
|
183,713
|
|
|
177,957
|
|
|
1,853
|
|
|
363,523
|
|
||||
Investment related gains (losses), net
|
|
(654
|
)
|
|
32,626
|
|
|
—
|
|
|
31,972
|
|
||||
Other revenues
|
|
4,323
|
|
|
26,211
|
|
|
26,201
|
|
|
56,735
|
|
||||
Total revenues
|
|
1,522,698
|
|
|
243,922
|
|
|
28,054
|
|
|
1,794,674
|
|
||||
Benefits and expenses:
|
|
|
|
|
|
|
|
|
||||||||
Claims and other policy benefits
|
|
1,194,917
|
|
|
24,503
|
|
|
—
|
|
|
1,219,420
|
|
||||
Interest credited
|
|
20,838
|
|
|
87,664
|
|
|
—
|
|
|
108,502
|
|
||||
Policy acquisition costs and other insurance expenses
|
|
186,375
|
|
|
38,211
|
|
|
5,619
|
|
|
230,205
|
|
||||
Other operating expenses
|
|
29,974
|
|
|
6,542
|
|
|
2,452
|
|
|
38,968
|
|
||||
Total benefits and expenses
|
|
1,432,104
|
|
|
156,920
|
|
|
8,071
|
|
|
1,597,095
|
|
||||
Income before income taxes
|
|
$
|
90,594
|
|
|
$
|
87,002
|
|
|
$
|
19,983
|
|
|
$
|
197,579
|
|
|
|
|
|
|
|
|
|
|
||||||||
For the three months ended June 30, 2016:
|
|
|
|
Financial Solutions
|
|
|
||||||||||
(dollars in thousands)
|
|
|
|
Asset-Intensive
|
|
Financial
Reinsurance
|
|
Total U.S. and Latin America
|
||||||||
|
|
Traditional
|
|
|||||||||||||
Revenues:
|
|
|
|
|
|
|
|
|
||||||||
Net premiums
|
|
$
|
1,307,395
|
|
|
$
|
5,662
|
|
|
$
|
—
|
|
|
$
|
1,313,057
|
|
Investment income, net of related expenses
|
|
182,238
|
|
|
177,681
|
|
|
2,386
|
|
|
362,305
|
|
||||
Investment related gains (losses), net
|
|
(882
|
)
|
|
76,830
|
|
|
—
|
|
|
75,948
|
|
||||
Other revenues
|
|
5,252
|
|
|
24,555
|
|
|
17,963
|
|
|
47,770
|
|
||||
Total revenues
|
|
1,494,003
|
|
|
284,728
|
|
|
20,349
|
|
|
1,799,080
|
|
||||
Benefits and expenses:
|
|
|
|
|
|
|
|
|
||||||||
Claims and other policy benefits
|
|
1,149,665
|
|
|
19,507
|
|
|
—
|
|
|
1,169,172
|
|
||||
Interest credited
|
|
20,845
|
|
|
68,436
|
|
|
—
|
|
|
89,281
|
|
||||
Policy acquisition costs and other insurance expenses
|
|
182,285
|
|
|
97,078
|
|
|
3,085
|
|
|
282,448
|
|
||||
Other operating expenses
|
|
29,778
|
|
|
5,728
|
|
|
2,389
|
|
|
37,895
|
|
||||
Total benefits and expenses
|
|
1,382,573
|
|
|
190,749
|
|
|
5,474
|
|
|
1,578,796
|
|
||||
Income before income taxes
|
|
$
|
111,430
|
|
|
$
|
93,979
|
|
|
$
|
14,875
|
|
|
$
|
220,284
|
|
For the six months ended June 30, 2017:
|
|
|
|
Financial Solutions
|
|
|
||||||||||
(dollars in thousands)
|
|
|
|
Asset-Intensive
|
|
Financial
Reinsurance
|
|
Total U.S. and Latin America
|
||||||||
|
|
Traditional
|
|
|||||||||||||
Revenues:
|
|
|
|
|
|
|
|
|
||||||||
Net premiums
|
|
$
|
2,639,661
|
|
|
$
|
11,763
|
|
|
$
|
—
|
|
|
$
|
2,651,424
|
|
Investment income, net of related expenses
|
|
362,708
|
|
|
365,110
|
|
|
3,517
|
|
|
731,335
|
|
||||
Investment related gains (losses), net
|
|
1,311
|
|
|
90,397
|
|
|
—
|
|
|
91,708
|
|
||||
Other revenues
|
|
7,521
|
|
|
49,425
|
|
|
50,610
|
|
|
107,556
|
|
||||
Total revenues
|
|
3,011,201
|
|
|
516,695
|
|
|
54,127
|
|
|
3,582,023
|
|
||||
Benefits and expenses:
|
|
|
|
|
|
|
|
|
||||||||
Claims and other policy benefits
|
|
2,420,557
|
|
|
42,039
|
|
|
—
|
|
|
2,462,596
|
|
||||
Interest credited
|
|
41,127
|
|
|
166,821
|
|
|
—
|
|
|
207,948
|
|
||||
Policy acquisition costs and other insurance expenses
|
|
367,185
|
|
|
121,864
|
|
|
11,560
|
|
|
500,609
|
|
||||
Other operating expenses
|
|
61,778
|
|
|
13,199
|
|
|
4,768
|
|
|
79,745
|
|
||||
Total benefits and expenses
|
|
2,890,647
|
|
|
343,923
|
|
|
16,328
|
|
|
3,250,898
|
|
||||
Income before income taxes
|
|
$
|
120,554
|
|
|
$
|
172,772
|
|
|
$
|
37,799
|
|
|
$
|
331,125
|
|
|
|
|
|
|
|
|
|
|
||||||||
For the six months ended June 30, 2016:
|
|
|
|
Financial Solutions
|
|
|
||||||||||
(dollars in thousands)
|
|
|
|
Asset-Intensive
|
|
Financial
Reinsurance
|
|
Total U.S. and Latin America
|
||||||||
|
|
Traditional
|
|
|||||||||||||
Revenues:
|
|
|
|
|
|
|
|
|
||||||||
Net premiums
|
|
$
|
2,541,789
|
|
|
$
|
11,881
|
|
|
$
|
—
|
|
|
$
|
2,553,670
|
|
Investment income, net of related expenses
|
|
347,261
|
|
|
294,896
|
|
|
4,993
|
|
|
647,150
|
|
||||
Investment related gains (losses), net
|
|
(2,982
|
)
|
|
(51,721
|
)
|
|
—
|
|
|
(54,703
|
)
|
||||
Other revenues
|
|
8,752
|
|
|
47,389
|
|
|
36,544
|
|
|
92,685
|
|
||||
Total revenues
|
|
2,894,820
|
|
|
302,445
|
|
|
41,537
|
|
|
3,238,802
|
|
||||
Benefits and expenses:
|
|
|
|
|
|
|
|
|
||||||||
Claims and other policy benefits
|
|
2,269,107
|
|
|
39,340
|
|
|
—
|
|
|
2,308,447
|
|
||||
Interest credited
|
|
42,245
|
|
|
130,994
|
|
|
—
|
|
|
173,239
|
|
||||
Policy acquisition costs and other insurance expenses
|
|
359,363
|
|
|
57,422
|
|
|
5,653
|
|
|
422,438
|
|
||||
Other operating expenses
|
|
61,577
|
|
|
11,540
|
|
|
5,075
|
|
|
78,192
|
|
||||
Total benefits and expenses
|
|
2,732,292
|
|
|
239,296
|
|
|
10,728
|
|
|
2,982,316
|
|
||||
Income before income taxes
|
|
$
|
162,528
|
|
|
$
|
63,149
|
|
|
$
|
30,809
|
|
|
$
|
256,486
|
|
(dollars in thousands)
|
|
Three months ended June 30,
|
|
Six months ended June 30,
|
||||||||||||
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Revenues:
|
|
|
|
|
|
|
|
|
||||||||
Total revenues
|
|
$
|
243,922
|
|
|
$
|
284,728
|
|
|
$
|
516,695
|
|
|
$
|
302,445
|
|
Less:
|
|
|
|
|
|
|
|
|
||||||||
Embedded derivatives – modco/funds withheld treaties
|
|
15,762
|
|
|
77,848
|
|
|
82,500
|
|
|
(12,366
|
)
|
||||
Guaranteed minimum benefit riders and related free standing derivatives
|
|
3,017
|
|
|
2,923
|
|
|
(3,877
|
)
|
|
(12,063
|
)
|
||||
Revenues before certain derivatives
|
|
225,143
|
|
|
203,957
|
|
|
438,072
|
|
|
326,874
|
|
||||
Benefits and expenses:
|
|
|
|
|
|
|
|
|
||||||||
Total benefits and expenses
|
|
156,920
|
|
|
190,749
|
|
|
343,923
|
|
|
239,296
|
|
||||
Less:
|
|
|
|
|
|
|
|
|
||||||||
Embedded derivatives – modco/funds withheld treaties
|
|
10,585
|
|
|
48,033
|
|
|
39,526
|
|
|
(3,021
|
)
|
||||
Guaranteed minimum benefit riders and related free standing derivatives
|
|
1,096
|
|
|
2,545
|
|
|
(1,186
|
)
|
|
(304
|
)
|
||||
Equity-indexed annuities
|
|
(2,641
|
)
|
|
(7,359
|
)
|
|
(14,084
|
)
|
|
5,901
|
|
||||
Benefits and expenses before certain derivatives
|
|
147,880
|
|
|
147,530
|
|
|
319,667
|
|
|
236,720
|
|
||||
Income before income taxes:
|
|
|
|
|
|
|
|
|
||||||||
Income before income taxes
|
|
87,002
|
|
|
93,979
|
|
|
172,772
|
|
|
63,149
|
|
||||
Less:
|
|
|
|
|
|
|
|
|
||||||||
Embedded derivatives – modco/funds withheld treaties
|
|
5,177
|
|
|
29,815
|
|
|
42,974
|
|
|
(9,345
|
)
|
||||
Guaranteed minimum benefit riders and related free standing derivatives
|
|
1,921
|
|
|
378
|
|
|
(2,691
|
)
|
|
(11,759
|
)
|
||||
Equity-indexed annuities
|
|
2,641
|
|
|
7,359
|
|
|
14,084
|
|
|
(5,901
|
)
|
||||
Income before income taxes and certain derivatives
|
|
$
|
77,263
|
|
|
$
|
56,427
|
|
|
$
|
118,405
|
|
|
$
|
90,154
|
|
(dollars in thousands)
|
Three months ended June 30,
|
||||||||||||||||||||||
|
2017
|
|
2016
|
||||||||||||||||||||
Revenues:
|
Traditional
|
|
Financial Solutions
|
|
Total Canada
|
|
Traditional
|
|
Financial Solutions
|
|
Total Canada
|
||||||||||||
Net premiums
|
$
|
221,380
|
|
|
$
|
9,314
|
|
|
$
|
230,694
|
|
|
$
|
240,107
|
|
|
$
|
10,192
|
|
|
$
|
250,299
|
|
Investment income, net of related expenses
|
44,830
|
|
|
1,351
|
|
|
46,181
|
|
|
46,859
|
|
|
228
|
|
|
47,087
|
|
||||||
Investment related gains (losses), net
|
2,598
|
|
|
—
|
|
|
2,598
|
|
|
2,285
|
|
|
—
|
|
|
2,285
|
|
||||||
Other revenues
|
465
|
|
|
1,338
|
|
|
1,803
|
|
|
(339
|
)
|
|
1,434
|
|
|
1,095
|
|
||||||
Total revenues
|
269,273
|
|
|
12,003
|
|
|
281,276
|
|
|
288,912
|
|
|
11,854
|
|
|
300,766
|
|
||||||
Benefits and expenses:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Claims and other policy benefits
|
181,197
|
|
|
7,099
|
|
|
188,296
|
|
|
176,478
|
|
|
8,834
|
|
|
185,312
|
|
||||||
Interest credited
|
5
|
|
|
—
|
|
|
5
|
|
|
7
|
|
|
—
|
|
|
7
|
|
||||||
Policy acquisition costs and other insurance expenses
|
47,597
|
|
|
206
|
|
|
47,803
|
|
|
60,021
|
|
|
513
|
|
|
60,534
|
|
||||||
Other operating expenses
|
7,638
|
|
|
273
|
|
|
7,911
|
|
|
9,097
|
|
|
379
|
|
|
9,476
|
|
||||||
Total benefits and expenses
|
236,437
|
|
|
7,578
|
|
|
244,015
|
|
|
245,603
|
|
|
9,726
|
|
|
255,329
|
|
||||||
Income before income taxes
|
$
|
32,836
|
|
|
$
|
4,425
|
|
|
$
|
37,261
|
|
|
$
|
43,309
|
|
|
$
|
2,128
|
|
|
$
|
45,437
|
|
(dollars in thousands)
|
Six months ended June 30,
|
||||||||||||||||||||||
|
2017
|
|
2016
|
||||||||||||||||||||
Revenues:
|
Traditional
|
|
Financial Solutions
|
|
Total Canada
|
|
Traditional
|
|
Financial Solutions
|
|
Total Canada
|
||||||||||||
Net premiums
|
$
|
437,142
|
|
|
$
|
18,724
|
|
|
$
|
455,866
|
|
|
$
|
455,570
|
|
|
$
|
19,143
|
|
|
$
|
474,713
|
|
Investment income, net of related expenses
|
89,336
|
|
|
2,395
|
|
|
91,731
|
|
|
88,882
|
|
|
612
|
|
|
89,494
|
|
||||||
Investment related gains (losses), net
|
6,441
|
|
|
—
|
|
|
6,441
|
|
|
3,925
|
|
|
—
|
|
|
3,925
|
|
||||||
Other revenues
|
629
|
|
|
2,691
|
|
|
3,320
|
|
|
(1,465
|
)
|
|
2,783
|
|
|
1,318
|
|
||||||
Total revenues
|
533,548
|
|
|
23,810
|
|
|
557,358
|
|
|
546,912
|
|
|
22,538
|
|
|
569,450
|
|
||||||
Benefits and expenses:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Claims and other policy benefits
|
372,249
|
|
|
14,718
|
|
|
386,967
|
|
|
348,879
|
|
|
18,438
|
|
|
367,317
|
|
||||||
Interest credited
|
9
|
|
|
—
|
|
|
9
|
|
|
9
|
|
|
—
|
|
|
9
|
|
||||||
Policy acquisition costs and other insurance expenses
|
93,279
|
|
|
350
|
|
|
93,629
|
|
|
117,159
|
|
|
717
|
|
|
117,876
|
|
||||||
Other operating expenses
|
15,847
|
|
|
725
|
|
|
16,572
|
|
|
17,461
|
|
|
663
|
|
|
18,124
|
|
||||||
Total benefits and expenses
|
481,384
|
|
|
15,793
|
|
|
497,177
|
|
|
483,508
|
|
|
19,818
|
|
|
503,326
|
|
||||||
Income before income taxes
|
$
|
52,164
|
|
|
$
|
8,017
|
|
|
$
|
60,181
|
|
|
$
|
63,404
|
|
|
$
|
2,720
|
|
|
$
|
66,124
|
|
(dollars in thousands)
|
Three months ended June 30,
|
||||||||||||||||||||||
|
2017
|
|
2016
|
||||||||||||||||||||
Revenues:
|
Traditional
|
|
Financial Solutions
|
|
Total EMEA
|
|
Traditional
|
|
Financial Solutions
|
|
Total EMEA
|
||||||||||||
Net premiums
|
$
|
330,850
|
|
|
$
|
38,520
|
|
|
$
|
369,370
|
|
|
$
|
286,861
|
|
|
$
|
43,484
|
|
|
$
|
330,345
|
|
Investment income, net of related expenses
|
13,585
|
|
|
28,029
|
|
|
41,614
|
|
|
13,321
|
|
|
33,417
|
|
|
46,738
|
|
||||||
Investment related gains (losses), net
|
—
|
|
|
2,458
|
|
|
2,458
|
|
|
—
|
|
|
1,468
|
|
|
1,468
|
|
||||||
Other revenues
|
1,485
|
|
|
4,398
|
|
|
5,883
|
|
|
1,460
|
|
|
2,608
|
|
|
4,068
|
|
||||||
Total revenues
|
345,920
|
|
|
73,405
|
|
|
419,325
|
|
|
301,642
|
|
|
80,977
|
|
|
382,619
|
|
||||||
Benefits and expenses:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Claims and other policy benefits
|
295,004
|
|
|
36,797
|
|
|
331,801
|
|
|
252,336
|
|
|
44,004
|
|
|
296,340
|
|
||||||
Interest credited
|
—
|
|
|
(291
|
)
|
|
(291
|
)
|
|
—
|
|
|
2,966
|
|
|
2,966
|
|
||||||
Policy acquisition costs and other insurance expenses
|
15,349
|
|
|
454
|
|
|
15,803
|
|
|
17,550
|
|
|
723
|
|
|
18,273
|
|
||||||
Other operating expenses
|
24,213
|
|
|
7,540
|
|
|
31,753
|
|
|
24,922
|
|
|
5,815
|
|
|
30,737
|
|
||||||
Total benefits and expenses
|
334,566
|
|
|
44,500
|
|
|
379,066
|
|
|
294,808
|
|
|
53,508
|
|
|
348,316
|
|
||||||
Income before income taxes
|
$
|
11,354
|
|
|
$
|
28,905
|
|
|
$
|
40,259
|
|
|
$
|
6,834
|
|
|
$
|
27,469
|
|
|
$
|
34,303
|
|
(dollars in thousands)
|
Six months ended June 30,
|
||||||||||||||||||||||
|
2017
|
|
2016
|
||||||||||||||||||||
Revenues:
|
Traditional
|
|
Financial Solutions
|
|
Total EMEA
|
|
Traditional
|
|
Financial Solutions
|
|
Total EMEA
|
||||||||||||
Net premiums
|
$
|
635,522
|
|
|
$
|
80,515
|
|
|
$
|
716,037
|
|
|
$
|
563,296
|
|
|
$
|
79,090
|
|
|
$
|
642,386
|
|
Investment income, net of related expenses
|
26,305
|
|
|
57,710
|
|
|
84,015
|
|
|
25,489
|
|
|
62,101
|
|
|
87,590
|
|
||||||
Investment related gains (losses), net
|
7
|
|
|
7,033
|
|
|
7,040
|
|
|
5
|
|
|
464
|
|
|
469
|
|
||||||
Other revenues
|
2,172
|
|
|
8,136
|
|
|
10,308
|
|
|
2,486
|
|
|
7,078
|
|
|
9,564
|
|
||||||
Total revenues
|
664,006
|
|
|
153,394
|
|
|
817,400
|
|
|
591,276
|
|
|
148,733
|
|
|
740,009
|
|
||||||
Benefits and expenses:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Claims and other policy benefits
|
561,405
|
|
|
72,733
|
|
|
634,138
|
|
|
503,579
|
|
|
80,447
|
|
|
584,026
|
|
||||||
Interest credited
|
—
|
|
|
3,822
|
|
|
3,822
|
|
|
—
|
|
|
3,374
|
|
|
3,374
|
|
||||||
Policy acquisition costs and other insurance expenses
|
30,512
|
|
|
743
|
|
|
31,255
|
|
|
32,332
|
|
|
530
|
|
|
32,862
|
|
||||||
Other operating expenses
|
46,759
|
|
|
15,273
|
|
|
62,032
|
|
|
49,647
|
|
|
11,489
|
|
|
61,136
|
|
||||||
Total benefits and expenses
|
638,676
|
|
|
92,571
|
|
|
731,247
|
|
|
585,558
|
|
|
95,840
|
|
|
681,398
|
|
||||||
Income before income taxes
|
$
|
25,330
|
|
|
$
|
60,823
|
|
|
$
|
86,153
|
|
|
$
|
5,718
|
|
|
$
|
52,893
|
|
|
$
|
58,611
|
|
(dollars in thousands)
|
Three months ended June 30,
|
||||||||||||||||||||||
|
2017
|
|
2016
|
||||||||||||||||||||
Revenues:
|
Traditional
|
|
Financial Solutions
|
|
Total Asia Pacific
|
|
Traditional
|
|
Financial Solutions
|
|
Total Asia Pacific
|
||||||||||||
Net premiums
|
$
|
537,352
|
|
|
$
|
549
|
|
|
$
|
537,901
|
|
|
$
|
454,629
|
|
|
$
|
(1,493
|
)
|
|
$
|
453,136
|
|
Investment income, net of related expenses
|
22,345
|
|
|
8,570
|
|
|
30,915
|
|
|
20,461
|
|
|
5,885
|
|
|
26,346
|
|
||||||
Investment related gains (losses), net
|
—
|
|
|
3,582
|
|
|
3,582
|
|
|
—
|
|
|
6,527
|
|
|
6,527
|
|
||||||
Other revenues
|
1,832
|
|
|
5,283
|
|
|
7,115
|
|
|
2,481
|
|
|
6,126
|
|
|
8,607
|
|
||||||
Total revenues
|
561,529
|
|
|
17,984
|
|
|
579,513
|
|
|
477,571
|
|
|
17,045
|
|
|
494,616
|
|
||||||
Benefits and expenses:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Claims and other policy benefits
|
423,294
|
|
|
1,565
|
|
|
424,859
|
|
|
338,447
|
|
|
8,237
|
|
|
346,684
|
|
||||||
Interest credited
|
—
|
|
|
5,572
|
|
|
5,572
|
|
|
—
|
|
|
3,136
|
|
|
3,136
|
|
||||||
Policy acquisition costs and other insurance expenses
|
51,259
|
|
|
1,541
|
|
|
52,800
|
|
|
67,908
|
|
|
1,667
|
|
|
69,575
|
|
||||||
Other operating expenses
|
33,654
|
|
|
3,929
|
|
|
37,583
|
|
|
36,734
|
|
|
4,078
|
|
|
40,812
|
|
||||||
Total benefits and expenses
|
508,207
|
|
|
12,607
|
|
|
520,814
|
|
|
443,089
|
|
|
17,118
|
|
|
460,207
|
|
||||||
Income (loss) before income taxes
|
$
|
53,322
|
|
|
$
|
5,377
|
|
|
$
|
58,699
|
|
|
$
|
34,482
|
|
|
$
|
(73
|
)
|
|
$
|
34,409
|
|
(dollars in thousands)
|
Six months ended June 30,
|
||||||||||||||||||||||
|
2017
|
|
2016
|
||||||||||||||||||||
Revenues:
|
Traditional
|
|
Financial Solutions
|
|
Total Asia Pacific
|
|
Traditional
|
|
Financial Solutions
|
|
Total Asia Pacific
|
||||||||||||
Net premiums
|
$
|
1,020,659
|
|
|
$
|
2,075
|
|
|
$
|
1,022,734
|
|
|
$
|
828,771
|
|
|
$
|
4,193
|
|
|
$
|
832,964
|
|
Investment income, net of related expenses
|
44,247
|
|
|
14,106
|
|
|
58,353
|
|
|
40,328
|
|
|
12,259
|
|
|
52,587
|
|
||||||
Investment related gains (losses), net
|
—
|
|
|
10,767
|
|
|
10,767
|
|
|
14
|
|
|
8,214
|
|
|
8,228
|
|
||||||
Other revenues
|
1,853
|
|
|
11,488
|
|
|
13,341
|
|
|
2,657
|
|
|
12,450
|
|
|
15,107
|
|
||||||
Total revenues
|
1,066,759
|
|
|
38,436
|
|
|
1,105,195
|
|
|
871,770
|
|
|
37,116
|
|
|
908,886
|
|
||||||
Benefits and expenses:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Claims and other policy benefits
|
778,733
|
|
|
8,060
|
|
|
786,793
|
|
|
612,745
|
|
|
11,710
|
|
|
624,455
|
|
||||||
Interest credited
|
—
|
|
|
8,569
|
|
|
8,569
|
|
|
—
|
|
|
6,166
|
|
|
6,166
|
|
||||||
Policy acquisition costs and other insurance expenses
|
124,116
|
|
|
3,458
|
|
|
127,574
|
|
|
112,275
|
|
|
2,954
|
|
|
115,229
|
|
||||||
Other operating expenses
|
68,900
|
|
|
7,100
|
|
|
76,000
|
|
|
71,108
|
|
|
7,806
|
|
|
78,914
|
|
||||||
Total benefits and expenses
|
971,749
|
|
|
27,187
|
|
|
998,936
|
|
|
796,128
|
|
|
28,636
|
|
|
824,764
|
|
||||||
Income before income taxes
|
$
|
95,010
|
|
|
$
|
11,249
|
|
|
$
|
106,259
|
|
|
$
|
75,642
|
|
|
$
|
8,480
|
|
|
$
|
84,122
|
|
(dollars in thousands)
|
|
Three months ended June 30,
|
|
Six months ended June 30,
|
||||||||||||
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Revenues:
|
|
|
|
|
|
|
|
|
||||||||
Net premiums
|
|
$
|
42
|
|
|
$
|
108
|
|
|
$
|
86
|
|
|
$
|
217
|
|
Investment income, net of related expenses
|
|
36,305
|
|
|
25,190
|
|
|
67,468
|
|
|
48,111
|
|
||||
Investment related gains (losses), net
|
|
15,685
|
|
|
32,036
|
|
|
862
|
|
|
39,459
|
|
||||
Other revenues
|
|
2,456
|
|
|
4,653
|
|
|
7,624
|
|
|
6,702
|
|
||||
Total revenues
|
|
54,488
|
|
|
61,987
|
|
|
76,040
|
|
|
94,489
|
|
||||
Benefits and expenses:
|
|
|
|
|
|
|
|
|
||||||||
Claims and other policy benefits
|
|
(13
|
)
|
|
(6
|
)
|
|
14
|
|
|
21
|
|
||||
Interest credited
|
|
1,497
|
|
|
459
|
|
|
2,621
|
|
|
966
|
|
||||
Policy acquisition costs and other insurance income
|
|
(26,779
|
)
|
|
(25,149
|
)
|
|
(53,846
|
)
|
|
(48,961
|
)
|
||||
Other operating expenses
|
|
38,141
|
|
|
40,975
|
|
|
78,513
|
|
|
80,953
|
|
||||
Interest expense
|
|
29,352
|
|
|
20,331
|
|
|
71,754
|
|
|
53,138
|
|
||||
Collateral finance and securitization expense
|
|
6,773
|
|
|
6,587
|
|
|
13,543
|
|
|
12,912
|
|
||||
Total benefits and expenses
|
|
48,971
|
|
|
43,197
|
|
|
112,599
|
|
|
99,029
|
|
||||
Income (loss) before income taxes
|
|
$
|
5,517
|
|
|
$
|
18,790
|
|
|
$
|
(36,559
|
)
|
|
$
|
(4,540
|
)
|
|
|
Three months ended June 30,
|
|
Six months ended June 30,
|
||||||||||||
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Interest expense
|
|
$
|
37,100
|
|
|
$
|
28,351
|
|
|
$
|
87,321
|
|
|
$
|
68,874
|
|
Capital contributions to subsidiaries
|
|
11,000
|
|
|
41,000
|
|
|
18,500
|
|
|
41,000
|
|
||||
Dividends to shareholders
|
|
26,434
|
|
|
23,727
|
|
|
52,815
|
|
|
47,746
|
|
||||
Interest and dividend income
|
|
27,748
|
|
|
32,844
|
|
|
52,281
|
|
|
55,893
|
|
||||
Issuance of unaffiliated debt
|
|
—
|
|
|
799,984
|
|
|
—
|
|
|
799,984
|
|
|
|
June 30, 2017
|
|
December 31, 2016
|
||||
Cash and invested assets
|
|
$
|
962,405
|
|
|
$
|
1,443,755
|
|
|
Six months ended June 30,
|
||||||
|
2017
|
|
2016
|
||||
Dividends to shareholders
|
$
|
52,815
|
|
|
$
|
47,746
|
|
Repurchases of treasury stock
|
—
|
|
|
116,088
|
|
||
Total amount paid to shareholders
|
$
|
52,815
|
|
|
$
|
163,834
|
|
|
|
|
|
||||
Number of shares repurchased
|
—
|
|
|
1,352,211
|
|
||
Average price per share
|
$
|
—
|
|
|
$
|
85.85
|
|
|
|
For the six months ended June 30,
|
||||||
|
|
2017
|
|
2016
|
||||
|
|
(Dollars in thousands)
|
||||||
Sources:
|
|
|
|
|||||
|
Net cash provided by operating activities
|
$
|
655,974
|
|
|
$
|
594,446
|
|
|
Proceeds from long-term debt issuance
|
—
|
|
|
799,984
|
|
||
|
Exercise of stock options, net
|
2,527
|
|
|
5,219
|
|
||
|
Change in cash collateral for derivative positions and other arrangements
|
—
|
|
|
57,055
|
|
||
|
Cash provided by changes in universal life and other
|
|
|
|
||||
|
investment type policies and contracts
|
515,147
|
|
|
304,936
|
|
||
|
Effect of exchange rate changes on cash
|
34,137
|
|
|
19,795
|
|
||
|
Total sources
|
1,207,785
|
|
|
1,781,435
|
|
||
|
|
|
|
|
||||
Uses:
|
|
|
|
|||||
|
Net cash used in investing activities
|
889,675
|
|
|
2,058,207
|
|
||
|
Dividends to stockholders
|
52,815
|
|
|
47,746
|
|
||
|
Repayment of collateral finance and securitization notes
|
23,761
|
|
|
35,369
|
|
||
|
Debt issuance costs
|
—
|
|
|
9,026
|
|
||
|
Principal payments of long-term debt
|
301,278
|
|
|
1,227
|
|
||
|
Purchases of treasury stock
|
10,578
|
|
|
120,806
|
|
||
|
Change in cash collateral for derivatives and other arrangements
|
7,046
|
|
|
—
|
|
||
|
Total uses
|
1,285,153
|
|
|
2,272,381
|
|
||
Net change in cash and cash equivalents
|
$
|
(77,368
|
)
|
|
$
|
(490,946
|
)
|
|
|
June 30, 2017
|
|
% of Total
|
|
December 31, 2016
|
|
% of Total
|
||||||
Fixed maturity securities, available-for-sale
|
|
$
|
36,345,426
|
|
|
71.9
|
%
|
|
$
|
32,093,625
|
|
|
69.6
|
%
|
Mortgage loans on real estate
|
|
4,104,487
|
|
|
8.1
|
|
|
3,775,522
|
|
|
8.2
|
|
||
Policy loans
|
|
1,406,774
|
|
|
2.8
|
|
|
1,427,602
|
|
|
3.1
|
|
||
Funds withheld at interest
|
|
5,968,856
|
|
|
11.8
|
|
|
5,875,919
|
|
|
12.8
|
|
||
Short-term investments
|
|
123,308
|
|
|
0.2
|
|
|
76,710
|
|
|
0.2
|
|
||
Other invested assets
|
|
1,498,370
|
|
|
3.0
|
|
|
1,591,940
|
|
|
3.5
|
|
||
Cash and cash equivalents
|
|
1,123,350
|
|
|
2.2
|
|
|
1,200,718
|
|
|
2.6
|
|
||
Total cash and invested assets
|
|
$
|
50,570,571
|
|
|
100.0
|
%
|
|
$
|
46,042,036
|
|
|
100.0
|
%
|
|
Three months ended June 30,
|
|
Six months ended June 30,
|
||||||||||||||||||
|
2017
|
|
2016
|
|
Increase/
(Decrease)
|
|
2017
|
|
2016
|
|
Increase/
(Decrease)
|
||||||||||
Average invested assets at amortized cost
|
$
|
25,172,367
|
|
|
$
|
23,216,459
|
|
|
8.4
|
%
|
|
$
|
25,052,849
|
|
|
$
|
22,669,219
|
|
|
10.5
|
%
|
Net investment income
|
284,884
|
|
|
268,747
|
|
|
6.0
|
%
|
|
558,092
|
|
|
514,046
|
|
|
8.6
|
%
|
||||
Investment yield (ratio of net investment income to average invested assets)
|
4.60
|
%
|
|
4.71
|
%
|
|
(11) bps
|
|
|
4.50
|
%
|
|
4.59
|
%
|
|
(9) bps
|
|
|
|
|
|
June 30, 2017
|
|
December 31, 2016
|
||||||||||||||||||
NAIC
Designation
|
|
Rating Agency
Designation
|
|
Amortized Cost
|
|
Estimated
Fair Value
|
|
% of Total
|
|
Amortized Cost
|
|
Estimated
Fair Value
|
|
% of Total
|
||||||||||
1
|
|
AAA/AA/A
|
|
$
|
22,039,025
|
|
|
$
|
24,093,110
|
|
|
66.4
|
%
|
|
$
|
19,813,653
|
|
|
$
|
21,369,081
|
|
|
66.5
|
%
|
2
|
|
BBB
|
|
10,097,673
|
|
|
10,626,154
|
|
|
29.2
|
|
|
8,834,469
|
|
|
9,162,483
|
|
|
28.5
|
|
||||
3
|
|
BB
|
|
1,140,073
|
|
|
1,167,968
|
|
|
3.2
|
|
|
944,839
|
|
|
955,735
|
|
|
3.0
|
|
||||
4
|
|
B
|
|
358,668
|
|
|
369,794
|
|
|
1.0
|
|
|
414,087
|
|
|
411,138
|
|
|
1.3
|
|
||||
5
|
|
CCC and lower
|
|
94,473
|
|
|
79,662
|
|
|
0.2
|
|
|
187,744
|
|
|
177,481
|
|
|
0.6
|
|
||||
6
|
|
In or near default
|
|
8,422
|
|
|
8,738
|
|
|
—
|
|
|
16,995
|
|
|
17,707
|
|
|
0.1
|
|
||||
|
|
Total
|
|
$
|
33,738,334
|
|
|
$
|
36,345,426
|
|
|
100.0
|
%
|
|
$
|
30,211,787
|
|
|
$
|
32,093,625
|
|
|
100.0
|
%
|
|
|
June 30, 2017
|
|
December 31, 2016
|
||||||||||||
|
|
Amortized Cost
|
|
Estimated
Fair Value
|
|
Amortized Cost
|
|
Estimated
Fair Value
|
||||||||
Residential mortgage-backed securities:
|
|
|
|
|
|
|
|
|
||||||||
Agency
|
|
$
|
784,648
|
|
|
$
|
813,463
|
|
|
$
|
579,686
|
|
|
$
|
602,549
|
|
Non-agency
|
|
720,826
|
|
|
725,836
|
|
|
678,353
|
|
|
676,027
|
|
||||
Total residential mortgage-backed securities
|
|
1,505,474
|
|
|
1,539,299
|
|
|
1,258,039
|
|
|
1,278,576
|
|
||||
Commercial mortgage-backed securities
|
|
1,558,035
|
|
|
1,582,028
|
|
|
1,342,440
|
|
|
1,363,654
|
|
||||
Asset-backed securities
|
|
1,630,499
|
|
|
1,641,841
|
|
|
1,443,822
|
|
|
1,429,344
|
|
||||
Total
|
|
$
|
4,694,008
|
|
|
$
|
4,763,168
|
|
|
$
|
4,044,301
|
|
|
$
|
4,071,574
|
|
|
Three months ended June 30,
|
|
Six months ended June 30,
|
||||||||||||
2017
|
|
2016
|
|
2017
|
|
2016
|
|||||||||
Impairment losses on fixed maturity securities
|
$
|
3,401
|
|
|
$
|
846
|
|
|
$
|
20,590
|
|
|
$
|
34,663
|
|
Other impairment losses
|
6,309
|
|
|
114
|
|
|
6,307
|
|
|
2,163
|
|
||||
Change in mortgage loan provision
|
366
|
|
|
(325
|
)
|
|
467
|
|
|
(314
|
)
|
||||
Total
|
$
|
10,076
|
|
|
$
|
635
|
|
|
$
|
27,364
|
|
|
$
|
36,512
|
|
|
|
June 30, 2017
|
|
December 31, 2016
|
||
Sector:
|
|
|
|
|
||
Corporate securities
|
|
59.7
|
%
|
|
61.6
|
%
|
Canadian and Canada provincial governments
|
|
1.4
|
|
|
0.9
|
|
Residential mortgage-backed securities
|
|
4.9
|
|
|
3.6
|
|
Asset-backed securities
|
|
3.3
|
|
|
6.4
|
|
Commercial mortgage-backed securities
|
|
2.8
|
|
|
2.1
|
|
State and political subdivisions
|
|
4.6
|
|
|
3.3
|
|
U.S. government and agencies
|
|
17.8
|
|
|
16.8
|
|
Other foreign government, supranational and foreign government-sponsored enterprises
|
|
5.5
|
|
|
5.3
|
|
Total
|
|
100.0
|
%
|
|
100.0
|
%
|
Industry:
|
|
|
|
|
||
Finance
|
|
15.1
|
%
|
|
20.1
|
%
|
Asset-backed
|
|
3.3
|
|
|
6.4
|
|
Industrial
|
|
40.2
|
|
|
32.9
|
|
Mortgage-backed
|
|
7.7
|
|
|
5.7
|
|
Government
|
|
29.3
|
|
|
26.3
|
|
Utility
|
|
4.4
|
|
|
8.6
|
|
Total
|
|
100.0
|
%
|
|
100.0
|
%
|
|
|
June 30, 2017
|
|
December 31, 2016
|
||||||||||
|
|
Recorded
Investment
|
|
% of Total
|
|
Recorded
Investment
|
|
% of Total
|
||||||
U.S. Region:
|
|
|
|
|
|
|
|
|
||||||
Pacific
|
|
$
|
1,218,762
|
|
|
29.6
|
%
|
|
$
|
1,112,636
|
|
|
29.4
|
%
|
South Atlantic
|
|
834,828
|
|
|
20.3
|
|
|
782,509
|
|
|
20.7
|
|
||
Mountain
|
|
684,634
|
|
|
16.7
|
|
|
615,915
|
|
|
16.3
|
|
||
East North Central
|
|
469,191
|
|
|
11.4
|
|
|
422,512
|
|
|
11.2
|
|
||
West North Central
|
|
307,889
|
|
|
7.5
|
|
|
318,212
|
|
|
8.4
|
|
||
West South Central
|
|
324,343
|
|
|
7.9
|
|
|
317,194
|
|
|
8.4
|
|
||
Middle Atlantic
|
|
95,363
|
|
|
2.3
|
|
|
92,683
|
|
|
2.4
|
|
||
East South Central
|
|
97,851
|
|
|
2.4
|
|
|
57,216
|
|
|
1.5
|
|
||
New England
|
|
9,230
|
|
|
0.2
|
|
|
9,346
|
|
|
0.2
|
|
||
Subtotal - U.S.
|
|
4,042,091
|
|
|
98.3
|
|
|
3,728,223
|
|
|
98.5
|
|
||
Canada
|
|
71,941
|
|
|
1.7
|
|
|
54,984
|
|
|
1.5
|
|
||
Total
|
|
$
|
4,114,032
|
|
|
100.0
|
%
|
|
$
|
3,783,207
|
|
|
100.0
|
%
|
•
|
Company’s global ERM framework, activities, and issues.
|
•
|
Identification, assessments, and management of all known, new and emerging strategic risk exposures.
|
•
|
Risk appetite statement, including the ongoing alignment of the risk appetite statement with the Company’s strategy and capital plans.
|
•
|
Review, revise and approve RGA group-level strategic risk limits consistent with the risk appetite statement
|
1.
|
Risk Culture: Risk management is an integral part of the Company’s culture and is embedded in RGA’s business processes in accordance with RGA’s risk philosophy. As the cornerstone of the ERM framework, a culture of prudent risk management reinforced by senior management plays a preeminent role in the effective management of risks assumed by RGA.
|
2.
|
Risk Appetite Statement: A general and high level overview of the risk profile RGA aims to achieve to meet its strategic objectives. This statement is then supported by more granular risk limits guiding the businesses to achieve this Risk Appetite Statement.
|
3.
|
Risk Limits: Risk Limits establish the maximum amount of defined risk that the Company is willing to assume to remain within the Company’s overall risk appetite. These risks have been identified by the management of the Company as relevant to manage the overall risk profile of the Company while allowing achievement of strategic objectives.
|
4.
|
Risk Assessment Process: RGA uses qualitative and quantitative methods to assess key risks through a portfolio approach, which analyzes established and emerging risks in conjunction with other risks.
|
5.
|
Business Specific Limits/Controls: These limits/controls provide additional safeguards against undesired risk exposures and are embedded in business processes. Examples include maximum retention limits, pricing and underwriting reviews, per issuer limits, concentration limits, and standard treaty language.
|
(dollars in millions)
|
|
June 30, 2017
|
|
December 31, 2016
|
||||
No guarantee minimum benefits
|
|
$
|
939
|
|
|
$
|
731
|
|
GMDB only
|
|
179
|
|
|
58
|
|
||
GMIB only
|
|
23
|
|
|
5
|
|
||
GMAB only
|
|
28
|
|
|
28
|
|
||
GMWB only
|
|
1,358
|
|
|
1,334
|
|
||
GMDB / WB
|
|
339
|
|
|
335
|
|
||
Other
|
|
35
|
|
|
19
|
|
||
Total variable annuity account values
|
|
$
|
2,901
|
|
|
$
|
2,510
|
|
Fair value of liabilities associated with living benefit riders
|
|
$
|
162
|
|
|
$
|
185
|
|
|
|
Total Number of Shares
Purchased (1)
|
|
Average Price Paid per
Share
|
|
Total Number of Shares
Purchased as Part of
Publicly Announced Plans
or Programs (1)
|
|
Maximum Number (or
Approximate Dollar
Value) of Shares that May
Yet Be Purchased Under
the Plan or Program
|
||||||
April 1, 2017 -
April 30, 2017 |
|
1,409
|
|
|
$
|
127.23
|
|
|
—
|
|
|
$
|
400,000,000
|
|
May 1, 2017 -
May 31, 2017 |
|
56,278
|
|
|
$
|
127.18
|
|
|
—
|
|
|
$
|
400,000,000
|
|
June 1, 2017 -
June 30, 2017 |
|
1,201
|
|
|
$
|
127.95
|
|
|
—
|
|
|
$
|
400,000,000
|
|
(1)
|
RGA had no repurchases of common stock under its share repurchase program for April, May and June 2017. The Company net settled - issuing 4,146, 145,234 and 4,135 shares from treasury and repurchasing from recipients 1,409, 56,278 and 1,201 shares in April, May and June, respectively, in settlement of income tax withholding requirements incurred by the recipients of an equity incentive award.
|
|
|
Reinsurance Group of America, Incorporated
|
|
Date: August 2, 2017
|
|
By:
|
/s/ Anna Manning
|
|
|
|
Anna Manning
|
|
|
|
President & Chief Executive Officer
|
|
|
|
(Principal Executive Officer)
|
Date: August 2, 2017
|
|
By:
|
/s/ Todd C. Larson
|
|
|
|
Todd C. Larson
|
|
|
|
Senior Executive Vice President & Chief Financial Officer
|
|
|
|
(Principal Financial and Accounting Officer)
|
|
|
|
Exhibit
Number
|
|
Description
|
|
|
|
3.1
|
|
Amended and Restated Articles of Incorporation, incorporated by reference to Exhibit 3.1 of Current Report on Form 8-K filed November 25, 2008.
|
|
|
|
3.2
|
|
Amended and Restated Bylaws, incorporated by reference to Exhibit 3.1 of Current Report on Form 8-K filed July 18, 2014.
|
|
|
|
10.1
|
|
Letter of Credit Reimbursement Agreement, dated as of May 17, 2017, by and between Reinsurance Group of America, Incorporated and Crédit Agricole Corporate and Investment Bank, incorporated by reference to Exhibit 10.1 of Current Report on Form 8-K filed May 19, 2017.
|
|
|
|
10.2
|
|
Reinsurance Group of America, Incorporated Amended & Restated Flexible Stock Plan, effective May 23, 2017, incorporated by reference to Exhibit 10.1 of Current Report on Form 8-K filed May 24, 2017.
|
|
|
|
10.3
|
|
Reinsurance Group of America, Incorporated Amended & Restated Flexible Stock Plan for Directors, effective May 23, 2017, incorporated by reference to Exhibit 10.2 of Current Report on Form 8-K filed May 24, 2017.
|
|
|
|
10.4
|
|
Reinsurance Group of America, Incorporated Amended & Restated Phantom Stock Plan for Directors, effective May 23, 2017, incorporated by reference to Exhibit 10.3 of Current Report on Form 8-K filed May 24, 2017.
|
|
|
|
31.1
|
|
Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to section 302 of the Sarbanes-Oxley Act of 2002.
|
|
|
|
31.2
|
|
Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to section 302 of the Sarbanes-Oxley Act of 2002.
|
|
|
|
32.1
|
|
Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to section 906 of the Sarbanes-Oxley Act of 2002.
|
|
|
|
32.2
|
|
Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to section 906 of the Sarbanes-Oxley Act of 2002.
|
|
|
|
101.INS
|
|
XBRL Instance Document
|
|
|
|
101.SCH
|
|
XBRL Taxonomy Extension Schema Document
|
|
|
|
101.CAL
|
|
XBRL Taxonomy Extension Calculation Linkbase Document
|
|
|
|
101.LAB
|
|
XBRL Taxonomy Extension Label Linkbase Document
|
|
|
|
101.PRE
|
|
XBRL Taxonomy Extension Presentation Linkbase Document
|
|
|
|
101.DEF
|
|
XBRL Taxonomy Extension Definition Linkbase Document
|
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 |
---|---|---|---|
Business Experience: Mr. Cheng is President and Chief Executive Officer of the Company. He has been Chief Executive Officer since January 1, 2024 and was named President in January 2023. Prior to this appointment Mr. Cheng was Executive Vice President, Head of EMEA, Asia, and Australia for RGA Reinsurance Company, providing executive oversight for the Company's EMEA, Asia and Australia operations. Mr. Cheng joined RGA in 1997 as Chief Actuary of Malaysian Life Reinsurance Group Berhad. In 2004, he was named Chief Executive Officer of the Hong Kong office, responsible for all business activity in Hong Kong and Southeast Asia, and in 2011, he was named Senior Vice President, Asia. Mr. Cheng received a Bachelor of Economics (B.Ec.) degree from Macquarie University in Sydney, Australia and an M.B.A. from Washington University in St. Louis's John M. Olin School of Business. He is a Fellow of the Institute of Actuaries of Australia (FIAA) and past President of the Actuarial Society of Hong Kong. He has also served as a council member for the Society and as a past Chair of its Experience and Life Committees. | |||
Business Experience: Mr. Van Wyk is the former Group Chief Information Officer (CIO) of HSBC Bank PLC and currently serves on the Board of Directors for Genworth Financial, Inc. Throughout his 40-year career, he held senior-level domestic and international information technology roles, including CIO of PNC Financial Services Group, Inc., Global CIO of ING Groep N.V., and multiple roles with Morgan Stanley, including several years as CIO and Chief Operating Officer of its Individual Investor Group. Mr. Van Wyk holds a B.A. in Business Management and Accounting with a minor in Computer Science from the University of Central Iowa and was awarded an honorary Doctorate of Public Service from Central College in 2019. He is a Certified Public Accountant, Certified Internal Auditor and a Series 27 Financial/Operations Principal. Mr. Van Wyk chairs the Board of the Banking Industry Architecture Network, a non-profit seeking to establish a common architecture framework for enabling banking interoperability. | |||
Business Experience: Mr. Thomas is the Founder and Managing Partner of The Copia Group (Copia), a private investment firm which provides bespoke capital solutions for lower middle market companies. Prior to launching Copia, Mr. Thomas served as President of Northern Trust Asset Management, a leading global investment manager with then $1.3 trillion in assets under management and served as a member of the executive management group at Northern Trust Corporation. His executive roles included Head of FlexShares ETFs, President of Northern Trust Securities, and Head of Corporate Strategy. Prior to joining Northern Trust Corporation, Mr. Thomas worked at Goldman Sachs and Morgan Stanley in their sales, trading and research divisions. He holds a Bachelor of Science (B.S.) degree in accounting from Florida A&M University and an M.B.A. from the University of Chicago Booth School of Business. He is a trustee for Rush University and the Griffin Museum of Science and Industry. In 2020, Mr. Thomas was recognized by Savoy Magazine as one of the Most Influential Black Executives in Corporate America. In 2021, he was named to ThinkAdvisor's class of industry luminaries, and InvestmentNews honored him with a lifetime achievement award. | |||
Business Experience: Ms. Albo is the Chief Executive Officer of Hamilton Insurance Group ("Hamilton"), a Bermuda-based global specialty insurer and property and casualty reinsurer. She also serves on the Hamilton board of directors. Prior to joining Hamilton, she spent 25 years at Munich Re, starting as a claims expert and holding increasingly senior positions that culminated in roles as President, Reinsurance Division, Munich Re America and later Member of the Board of Executive Management. She began her career as a lawyer after having earned law degrees in both Canada and France. | |||
Business Experience: Ms. Guinn was the Managing Director of Risk and Financial Services and a member of the executive leadership team at Towers Watson from 2010 until her retirement in 2015. Previously, she served as a Member of the Board and the Managing Director of Risk and Financial Services at Towers Watson's predecessor company, Towers Perrin. Overall, she has over 40 years of experience in the insurance industry. Ms. Guinn is a member of the board of directors of Constellation Insurance GP LLC and various of its subsidiaries, where she chairs the audit committees. Ms. Guinn is an Association Member of BUPA, a leading international healthcare group, and advisory board member of EOS Ventura Partners. She previously served on the boards of Allied World Assurance, AssetMark Financial, and Assurance Company Holdings AG. Additionally, Ms. Guinn is a fellow of the Society of Actuaries, a member of the American Academy of Actuaries and a Chartered Enterprise Risk Analyst. | |||
Business Experience: Ms. Bang was the Deputy Chief Executive Officer of Eastspring Investments, the Asia asset management arm of Prudential plc. During her time with Prudential, she concurrently served as executive team member responsible for digital innovation and technology integration throughout the firm. Prior to her role with Prudential, Ms. Bang held senior leadership roles and board seats in Asia for Deutsche Asset Management (now DWS Group). She has been active in new economy innovation as an investor, judge and advisor to entrepreneurs in the health, education and fintech space. She has a Bachelor of Arts degree from Cornell University. | |||
Business Experience: Mr. Tran was the President and CEO of Aviation Capital Group, one of the largest global aviation leasing companies until his retirement in 2020. Previously, he spent 25 years with Pacific Life Insurance Company, one of the largest life insurance and annuity companies in the U.S., during which time he served in a number of senior executive roles, including President, Chief Investment Officer, Chief Financial Officer, head of Mergers and Acquisitions, and Treasurer. Mr. Tran graduated from Whittier College with a BA in economics and political science. He has an MBA in finance and marketing from the Anderson School of Business at UCLA. Mr. Tran has served on several corporate boards, including CIT Group, Aviation Capital Group, Pacific Life Insurance Company, and Scottish Re. He is currently a trustee for Semester at Sea, a collegiate study abroad program. He also served on the board of advisors for the Argyros College of Business and Economics at Chapman University. Mr. Tran founded and is currently chair emeritus of the Orange County, California chapter of Ascend Leadership, the largest Pan-Asian professional membership organization in North America, dedicated to developing, elevating and increasing Pan-Asian executive leaders and board members. | |||
Business Experience: Mr. Cheng is President and Chief Executive Officer of the Company. He has been Chief Executive Officer since January 1, 2024 and was named President in January 2023. Prior to this appointment Mr. Cheng was Executive Vice President, Head of EMEA, Asia, and Australia for RGA Reinsurance Company, providing executive oversight for the Company's EMEA, Asia and Australia operations. Mr. Cheng joined RGA in 1997 as Chief Actuary of Malaysian Life Reinsurance Group Berhad. In 2004, he was named Chief Executive Officer of the Hong Kong office, responsible for all business activity in Hong Kong and Southeast Asia, and in 2011, he was named Senior Vice President, Asia. Mr. Cheng received a Bachelor of Economics (B.Ec.) degree from Macquarie University in Sydney, Australia and an M.B.A. from Washington University in St. Louis's John M. Olin School of Business. He is a Fellow of the Institute of Actuaries of Australia (FIAA) and past President of the Actuarial Society of Hong Kong. He has also served as a council member for the Society and as a past Chair of its Experience and Life Committees. | |||
Business Experience: Ms. McNeilage was the Regional Managing Director, EMEA, for Northern Trust Corporation's Asset Management division from 2015 to 2018 and a Director of Northern Trust Global Investment Ltd. Prior to joining Northern Trust, Ms. McNeilage held a variety of roles with Northill Capital Partners from 2012 to 2015, including interim CEO for one of Northill's affiliates. Prior to that, she spent two years as Head of Funds Management for QIC, a major sovereign wealth fund based in Australia. From 2001 to 2009 Ms. McNeilage was with Principal Global Investors, during which she served in leadership positions around the world and was a member of several boards. Prior to Principal, Ms. McNeilage spent more than a decade with Towers Perrin (now Willis Towers Watson), including a three-year term on its board of directors. Ms. McNeilage received a Bachelor of Science from the University of Lancaster, England, with majors in Mathematics, Economics, and Operations Research. She is a Fellow of the Institute and Faculty of Actuaries, a Fellow of the Institute of Actuaries of Australia, and a Board Leadership Fellow of the National Association of Corporate Directors (U.S.). Ms. McNeilage holds certificates in cybersecurity from both Carnegie Mellon University and Harvard University. Ms. McNeilage also serves on the Board of Directors of Everest Group, Ltd. (NYSE: EG). | |||
Business Experience: Ms. Rand is the retired Chief Financial Officer of Primerica (NYSE: PRI), an insurance, investment, and financial services distribution firm with more than 150,000 independent agents. She joined Primerica in 1995 and was promoted through finance roles with increasing responsibilities and scope before being named Executive Vice President and Chief Financial Officer in 2000. In addition to leading a 130-person finance team, she served as a member of the company's four-person Executive Team, with responsibility for strategic planning, organizational wellness, and board relationships. Ms. Rand led Primerica through the company's IPO in 2010. She is a certified public accountant and served as a senior auditor with KPMG in Atlanta before joining Primerica. Ms. Rand is an Independent Director of Regions Financial Corporation (NYSE: RF) and a member of that board's Audit and Technology Committees. She previously served as an Independent Director and Audit Committee member of Warburg Pincus Capital Corporation I-A (NYSE: WPCA), a special purpose acquisition company from 2021 until its dissolution in 2023. Ms. Rand also serves on community boards such as Girl Scouts of Greater Atlanta and Camp Twin Lakes. She earned a B.S. in accounting from the University of Florida and is actively involved with her alma mater. Ms. Rand is a member of the University's National Foundation Board and formerly served as Audit Committee Chair. She currently serves as Chair of the Dean's Advisory Council at the University's Warrington College of Business. |
Five Elements of Executive Compensation (page
50
)
|
|||||||||||||||||
Element | Form | Key Features | |||||||||||||||
1. | Base Salary | Cash | ● | The only fixed compensation element, intended to attract and retain top talent. | |||||||||||||
● | Generally, we target base salary around the median of our peer companies, but this varies with individual skills, experience, responsibilities, performance and location. | ||||||||||||||||
● | Represents 19.0%* of the average named executive officer target total compensation for 2024. | ||||||||||||||||
2. |
Annual Bonus
Plan |
Cash | ● | Annual cash performance incentive earned based on Company performance against preset business goals as well as business unit and individual performance. | |||||||||||||
● | Payouts range from 0% of target payout to 200% of target payout, depending on performance. | ||||||||||||||||
● |
The Annual Bonus Plan Company-wide performance was evaluated on the following financial objectives: adjusted operating income per share excluding notable items; (ii) new business embedded value and (iii) annual adjusted consolidated revenue; non-financial objectives were measured via an assessment of a strategic scorecard of performance in five focus areas for 2024: Elevate Creation Re; Unlock Enterprise Value; Technology; Talent, Culture, & Sustainability and Investor Value & Story. See page
53
for a description of those components. Performance goals are established in the first quarter of each year.
|
||||||||||||||||
● | Represents 26.8%* of the average named executive officer target total compensation for 2024. | ||||||||||||||||
3. |
Performance
Contingent Share Awards |
Equity | ● |
Equity-based incentives are earned based on Company performance against preset multi-year financial goals, and strengthen the alignment of our executives' interests with those of our long-term shareholders.
|
|||||||||||||
● | Performance goals established at the beginning of each three-year cycle and fully vest after three years. | ||||||||||||||||
● | Payouts range from 0% of target payout to 200% of target payout, depending on Company performance. | ||||||||||||||||
● |
For 2024 awards, the Company measured financial performance over a three-year period, consistent with historical practice. Performance is based on three-year average adjusted return on equity and cumulative change in fair value of funds withheld embedded derivatives and (ii) three-year book value per share, excluding accumulated other comprehensive income and cumulative change in fair value of funds withheld embedded derivatives, growth rate. These results may be modified up or down by a maximum of 20% based on peer company relative total shareholder return.
|
||||||||||||||||
● | Performance contingent share awards represent 75% of the long-term incentive compensation grant for the President and CEO, and 60% for other named executive officers receiving annual grants for 2024 awards. | ||||||||||||||||
● | Performance contingent share awards represented 28.1%* of the average named executive officer target total compensation for 2024. | ||||||||||||||||
4. |
Stock Based
Awards |
Equity | ● | Intended to motivate performance, discourage excessive risk-taking, align our named executive officers' interests with those of our long-term shareholders' interests and promote retention. | |||||||||||||
● | Stock appreciation rights awarded in 2024 and after vest ratably over a three-year period. | ||||||||||||||||
● | Stock appreciation rights represented 14.5%* of the average named executive officer target total compensation for 2024. | ||||||||||||||||
● | Restricted share units awarded in 2024 and later vest ratably over a three-year period. | ||||||||||||||||
● | Restricted share units represented 11.6%* of the average named executive officer target total compensation for 2024. | ||||||||||||||||
5. | Retirement and Pension Benefits | Deferred Cash | ● |
Intended to provide a competitive level of post-employment income as part of a total rewards package that supports our ability to attract and retain key members of our management.
|
|||||||||||||
● | In the U.S. there are two types of plans: qualified plans and non-qualified plans. | ||||||||||||||||
● | Qualified plans are provided to eligible employees up to specified maximum amounts as determined by federal tax authorities. | ||||||||||||||||
● | Non-qualified plans are provided to eligible employees who earn compensation above the maximum amounts established by federal tax authorities. | ||||||||||||||||
*Calculation excludes pension and retirement benefits. Average percentages are rounded. |
Customers
Customer name | Ticker |
---|---|
Globe Life Inc. | GL |
Globe Life Inc. | GL |
No Suppliers Found
Price
Yield
Owner | Position | Direct Shares | Indirect Shares |
---|---|---|---|
Manning Anna | - | 86,271 | 0 |
LARSON TODD C | - | 48,437 | 0 |
LARSON TODD C | - | 43,676 | 0 |
CHENG TONY KIN SHUN | - | 23,131 | 0 |
Hayden John W. | - | 17,074 | 0 |
Hayden John W. | - | 15,482 | 0 |
HUTTON WILLIAM L | - | 15,465 | 0 |
HUTTON WILLIAM L | - | 13,625 | 0 |
GAUTAM ALKA | - | 12,090 | 0 |
Guinn Patricia Lynn | - | 9,970 | 0 |
Wainwright Simon | - | 9,519 | 0 |
PORTER JONATHAN | - | 8,388 | 0 |
PORTER JONATHAN | - | 5,817 | 0 |
Kleeman Raymond | - | 2,554 | 0 |
Kleeman Raymond | - | 1,818 | 0 |
HERRMANN RONALD | - | 440 | 0 |