Crowning The Winners In The 2004 Townsend OLIMPIC Games
The quadrennial Summer Olympic Games held in Athens may have finished recently, but Fred Townsend?s seventh OLIMPIC (Overall Life Insurance Measures of Performance for Insurance Companies) Games are being contested right here in National Underwriter.
New readers (new subscribers since 2001) may find this article “Greek to them,” but we assure you of one thing: This article will not be Spartan in distributing medals.
Competition is limited to the 100 largest U.S. life insurers (each exceeding $4 billion in invested assets at 12/31/03), and awards are based on 2003 operating results.
AGC Life, essentially a holding company for various American General life insurance companies, took advantage of its unique corporate structure to win gold medals in 7 of the 23 events. AGC Life?s assets are 96% invested in subsidiary life insurers and 4% invested in high quality bonds.
Had AGC Life been eliminated from the competition for performance-enhancing subsidiary transactions, or for steroid bonds, both Swiss Re and United Healthcare would have been declared winners of 3 events each. However, no protests were filed by the Chief Athletic Officers of any competitors.
Therefore, AGC Life won 7 gold medals, Swiss Re Life & Health won 2 gold medals, and 14 companies each won one gold medal in the 2004 OLIMPIC Games.
In the race for total medals, AGC Life won 8 medals. Six companies each won 3: AFLAC, American National, Jefferson-Pilot, Nationwide Life and Annuity, Swiss Re and United Healthcare. Nine companies each won 2 medals, and 25 companies each won one.
What follows are the results in each of the contested categories.
High Jump: Companies build the highest ratio of total surplus (statutory surplus, asset valuation reserve and interest maintenance reserve) to assets at risk (invested assets less policy loans). Western & Southern Life was dethroned by AGC Life after winning the 3 previous gold medals. Among the more traditional life insurers, Hartford Life & Accident won silver in 2004 after winning bronze in 2000.
Long Jump: Largest percent gain in total surplus from 1999 to 2003. Swiss Re Life & Health won on the strength of surplus infusions and mergers during the last 4 years.
Hop, Skip and Jump: In the triple jump, companies may change their asset mix, restructure their liabilities and raise surplus, to create a high Risk-Based Capital ratio. Farmers New World won in 2004, while State Farm captured its third consecutive bronze medal.
100 Meter Dash: Companies turning over their bond portfolio quickest in 2003.
Guardian Life had a 64% turnover ratio in 2003, edging out ING Life & Annuity.
Marathon: Companies turning over their bond portfolio slowest in 2003. AGC Life won the gold medal, while silver medalist American National won its fifth medal in the last 5 OLIMPIC GAMES.
Steeplechase: Companies stepping through treacherous investment choices to build an investment portfolio with the lowest Asset Valuation Reserve requirements (lowest ratio of Maximum AVR to Total Surplus). AGC Life also won this event due to its unique corporate structure.
Shot Put: Longest movement in invested assets. Federal Kemper increased its invested assets by 179%, by coinsuring Kemper Investors Life Insurance Company.
Javelin Toss: Longest movement in direct premiums written. Swiss Re increased its direct premiums written by 310%, by acquiring Lincoln National Re and Swiss-Am Re and increasing its nominal base of direct premiums written.