William Penn Life, 2014 (49. évfolyam, 1-12. szám)

2014-04-01 / 4. szám

Actuary's Report for 2013

Emphasis on safety

WPA members should feel very proud of the Association and its financial strength to guarantee their benefits

by R. E. Bruce, FCA, MAAA

William Penn Association continues its long history of outstanding service to members while maintaining an increasingly strong margin of safety to members. Certain highlights from the financial reports to the regulatory authorities and the actuarial report to the officers and directors should be summarized for the benefit of the members. All numbers herein are taken from the official reports as filed. References are rounded for convenience.

Emphasis in 2013 was, again, on controlled growth and development. The program was eminently successful. Assets increased by 12 percent while premium income remained strong at over $39,000,000. At the same time, profits increased to $2,340,000 before dividends. This increase is attributable to careful management of investments, favorable persistency and favorable mortality expenses.

The year 2013 continued the Association's long history of returning to the members the highest possible benefits consistent with safety. The major lines of business were again profitable. This is a fine record. The members should feel very proud of WPA and its financial strength to guarantee their benefits. WPA continues its emphasis on safety to members.

The strong financial position of WPA should be emphasized. No WPA member suffered any loss in benefit value or reduction in dividends nor experienced a rate increase because of market fluctuations. By contrast, many persons insured in commercial companies, under variable indexed or market value adjustment contracts, experienced a loss in policy value of 30 to 50 percent. Many Universal Life plans imposed rate increases. WPA continues to be a very safe, secure place to hold money for future delivery.

Assets at over $327,000,000 continue to be valued very conservatively, are of exceptionally high quality and fully comply with the strict standards of the National Association of Insurance Commissioners.

All members can continue to have confidence that the assets standing behind their policies are sound and will provide the required funds when needed.

The safety margin at Dec. 31, 2013, continued at the very high level of 109.4 percent. This means that the Association held over $109 of admissible assets behind each $100 of liabilities as a safeguard and guarantee to all members that the benefits promised in the certificates will be paid when due. The Association enjoys a stronger safety margin than most of the very large companies. This strong safety margin will continue for the benefit of all members, even into the next generation.

The Association enjoyed a very favorable year from investments. The net rate of return on mean assets was 5.76 percent, which supports the generous rates paid to members. During 2013, the Association earned net investment income of $17,350,000 after deducting all investment expenses. Investment income exceeded requirements by $7,614,000 in 2013. Excess interest continued to be the most important profit source to the Association.

In addition to the excellent investment returns, it is worth noting that the Association increased its Security Valuation Reserves, to guard against adverse fluctuation in investments, to $4,470,000. The members' assets are well protected by this strong safety fund.

The Association has set aside $295,645,000 of life, annuity and A&H reserves, deposits and claims for future payments to members. Management continues its prudent and conservative practice of setting aside sufficient funds with which to meet all known and contingent liabilities. WPA is doing an outstanding job of managing the members' funds.

12 0 April 2014 0 William Penn Life