William Penn Life, 2009 (44. évfolyam, 1-12. szám)
2009-04-01 / 4. szám
ANNUAL ACTUARY’S REPORT Strong and secure Strong surplus, sound management keep members’ policies secure by Robert E. Bruce, FCA, MAAA William Penn Association continues its long history of profitable operations and outstanding service 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. The year 2008 continued the Association's long history of 41 years of successful and profitable operations. William Penn Association continues the policy of returning to the members the highest possible benefits consistent with safety. The major lines of business, life and annuity were again profitable. This is a fine record. The members should feel very proud of WPA and its financial strength to guarantee their benefits. The cataclysmic upheavals in the financial markets made the year 2008 one of the most difficult in the history of the Fraternal Industry. Yet, the strong surplus position of WPA meant that no member lost any value in any annuity or life policy. Further, the rates credited for dividends on life policies and excess interest credits on annuity policies are not affected by the downturn in the capital markets. Future dividend and interest credits will continue to be determined according to the same sound management principles as have governed in the past. In contrast, many policies in other carriers sustained heavy losses, sometimes as much as 40 percent, because of variable, indexed, market value adjustments or other provisions of risk, not found in WPA policies. Assets at $186,748,000 continue to be valued very conservatively, are of very 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 solvency ratio at December 31, 2008 continues to be very strong at 113.09 percent. This means that the Association held $113.09 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. Although the solvency ratio is slightly lower than the 2007 ratio, due to the capital markets, etc., 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 6.09 percent, which supports the generous rates paid to members. During 2008, the Association earned net investment income of $10,918,000 after deducting all investment expenses. Investment income exceeded requirements by $4,336,000 in 2008. 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 maintains $1,302,000 in Security Valuation Reserves to guard against adverse fluctuation in investments. The members' assets are well protected by this strong safety fund. The Association has set aside $160,543,000 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. William Penn Association is doing an outstanding job of managing the members' funds. An important index of service to members is the total amount paid to members. During 2008, the Association paid the significant amount of $15,014,000. A summary of these payments to members for the past two years is as follows: ITEM 2007 2008 Death Claims $1,701,000 $1,888,000 Matured Endowments 119,000 114,000 Emergency Cash Surrender Benefits 608,000 534,000 A&H Supplementary Payments 24,000 21,000 Annuity and Old Age Benefits 10,756,000 7,789,000 Excess Interest on Funds to Members' Acct. 4,391,000 4,336,000 Dividends 340.000 332.000 Benefits to Members $17,939,000 $15,014,000 WPA is rendering a truly valuable financial service to members. 14 William Penn Life, April 2009
