ANNUAL REPORT 2015 Building on Yesterday, Pioneering Tomorrow
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ANNUAL REPORT2015
Building on Yesterday, Pioneering Tomorrow
15-613-00000
Our f inancial s treng th i s our pol icyholders’ f inancial secur ity.
C o v e r p h o t o : D o w n t o w n L i n c o l n , N e b r a s k a 1 8 0 0 s c o u r t e s y o f U n i v e r s i t y o f N e b r a s k a A r c h i v e s
Assurity Center 2015
P e o p l e u s i n g b u s i n e s s a s a f o r c e f o r g o o d
B Corp is a status, and it’s awarded by the U.S.-based nonprofi t B Lab. It’s to businesswhat fair trade certifi cation is to coff ee, ora USDA Organic certifi cation is to milk.Th rough a yearlong application process,they assess a company’s impact on itsemployees, suppliers, community and theenvironment against a set of standards forsocial and environmental performance,accountability and transparency.
More than ever, and especially in this digital age, people want to do business with people and organizations that they trust. Th is fundamental truth speaks to the heart of why B Corp is important.
It’s a testament from an independent third party showing we’re about more than making money. We care about all our stakeholders, policyholders, distribution, employees and the community. We are cognizant of our need to support the greater good and the environment. And we fully believe in using business as a force for good.
Arbor Day 2015 – Assurity’s Sustainability Task Force oversaw the planting of fi ve Shumard oaks along the bike trail behind our building. Each tree represents 25 yearsof Assurity history.
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P R E S I D E N T ’ S L E T T E R
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M A N A G E M E N T T E A M A N D2 0 1 5 B Y T H E N U M B E R S
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F I N A N C I A L H I G H L I G H T S
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S U P E R H E R O E S
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B O A R D O F D I R E C T O R S
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B C O R P O R A T I O N
CONTENTS
B u i l d i n g o n Ye s t e r d a yP i o n e e r i n g To m o r r o w
2 0 1 5 : A s s u r i t y b e c o m e s a c e r t i f i e d B C o r p
Ye s , p r o f i t s a r e i m p o r t a n t . B u t w e a l s o r e c o g n i z e o u r g r e a t e r c o r p o r a t e s o c i a l r e s p o n s i b i l i t y t o o u r e m p l o y e e s , t h e c o m m u n i t y a n d t h e e n v i r o n m e n t .
Dear Policyholders and Friends:
Every day I am proud of Assurity and what we do for clients, our associates and our communities. We remain, like our founders 125 years ago, purpose driven and principles led. No matter what the future holds, we will face it with confi dence and ultimately prosper. Th is is our history and our legacy.
One of our founders’ guiding principles was the importance of maintaining unquestioned fi nancial strength. Th is year, our surplus reached $348 million and our absolute level of capital and all our capital ratios were at record levels and much higher than industry average. Our investment portfolio is also pristine. Our high risk assets, at 2.2 percent of total investment assets, are indicative of a very conservative investment portfolio.
We have always striven to grow and change with the times, and in 2015, we undertook a number of new ventures. First, we acquired a majority interest in Resourcing Edge, Inc. (REI), a professional employer organization in Rockwall, Texas. We are excited about this new growth potential and the synergies with our basic business, and we welcome CEO Ted Crawford and his management team to the Assurity family.
We also formally established Assurity Real Estate Development Corp. (ADEV). Assurity has had a long successful history in real estate investment and development, and ADEV will bring greater focus to this work.
Innovative disruption is impacting many industries, including life and health insurance. To stay abreast of new developments in the Fintech space, we have formed Assurity Ventures, Inc. (AVI). AVI’s purpose is to partner or invest in promising Fintech startups. We also elected Ryan Downs, CEO of Proxibid, and David Graff , CEO of Hudl, to our board at our May annual meeting. Both are successful technology entrepreneurs, and I believe they will provide valuable insight in the years ahead.
O n e o f o u r f o u n d e r s ’ g u i d i n g p r i n c i p l e s w a s t h e i m p o r t a n c e o f m a i n t a i n i n g
u n q u e s t i o n e d f i n a n c i a l s t r e n g t h .
4 P R E S I D E N T ’ S L E T T E R 2 0 1 5 B Y T H E N U M B E R S
s p e n t b y v o l u n t e e r sc o l l e c t i n g l i t t e ro n t h e A n t e l o p e
Va l l e y T r a i l
180 HOURS
t a k e n b y e m p l o y e e s d u r i n g
t h e We a r a b l eWe l l n e s s c h a l l e n g e
185,446,280STEPS
d e l i v e r e d b y o u r M e a l s o n W h e e l s
v o l u n t e e r s
1,040 MEALS
176,000 DOLLARS
p l e d g e d t o U n i t e dWa y a n d
C o m m u n i t y H e a l t h
13
Assurity Center 2015
No matter what the future holds, we will face itwith confi dence and ultimately prosper.
THIS IS OUR HISTORY AND OUR LEGACY
I’m also pleased to report that aft er a year-long eff ort, Assurity became a certifi ed B Corporation. B Corp status is awarded by the U.S.-based non-profi t B Lab, which assesses a company’s impact on its employees, suppliers, community and the environment against a set of standards for social and environmental performance, accountability and transparency. We are delighted to be the fi rst major life and specialty health insurer to join a global movement to redefi ne success in business, alongside companies like Patagonia, Ben & Jerry’s and Warby Parker glasses.
Becoming a certifi ed B Corp is consistent with Assurity’s status as a mutual company. Yes, profi ts are important. But we also recognize our greater corporate social responsibility to our employees, the community and the environment.
One important key to our 125 years of success is to have engaged associates in the home offi ce. A Gallup Association engagement survey conducted last October showed we rank in the 91st percentile of all companies Gallup surveys worldwide. We were also again voted one of Lincoln’s best places to work in the large employer category. In the long run, any company wins by being able to attract and retain the best and the brightest talent.
Finally, all of us at Assurity extend our sincere appreciation to two members of our board of directors who retired this year: Dr. Jim McClurg and Frank Hilsabeck, both of whom gave wise counsel and insights benefi tting Assurity for many years. We sincerely thank them for their dedicated service.
Tom HenningChairman, President and Chief Executive Offi cer
5M A N A G E M E N T T E A M12
Chief Executive Offi cerTh omas E. Henning, CLU, ChFC, CFAChairman, President and CEO
Senior Vice PresidentsSusan L. Keisler-Munro, FSA, MAAASenior Vice President, Chief of Operations
Todd W. Reimers, CLU, LLIFSenior Vice President, Chief Marketing and Sales Offi cer
David T. Wallman, FSA, MAAA, CLU, FLMISenior Vice President, Product Management and Chief Actuary
Vice PresidentsChad M. Bodner, RHUVice President, Worksite Sales
Marvin P. Ehly, FSA, MAAAVice President, Chief Financial Offi cer and Treasurer
Nicholas B. JasaVice President, Individual Sales
Patrick J. Kenney, CLU, ChFCVice President, Regional Sales Manager
David D. Lockwood, CFAVice President, Chief Investment Offi cer
Eric L. OttersteinVice President, Chief Information Offi cer
Carol S. Watson, J.D., CLU, FLMIVice President, General Counsel and Secretary
Senior DirectorsKevin G. Faltin, CPASenior Director and Controller
Kevin W. Hammond, CLU, FLMISenior Director, Investments
Steven H. HillSenior Director, Real Estate Lending and Investments
Keith K. Spilker, FSA, MAAA, CLU, ChFCSenior Director, Corporate Actuarial
Victor D. Weber, CFA, ChFCSenior Director, Investments
Brett D. WestSenior Director, Real Estate Development
DirectorsSusan M. Becker, PHR, FLMIDirector, Human Resources
Tara D. Benson, FSA, MAAAAssociate Actuary
Eunice J. Cramer, FLMI, ACSDirector, Client Services
Patricia J. Criger, ACS, UNDDirector, New Business Services
Jason L. Damme, FSA, MAAAAssociate Actuary
Amanda A. Dutton, J.D., FLMIDirector and Chief Compliance Offi cer
Heith L. FulmerDirector, Employer-Sponsored Services
Abhilesh GandhiDirector, Soft ware Development
Michael J. Harshman, ASADirector, Product Development and Reporting
Timothy S. JanousekDirector, Network Operations
Samuel E. Kruse, ALHC, FLMI, ACSChief Investigator, Claims Management
Mitch K. Lee, CPA, CIADirector, Internal Audit
Mary L. Lenners, FLMIDirector, Claims Management
Susan M. Otterstein, FLMIDirector, Project Management
Bruce K. Scheiber, FLMI, ACSDirector, Underwriting Services
John A. Sharp, J.D.Director, Deputy General Counsel
Kirk J. Spellman, FLMI, ACSDirector, Media
$3
47
.7 M
6
which includes the Asset Valuation Reserve (AVR), is one of the key indicators of a company’s long-term fi nancial strength and stability. Assurity’s 2015 total surplus of $347.7 million was nearly $17 million more than 2014.
T O T A L S U R P L U S ,
B O A R D O F D I R E C T O R S
Photos are listed in order from top to bottom, left to right
Lyn Wallin ZiegenbeinDirector Emerita Peter Kiewit Foundation Omaha, Nebraska
Steven D. ErwinPresident, Nebraska/Western IowaU.S. Bank National Association Lincoln, Nebraska
Paul M. SchudelPartnerWoods & Aitken LLP Lincoln, Nebraska
Ryan D. DownsCEO of ProxibidOmaha, Nebraska
Marc E. LeBaronChairman, CEO Lincoln Industries Lincoln, Nebraska
David Graff CEO of HudlLincoln, Nebraska
Caren L. HamiltonAuto Dealership Executive Bellevue and Kearney, Nebraska
William R. CintaniPresident, CEO Mapes Industries Lincoln, Nebraska
Angela L. MuhleisenPresident, CEOUnion Bank & Trust Company Lincoln, Nebraska
Kathleen A. Farrell, PhDChair of the Finance DepartmentCollege of Business Administration University of NebraskaLincoln, Nebraska
Th omas E. HenningChairman, President, CEO Assurity Life Insurance CompanyLincoln, Nebraska
11
P R E M I U M SA N D D E P O S I T S
$191.0MILLION
O P E R A T I N G I N C O M E *
$38.3 MILLION
S U R P L U S A N D AV R
$347.7 MILLION
P O L I C Y H O L D E R D I V I D E N D S D E C L A R E D
$17.4 MILLION
B E N E F I T S P A I D T O
P O L I C Y H O L D E R S
$195.9
PERCENTL I F E
I N S U R A N C E I N F O R C E
$15.6 BILLION
T O T A L A S S E T S
$2.5 BILLION
S U R P L U S A N D AV R A S P E R C E N T
O F A S S E T S
14 N E T G A I N F R O M
O P E R A T I O N S
$20.8 MILLION
F I N A N C I A L H I G H L I G H T S
MILLION
7
F o r m o r e f i n a n c i a l i n f o r m a t i o n , v i s i t w w w . a s s u r i t y . c o m* b e f o r e t a x e s a n d d i v i d e n d s t o p o l i c y h o l d e r s
2 0 1 5 B O A R D O F D I R E C T O R S
E T H I C A LB E H AV I O R
I N N O VA T I O N
THE YEAROF SUPERHEROES
2 0 1 5
As part of our 125th anniversary in 2015, we recognized some of our superheroes in the home offi ce and distribution, who exemplify our key values: ethical behavior, extraordinary associates, innovation, relationships and fi nancial strength.
It has been our good fortune to have many heroes over the years, who through hard work, integrity, and all-around superhuman decency, greatly contributed to reaching this important anniversary milestone.F I N A N C I A L
S T R E N G T H
R E L A T I O N S H I P S
E X T R A O R D I N A R Y A S S O C I A T E S
"A s s u r i t y a n d i t s p r e d e c e s s o r c o m p a n i e s h a v e b e e n a p i l l a r o f s t r e n g t h i n t h e i n s u r a n c e i n d u s t r y f o r w e l l o v e r a c e n t u r y , t h a n k s t o t h e p e o p l e w h o h a v e e m b o d i e d t h e v a l u e s a n d m i s s i o n o f o u r c o m p a n y — o u r h e r o e s ! " — T h o m a s E . H e n n n i n g
98
E T H I C A LB E H AV I O R
I N N O VA T I O N
THE YEAROF SUPERHEROES
2 0 1 5
As part of our 125th anniversary in 2015, we recognized some of our superheroes in the home offi ce and distribution, who exemplify our key values: ethical behavior, extraordinary associates, innovation, relationships and fi nancial strength.
It has been our good fortune to have many heroes over the years, who through hard work, integrity, and all-around superhuman decency, greatly contributed to reaching this important anniversary milestone.F I N A N C I A L
S T R E N G T H
R E L A T I O N S H I P S
E X T R A O R D I N A R Y A S S O C I A T E S
"A s s u r i t y a n d i t s p r e d e c e s s o r c o m p a n i e s h a v e b e e n a p i l l a r o f s t r e n g t h i n t h e i n s u r a n c e i n d u s t r y f o r w e l l o v e r a c e n t u r y , t h a n k s t o t h e p e o p l e w h o h a v e e m b o d i e d t h e v a l u e s a n d m i s s i o n o f o u r c o m p a n y — o u r h e r o e s ! " — T h o m a s E . H e n n n i n g
98
P R E M I U M SA N D D E P O S I T S
$191.0MILLION
O P E R A T I N G I N C O M E *
$38.3 MILLION
S U R P L U S A N D AV R
$347.7 MILLION
P O L I C Y H O L D E R D I V I D E N D S D E C L A R E D
$17.4 MILLION
B E N E F I T S P A I D T O
P O L I C Y H O L D E R S
$195.9
PERCENTL I F E
I N S U R A N C E I N F O R C E
$15.6 BILLION
T O T A L A S S E T S
$2.5 BILLION
S U R P L U S A N D AV R A S P E R C E N T
O F A S S E T S
14 N E T G A I N F R O M
O P E R A T I O N S
$20.8 MILLION
F I N A N C I A L H I G H L I G H T S
MILLION
7
F o r m o r e f i n a n c i a l i n f o r m a t i o n , v i s i t w w w . a s s u r i t y . c o m* b e f o r e t a x e s a n d d i v i d e n d s t o p o l i c y h o l d e r s
2 0 1 5 B O A R D O F D I R E C T O R S
$3
47
.7 M
6
which includes the Asset Valuation Reserve (AVR), is one of the key indicators of a company’s long-term fi nancial strength and stability. Assurity’s 2015 total surplus of $347.7 million was nearly $17 million more than 2014.
T O T A L S U R P L U S ,
B O A R D O F D I R E C T O R S
Photos are listed in order from top to bottom, left to right
Lyn Wallin ZiegenbeinDirector Emerita Peter Kiewit Foundation Omaha, Nebraska
Steven D. ErwinPresident, Nebraska/Western IowaU.S. Bank National Association Lincoln, Nebraska
Paul M. SchudelPartnerWoods & Aitken LLP Lincoln, Nebraska
Ryan D. DownsCEO of ProxibidOmaha, Nebraska
Marc E. LeBaronChairman, CEO Lincoln Industries Lincoln, Nebraska
David Graff CEO of HudlLincoln, Nebraska
Caren L. HamiltonAuto Dealership Executive Bellevue and Kearney, Nebraska
William R. CintaniPresident, CEO Mapes Industries Lincoln, Nebraska
Angela L. MuhleisenPresident, CEOUnion Bank & Trust Company Lincoln, Nebraska
Kathleen A. Farrell, PhDChair of the Finance DepartmentCollege of Business Administration University of NebraskaLincoln, Nebraska
Th omas E. HenningChairman, President, CEO Assurity Life Insurance CompanyLincoln, Nebraska
11
I’m also pleased to report that aft er a year-long eff ort, Assurity became a certifi ed B Corporation. B Corp status is awarded by the U.S.-based non-profi t B Lab, which assesses a company’s impact on its employees, suppliers, community and the environment against a set of standards for social and environmental performance, accountability and transparency. We are delighted to be the fi rst major life and specialty health insurer to join a global movement to redefi ne success in business, alongside companies like Patagonia, Ben & Jerry’s and Warby Parker glasses.
Becoming a certifi ed B Corp is consistent with Assurity’s status as a mutual company. Yes, profi ts are important. But we also recognize our greater corporate social responsibility to our employees, the community and the environment.
One important key to our 125 years of success is to have engaged associates in the home offi ce. A Gallup Association engagement survey conducted last October showed we rank in the 91st percentile of all companies Gallup surveys worldwide. We were also again voted one of Lincoln’s best places to work in the large employer category. In the long run, any company wins by being able to attract and retain the best and the brightest talent.
Finally, all of us at Assurity extend our sincere appreciation to two members of our board of directors who retired this year: Dr. Jim McClurg and Frank Hilsabeck, both of whom gave wise counsel and insights benefi tting Assurity for many years. We sincerely thank them for their dedicated service.
Tom HenningChairman, President and Chief Executive Offi cer
5M A N A G E M E N T T E A M12
Chief Executive Offi cerTh omas E. Henning, CLU, ChFC, CFAChairman, President and CEO
Senior Vice PresidentsSusan L. Keisler-Munro, FSA, MAAASenior Vice President, Chief of Operations
Todd W. Reimers, CLU, LLIFSenior Vice President, Chief Marketing and Sales Offi cer
David T. Wallman, FSA, MAAA, CLU, FLMISenior Vice President, Product Management and Chief Actuary
Vice PresidentsChad M. Bodner, RHUVice President, Worksite Sales
Marvin P. Ehly, FSA, MAAAVice President, Chief Financial Offi cer and Treasurer
Nicholas B. JasaVice President, Individual Sales
Patrick J. Kenney, CLU, ChFCVice President, Regional Sales Manager
David D. Lockwood, CFAVice President, Chief Investment Offi cer
Eric L. OttersteinVice President, Chief Information Offi cer
Carol S. Watson, J.D., CLU, FLMIVice President, General Counsel and Secretary
Senior DirectorsKevin G. Faltin, CPASenior Director and Controller
Kevin W. Hammond, CLU, FLMISenior Director, Investments
Steven H. HillSenior Director, Real Estate Lending and Investments
Keith K. Spilker, FSA, MAAA, CLU, ChFCSenior Director, Corporate Actuarial
Victor D. Weber, CFA, ChFCSenior Director, Investments
Brett D. WestSenior Director, Real Estate Development
DirectorsSusan M. Becker, PHR, FLMIDirector, Human Resources
Tara D. Benson, FSA, MAAAAssociate Actuary
Eunice J. Cramer, FLMI, ACSDirector, Client Services
Patricia J. Criger, ACS, UNDDirector, New Business Services
Jason L. Damme, FSA, MAAAAssociate Actuary
Amanda A. Dutton, J.D., FLMIDirector and Chief Compliance Offi cer
Heith L. FulmerDirector, Employer-Sponsored Services
Abhilesh GandhiDirector, Soft ware Development
Michael J. Harshman, ASADirector, Product Development and Reporting
Timothy S. JanousekDirector, Network Operations
Samuel E. Kruse, ALHC, FLMI, ACSChief Investigator, Claims Management
Mitch K. Lee, CPA, CIADirector, Internal Audit
Mary L. Lenners, FLMIDirector, Claims Management
Susan M. Otterstein, FLMIDirector, Project Management
Bruce K. Scheiber, FLMI, ACSDirector, Underwriting Services
John A. Sharp, J.D.Director, Deputy General Counsel
Kirk J. Spellman, FLMI, ACSDirector, Media
Dear Policyholders and Friends:
Every day I am proud of Assurity and what we do for clients, our associates and our communities. We remain, like our founders 125 years ago, purpose driven and principles led. No matter what the future holds, we will face it with confi dence and ultimately prosper. Th is is our history and our legacy.
One of our founders’ guiding principles was the importance of maintaining unquestioned fi nancial strength. Th is year, our surplus reached $348 million and our absolute level of capital and all our capital ratios were at record levels and much higher than industry average. Our investment portfolio is also pristine. Our high risk assets, at 2.2 percent of total investment assets, are indicative of a very conservative investment portfolio. We have always striven to grow and change with the times, and in 2015, we undertook a number of new ventures. First, we acquired a majority interest in Resourcing Edge, Inc. (REI), a professional employer organization in Rockwall, Texas. We are excited about this new growth potential and the synergies with our basic business, and we welcome CEO Ted Crawford and his management team to the Assurity family.
We also formally established Assurity Real Estate Development Corp. (ADEV). Assurity has had a long successful history in real estate investment and development, and ADEV will bring greater focus to this work.
Innovative disruption is impacting many industries, including life and health insurance. To stay abreast of new developments in the Fintech space, we have formed Assurity Ventures, Inc. (AVI). AVI’s purpose is to partner or invest in promising Fintech startups. We also elected Ryan Downs, CEO of Proxibid, and David Graff , CEO of Hudl, to our board at our May annual meeting. Both are successful technology entrepreneurs, and I believe they will provide valuable insight in the years ahead.
O n e o f o u r f o u n d e r s ’ g u i d i n g p r i n c i p l e s w a s t h e i m p o r t a n c e o f m a i n t a i n i n g
u n q u e s t i o n e d f i n a n c i a l s t r e n g t h .
4 P R E S I D E N T ’ S L E T T E R 2 0 1 5 B Y T H E N U M B E R S
s p e n t b y v o l u n t e e r s c o l l e c t i n g l i t t e r o n t h e A n t e l o p e
Va l l e y T r a i l
180 HOURS
t a k e n b y e m p l o y e e s d u r i n g
t h e We a r a b l e We l l n e s s c h a l l e n g e
185,446,280 STEPS
d e l i v e r e d b y o u r M e a l s o n W h e e l s
v o l u n t e e r s
1,040 MEALS
176,000 DOLLARS
p l e d g e d t o U n i t e dWa y a n d
C o m m u n i t y H e a l t h
13
Assurity Center 2015
No matter what the future holds, we will face it with confi dence and ultimately prosper.
THIS IS OUR HISTORY AND OUR LEGACY
0 4 / 0 5
P R E S I D E N T ’ S L E T T E R
1 2 / 1 3
M A N A G E M E N T T E A M A N D2 0 1 5 B Y T H E N U M B E R S
0 6 / 0 7
F I N A N C I A L H I G H L I G H T S
0 8 / 0 9
S U P E R H E R O E S
1 0 / 1 1
B O A R D O F D I R E C T O R S
1 4 / 1 5
B C O R P O R A T I O N
CONTENTS
B u i l d i n g o n Ye s t e r d a yP i o n e e r i n g To m o r r o w
2 0 1 5 : A s s u r i t y b e c o m e s a c e r t i f i e d B C o r p
Ye s , p r o f i t s a r e i m p o r t a n t . B u t w e a l s o r e c o g n i z e o u r g r e a t e r c o r p o r a t e s o c i a l r e s p o n s i b i l i t y t o o u r e m p l o y e e s , t h e c o m m u n i t y a n d t h e e n v i r o n m e n t .
Our f inancial s treng th i s our pol icyholders’ f inancial secur ity.
C o v e r p h o t o : D o w n t o w n L i n c o l n , N e b r a s k a 1 8 0 0 s c o u r t e s y o f U n i v e r s i t y o f N e b r a s k a A r c h i v e s
Assurity Center 2015
P e o p l e u s i n g b u s i n e s s a s a f o r c e f o r g o o d
B Corp is a status, and it’s awarded by the U.S.-based nonprofi t B Lab. It’s to businesswhat fair trade certifi cation is to coff ee, ora USDA Organic certifi cation is to milk.Th rough a yearlong application process,they assess a company’s impact on itsemployees, suppliers, community and theenvironment against a set of standards forsocial and environmental performance,accountability and transparency.
More than ever, and especially in this digital age, people want to do business with people and organizations that they trust. Th is fundamental truth speaks to the heart of why B Corp is important.
It’s a testament from an independent third party showing we’re about more than making money. We care about all our stakeholders, policyholders, distribution, employees and the community. We are cognizant of our need to support the greater good and the environment. And we fully believe in using business as a force for good.
Arbor Day 2015 – Assurity’s Sustainability Task Force oversaw the planting of fi ve Shumard oaks along the bike trail behind our building. Each tree represents 25 yearsof Assurity history.
ANNUAL REPORT2015
Building on Yesterday, Pioneering Tomorrow
15-613-00000
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