National Western Life Group, Inc. Announces 2020 First Quarter Earnings
May 11, 2020 at 16:15 PM EDT
AUSTIN, Texas, May 11, 2020 /PRNewswire/ -- Ross R. Moody, Chairman of the Board, President, and Chief Executive Officer of National Western Life Group, Inc. (Nasdaq: NWLI), announced today a first quarter 2020 consolidated net loss of $2.1 million, or $0.58 per diluted Class A common share, compared with consolidated net earnings of $40.2 million, or $11.37 per diluted Class A common share, for the first quarter of 2019. The Company's book value per share as of March 31, 2020 was $558.43.
Total revenues decreased in the first quarter of 2020 to $52.5 million from $217.9 million in the first quarter of 2019 reflecting net investment losses incurred during the current period. Net investment losses were the result of $138.1 million in unrealized losses for market value changes on unexpired investment options which are purchased to hedge the equity indexing obligation on the Company's fixed indexed policies, a $6.0 million decrease in the fair value of equity securities, and $3.4 million in credit losses driven by the application of the new Current Expected Credit Losses accounting standard. Commenting on the activity Mr. Moody indicated, "The COVID-19 pandemic has introduced a great deal of financial uncertainty and economic disruption which was evidenced by the level of unrealized adjustments to investments we report at fair market value. Somewhat hidden behind this data is positive news as our life insurance sales increased 35% in the first quarter over last year and annuity sales increased 23%."
Pretax earnings decreased $53.6 million in the quarter ended March 31, 2020 from the amount reported in the first quarter of 2019. This amount includes a shift of $53.9 million associated with liability accounting for fixed indexed policy obligations. Mr. Moody commented on the charge saying, "Embedded derivative accounting can produce dramatic swings when equity markets are severely disrupted and volatility spikes. Fortunately, we entered 2020 well-positioned in terms of liquidity, with strong capital ratios and a solid balance sheet."
National Western Life Group, Inc. is the parent organization of National Western Life Insurance Company, which is the parent organization of Ozark National Life Insurance Company, both stock life insurance companies in aggregate offering a broad portfolio of individual universal life, whole life and term insurance plans, as well as annuity products. At March 31, 2020, the Company maintained consolidated total assets of $12.3 billion, consolidated stockholders' equity of $2.0 billion, and combined life insurance inforce of $22.9 billion.
Caution Regarding Forward-Looking Statements:
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SOURCE National Western Life Group, Inc.