Attached files
| file | filename |
|---|---|
| 8-K - FORM 8-K - Symetra Financial CORP | sya-20139308k.htm |
| EX-99.1 - EX-99.1 - Symetra Financial CORP | sya-2013930exhibit991press.htm |
Exhibit 99.2
October 23, 2013 | ||
THIRD QUARTER 2013
Symetra Financial Corporation (SYA)
Financial Supplement
All financial information in this document is unaudited
Symetra Financial Corporation
Financial Supplement
Table of Contents
September 30, 2013
Page | |
Financial Highlights | 1 |
Consolidated Results | |
Consolidated Income Statement Data | 2 |
Consolidated Balance Sheet Data | 3 |
Segment Income Statement Data | 4 |
Segment Results | |
Benefits Division | 5 |
Retirement Division: | |
Deferred Annuities | 6 |
Income Annuities | 7 |
Individual Life Division | 8 |
Other | 9 |
Additional Financial Data | |
Deferred Policy Acquisition Costs (DAC) and Deferred Sales Inducements (DSI) Roll Forwards | 10 |
Account Value and Reserve Roll Forwards | 11 |
Overview of Liabilities and Associated Unrealized Gains | 12 |
Investments Summary | 13 |
Investments Income Statement Data | 14 |
Sales by Segment and Product | 15 |
Book Value, Adjusted Book Value and Statutory Book Value per Share | 16 |
ROE and Operating ROAE | 17 |
Addendum | |
RMBS Prepayment Exposure | 18 |
CMBS Prepayment Exposure | 19 |
European Exposure | 20 |
Symetra Financial Corporation
3Q 2013 Financial Supplement
Financial Highlights
(In millions, except per share or percentage data)
For the Three Months Ended | For the Nine Months Ended | ||||||||||||||||||||||||||
Sep 30, 2013 | Jun 30, 2013 | Mar 31, 2013 | Dec 31, 2012 | Sep 30, 2012 | Sep 30, 2013 | Sep 30, 2012 | |||||||||||||||||||||
Net income | $ | 45.3 | $ | 45.0 | $ | 66.0 | $ | 31.0 | $ | 55.2 | $ | 156.3 | $ | 174.4 | |||||||||||||
Net income per common share 1 | |||||||||||||||||||||||||||
Basic | $ | 0.38 | $ | 0.34 | $ | 0.48 | $ | 0.22 | $ | 0.40 | $ | 1.21 | $ | 1.26 | |||||||||||||
Diluted | $ | 0.38 | $ | 0.34 | $ | 0.48 | $ | 0.22 | $ | 0.40 | $ | 1.21 | $ | 1.26 | |||||||||||||
Weighted-average number of common shares outstanding: | |||||||||||||||||||||||||||
Basic | 117.802 | 133.050 | 138.093 | 138.114 | 138.091 | 129.574 | 137.986 | ||||||||||||||||||||
Diluted | 117.804 | 133.056 | 138.098 | 138.122 | 138.094 | 129.579 | 137.990 | ||||||||||||||||||||
Non-GAAP Financial Measures 2 | |||||||||||||||||||||||||||
Adjusted operating income | $ | 48.9 | $ | 51.4 | $ | 50.4 | $ | 32.9 | $ | 45.9 | $ | 150.7 | $ | 152.4 | |||||||||||||
Adjusted operating income per common share: 1 | |||||||||||||||||||||||||||
Basic | $ | 0.42 | $ | 0.39 | $ | 0.37 | $ | 0.24 | $ | 0.33 | $ | 1.16 | $ | 1.10 | |||||||||||||
Diluted | $ | 0.42 | $ | 0.39 | $ | 0.37 | $ | 0.24 | $ | 0.33 | $ | 1.16 | $ | 1.10 | |||||||||||||
As of | ||||||||||||||||||||
Sep 30, 2013 | Jun 30, 2013 | Mar 31, 2013 | Dec 31, 2012 | Sep 30, 2012 | ||||||||||||||||
Consolidated Balance Sheet Data | ||||||||||||||||||||
Total investments | $ | 27,641.1 | $ | 26,915.0 | $ | 27,437.5 | $ | 27,556.4 | $ | 27,492.3 | ||||||||||
Total assets | 29,784.6 | 29,040.4 | 29,587.8 | 29,460.9 | 29,497.7 | |||||||||||||||
Notes payable | 449.5 | 449.4 | 449.4 | 449.4 | 449.3 | |||||||||||||||
Accumulated other comprehensive income (net of taxes) (AOCI) | 719.0 | 782.6 | 1,293.1 | 1,371.2 | 1,404.3 | |||||||||||||||
Total stockholders' equity | 3,012.8 | 3,040.1 | 3,604.2 | 3,630.1 | 3,641.2 | |||||||||||||||
U.S. Statutory Financial Information: | ||||||||||||||||||||
Statutory capital and surplus | $ | 1,940.6 | $ | 1,921.3 | $ | 1,952.6 | $ | 1,912.6 | $ | 1,906.5 | ||||||||||
Asset valuation reserve (AVR) | 282.5 | 275.7 | 269.9 | 261.3 | 252.2 | |||||||||||||||
Statutory book value | $ | 2,223.1 | $ | 2,197.0 | $ | 2,222.5 | $ | 2,173.9 | $ | 2,158.7 | ||||||||||
Common shares outstanding, end of period | 117.800 | 117.792 | 119.099 | 119.088 | 119.120 | |||||||||||||||
Book value per common share | $ | 25.58 | $ | 25.81 | $ | 26.10 | $ | 26.29 | $ | 26.37 | ||||||||||
Debt to capital ratio | 13.0 | % | 12.9 | % | 11.1 | % | 11.0 | % | 11.0 | % | ||||||||||
Non-GAAP Financial Measures 2 | ||||||||||||||||||||
Adjusted book value (stockholders’ equity excluding AOCI) | $ | 2,293.8 | $ | 2,257.5 | $ | 2,311.1 | $ | 2,258.9 | $ | 2,236.9 | ||||||||||
Adjusted book value per common share : | ||||||||||||||||||||
Adjusted book value per common share 3 | $ | 19.47 | $ | 19.17 | $ | 19.40 | $ | 18.97 | $ | 18.78 | ||||||||||
Adjusted book value per common share, as converted 4 | $ | 19.47 | $ | 19.17 | $ | 18.32 | $ | 17.94 | $ | 17.78 | ||||||||||
Statutory book value per common share 5 | $ | 18.87 | $ | 18.65 | $ | 18.66 | $ | 18.25 | $ | 18.12 | ||||||||||
Debt to capital ratio, excluding AOCI 6 | 16.4 | % | 16.6 | % | 16.3 | % | 16.6 | % | 16.7 | % | ||||||||||
For the Twelve Months Ended | |||||||||||||||
Sep 30, 2013 | Jun 30, 2013 | Mar 31, 2013 | Dec 31, 2012 | Sep 30, 2012 | |||||||||||
ROE | 5.5 | % | 5.7 | % | 5.6 | % | 6.1 | % | 7.6 | % | |||||
Non-GAAP Financial Measure 2 | |||||||||||||||
Operating ROAE 7 | 8.1 | % | 8.0 | % | 7.9 | % | 8.5 | % | 9.5 | % | |||||
1 Basic net income and adjusted operating income per common share include all participating securities using the two-class method. Diluted net income and adjusted operating income per common share include the dilutive impact of non-participating securities, based on the application of the treasury stock method. Shares included in these calculations are weighted for the portion of the period they were outstanding. Antidilutive awards were excluded from the computation of diluted earnings per share. Historically, our outstanding warrants were considered participating securities and included in basic and diluted weighted-average common shares outstanding, assuming the warrants were exercised for the entire 18.976 common shares. For the three and nine months ended September 30, 2013 and the three months ended June 30, 2013, these measures reflect the net-share settlement of the warrants on June 20, 2013, resulting in the issuance of 5.298 common shares. Quarterly earnings per share amounts may not add to the full year amounts.
2 Management considers these non-GAAP measures to be a useful supplement to their most comparable GAAP measure in evaluating financial performance and condition. Non-GAAP measures including adjusted operating income and the corresponding basic and diluted per share amounts, adjusted book value and the corresponding per share amounts, statutory book value per share amounts and operating ROAE have been reconciled to their most directly comparable GAAP measures on pages 2, 16, and 17, respectively.
3 Adjusted book value per common share is calculated as adjusted book value divided by common shares outstanding.
4 Adjusted book value per common share, as converted, gives effect to the exercise of the outstanding warrants in the periods they were outstanding. For periods ended prior to June 30, 2013, it was calculated as adjusted book value plus the assumed proceeds from exercise of warrants, divided by common shares outstanding and shares subject to outstanding warrants. The warrants were net-share settled on June 20, 2013, resulting in the issuance of 5.298 shares of common stock.
5 Statutory book value per common share is calculated based on statutory book value divided by common shares outstanding.
6 Debt to capital ratio, excluding AOCI is calculated as notes payable divided by the sum of notes payable and adjusted book value.
7 Operating ROAE (return on average equity) is calculated based on adjusted operating income divided by average adjusted book value. The numerator and denominator of this measure have been reconciled to net income and stockholders' equity, respectively, their most comparable GAAP measures.
1
Symetra Financial Corporation
3Q 2013 Financial Supplement
Consolidated Income Statement Data
(In millions, except per share data)
For the Three Months Ended | For the Nine Months Ended | |||||||||||||||||||||||||||
Sep 30, 2013 | Jun 30, 2013 | Mar 31, 2013 | Dec 31, 2012 | Sep 30, 2012 | Sep 30, 2013 | Sep 30, 2012 | ||||||||||||||||||||||
Revenues: | ||||||||||||||||||||||||||||
Premiums | 156.0 | $ | 157.4 | $ | 157.0 | $ | 153.8 | $ | 154.1 | $ | 470.4 | $ | 451.2 | |||||||||||||||
Net investment income | 326.4 | 318.6 | 323.7 | 323.2 | 312.3 | 968.7 | 952.0 | |||||||||||||||||||||
Policy fees, contract charges and other | 48.3 | 48.5 | 49.9 | 47.7 | 47.1 | 146.7 | 142.2 | |||||||||||||||||||||
Net realized investment gains (losses): | ||||||||||||||||||||||||||||
Total other-than-temporary impairment losses on securities | (6.6 | ) | (7.8 | ) | (2.6 | ) | (6.4 | ) | (16.0 | ) | (17.0 | ) | (30.7 | ) | ||||||||||||||
Less: portion recognized in other comprehensive income | 0.4 | 0.6 | 0.6 | 2.6 | 2.7 | 1.6 | 5.5 | |||||||||||||||||||||
Net impairment losses recognized in earnings | (6.2 | ) | (7.2 | ) | (2.0 | ) | (3.8 | ) | (13.3 | ) | (15.4 | ) | (25.2 | ) | ||||||||||||||
Other net realized investment gains (losses) | 1.6 | (4.1 | ) | 28.5 | (0.1 | ) | 28.8 | 26.0 | 60.2 | |||||||||||||||||||
Total net realized investment gains (losses) | (4.6 | ) | (11.3 | ) | 26.5 | (3.9 | ) | 15.5 | 10.6 | 35.0 | ||||||||||||||||||
Total revenues | 526.1 | 513.2 | 557.1 | 520.8 | 529.0 | 1,596.4 | 1,580.4 | |||||||||||||||||||||
Benefits and expenses: | ||||||||||||||||||||||||||||
Policyholder benefits and claims | 118.5 | 115.2 | 119.5 | 118.2 | 111.1 | 353.2 | 320.8 | |||||||||||||||||||||
Interest credited | 235.3 | 225.7 | 235.3 | 237.6 | 235.4 | 696.3 | 695.2 | |||||||||||||||||||||
Other underwriting and operating expenses | 90.6 | 91.9 | 91.8 | 96.0 | 88.9 | 274.3 | 264.5 | |||||||||||||||||||||
Interest expense | 8.3 | 8.2 | 8.2 | 8.2 | 8.2 | 24.7 | 24.6 | |||||||||||||||||||||
Amortization of deferred policy acquisition costs | 20.2 | 17.2 | 18.9 | 16.9 | 17.9 | 56.3 | 49.1 | |||||||||||||||||||||
Total benefits and expenses | 472.9 | 458.2 | 473.7 | 476.9 | 461.5 | 1,404.8 | 1,354.2 | |||||||||||||||||||||
Income from operations before income taxes | 53.2 | 55.0 | 83.4 | 43.9 | 67.5 | 191.6 | 226.2 | |||||||||||||||||||||
Provision (benefit) for income taxes: | ||||||||||||||||||||||||||||
Current | 11.3 | 19.6 | 15.7 | 3.9 | (0.3 | ) | 46.6 | 12.0 | ||||||||||||||||||||
Deferred | (3.4 | ) | (9.6 | ) | 1.7 | 9.0 | 12.6 | (11.3 | ) | 39.8 | ||||||||||||||||||
Total provision for income taxes | 7.9 | 10.0 | 17.4 | 12.9 | 12.3 | 35.3 | 51.8 | |||||||||||||||||||||
Net income | $ | 45.3 | $ | 45.0 | $ | 66.0 | $ | 31.0 | $ | 55.2 | $ | 156.3 | $ | 174.4 | ||||||||||||||
Net income per common share: | ||||||||||||||||||||||||||||
Basic | $ | 0.38 | $ | 0.34 | $ | 0.48 | $ | 0.22 | $ | 0.40 | $ | 1.21 | $ | 1.26 | ||||||||||||||
Diluted | $ | 0.38 | $ | 0.34 | $ | 0.48 | $ | 0.22 | $ | 0.40 | $ | 1.21 | $ | 1.26 | ||||||||||||||
Weighted-average number of common shares outstanding: | ||||||||||||||||||||||||||||
Basic | 117.802 | 133.050 | 138.093 | 138.114 | 138.091 | 129.574 | 137.986 | |||||||||||||||||||||
Diluted | 117.804 | 133.056 | 138.098 | 138.122 | 138.094 | 129.579 | 137.990 | |||||||||||||||||||||
Cash dividends declared per common share | $ | 0.09 | $ | 0.08 | $ | 0.08 | $ | 0.07 | $ | 0.07 | $ | 0.25 | $ | 0.21 | ||||||||||||||
Non-GAAP Financial Measures: | ||||||||||||||||||||||||||||
Adjusted operating income | $ | 48.9 | $ | 51.4 | $ | 50.4 | $ | 32.9 | $ | 45.9 | $ | 150.7 | $ | 152.4 | ||||||||||||||
Adjusted operating income per common share: | ||||||||||||||||||||||||||||
Basic | $ | 0.42 | $ | 0.39 | $ | 0.37 | $ | 0.24 | $ | 0.33 | $ | 1.16 | $ | 1.10 | ||||||||||||||
Diluted | $ | 0.42 | $ | 0.39 | $ | 0.37 | $ | 0.24 | $ | 0.33 | $ | 1.16 | $ | 1.10 | ||||||||||||||
Reconciliation to net income: | ||||||||||||||||||||||||||||
Net income | $ | 45.3 | $ | 45.0 | $ | 66.0 | $ | 31.0 | $ | 55.2 | $ | 156.3 | $ | 174.4 | ||||||||||||||
Less: Net realized investment gains (losses) (net of taxes) | (3.0 | ) | (7.3 | ) | 17.2 | (2.6 | ) | 10.1 | 6.9 | 22.8 | ||||||||||||||||||
Add: Net realized gains (losses) — FIA (net of taxes) | 0.6 | (0.9 | ) | 1.6 | (0.7 | ) | 0.8 | 1.3 | 0.8 | |||||||||||||||||||
Adjusted operating income | $ | 48.9 | $ | 51.4 | $ | 50.4 | $ | 32.9 | $ | 45.9 | $ | 150.7 | $ | 152.4 | ||||||||||||||
2
Symetra Financial Corporation
3Q 2013 Financial Supplement
Consolidated Balance Sheet Data
(In millions)
Sep 30, 2013 | Jun 30, 2013 | Mar 31, 2013 | Dec 31, 2012 | Sep 30, 2012 | ||||||||||||||||
Assets | ||||||||||||||||||||
Investments: | ||||||||||||||||||||
Available-for-sale securities: | ||||||||||||||||||||
Fixed maturities, at fair value | $ | 23,306.5 | $ | 22,697.0 | $ | 23,369.6 | $ | 23,519.0 | $ | 23,620.9 | ||||||||||
Marketable equity securities, at fair value | 87.1 | 53.7 | 50.6 | 49.6 | 48.4 | |||||||||||||||
Trading securities: | ||||||||||||||||||||
Marketable equity securities, at fair value | 509.4 | 512.0 | 501.5 | 552.7 | 535.8 | |||||||||||||||
Mortgage loans, net | 3,376.8 | 3,303.1 | 3,170.7 | 3,094.4 | 2,939.8 | |||||||||||||||
Policy loans | 64.2 | 64.4 | 64.7 | 65.8 | 67.0 | |||||||||||||||
Investments in limited partnerships | 253.1 | 236.8 | 235.3 | 239.3 | 242.2 | |||||||||||||||
Other invested assets | 44.0 | 48.0 | 45.1 | 35.6 | 38.2 | |||||||||||||||
Total investments | 27,641.1 | 26,915.0 | 27,437.5 | 27,556.4 | 27,492.3 | |||||||||||||||
Cash and cash equivalents | 121.1 | 171.6 | 301.2 | 130.8 | 238.4 | |||||||||||||||
Accrued investment income | 293.2 | 287.6 | 281.9 | 276.2 | 273.5 | |||||||||||||||
Reinsurance recoverables | 306.1 | 300.1 | 304.5 | 302.1 | 297.5 | |||||||||||||||
Deferred policy acquisition costs | 271.7 | 249.6 | 172.1 | 155.8 | 146.1 | |||||||||||||||
Receivables and other assets | 229.4 | 243.7 | 211.7 | 231.9 | 230.1 | |||||||||||||||
Separate account assets | 922.0 | 872.8 | 878.9 | 807.7 | 819.8 | |||||||||||||||
Total assets | $ | 29,784.6 | $ | 29,040.4 | $ | 29,587.8 | $ | 29,460.9 | $ | 29,497.7 | ||||||||||
Liabilities and stockholders’ equity | ||||||||||||||||||||
Funds held under deposit contracts | $ | 24,074.7 | $ | 23,485.7 | $ | 23,228.8 | $ | 23,068.5 | $ | 22,963.0 | ||||||||||
Future policy benefits | 394.6 | 390.9 | 390.9 | 390.6 | 390.5 | |||||||||||||||
Policy and contract claims | 165.4 | 163.9 | 148.2 | 162.2 | 159.7 | |||||||||||||||
Other policyholders’ funds | 171.9 | 129.4 | 122.1 | 113.9 | 112.1 | |||||||||||||||
Notes payable | 449.5 | 449.4 | 449.4 | 449.4 | 449.3 | |||||||||||||||
Deferred income tax liabilities, net | 266.5 | 304.1 | 588.6 | 628.9 | 637.8 | |||||||||||||||
Other liabilities | 327.2 | 204.1 | 176.7 | 209.6 | 324.3 | |||||||||||||||
Separate account liabilities | 922.0 | 872.8 | 878.9 | 807.7 | 819.8 | |||||||||||||||
Total liabilities | 26,771.8 | 26,000.3 | 25,983.6 | 25,830.8 | 25,856.5 | |||||||||||||||
Preferred stock | — | — | — | — | — | |||||||||||||||
Common stock | 1.2 | 1.2 | 1.2 | 1.2 | 1.2 | |||||||||||||||
Additional paid-in-capital | 1,463.9 | 1,462.4 | 1,460.7 | 1,459.3 | 1,458.5 | |||||||||||||||
Treasury stock | (93.4 | ) | (93.4 | ) | (4.2 | ) | — | — | ||||||||||||
Retained earnings | 922.1 | 887.3 | 853.4 | 798.4 | 777.2 | |||||||||||||||
Accumulated other comprehensive income, net of taxes | 719.0 | 782.6 | 1,293.1 | 1,371.2 | 1,404.3 | |||||||||||||||
Total stockholders’ equity | 3,012.8 | 3,040.1 | 3,604.2 | 3,630.1 | 3,641.2 | |||||||||||||||
Total liabilities and stockholders’ equity | $ | 29,784.6 | $ | 29,040.4 | $ | 29,587.8 | $ | 29,460.9 | $ | 29,497.7 | ||||||||||
3
Symetra Financial Corporation
3Q 2013 Financial Supplement
Segment Income Statement Data
(In millions)
For the Three Months Ended | For the Nine Months Ended | |||||||||||||||||||||||||||
Sep 30, 2013 | Jun 30, 2013 | Mar 31, 2013 | Dec 31, 2012 | Sep 30, 2012 | Sep 30, 2013 | Sep 30, 2012 | ||||||||||||||||||||||
Operating revenues: | ||||||||||||||||||||||||||||
Benefits Division | $ | 156.1 | $ | 157.2 | $ | 156.6 | $ | 153.7 | $ | 152.3 | $ | 469.9 | $ | 447.9 | ||||||||||||||
Retirement Division: | ||||||||||||||||||||||||||||
Deferred Annuities | 151.7 | 140.1 | 151.5 | 146.4 | 141.8 | 443.3 | 421.6 | |||||||||||||||||||||
Income Annuities | 98.6 | 99.1 | 103.6 | 102.3 | 102.6 | 301.3 | 314.4 | |||||||||||||||||||||
Individual Life Division | 115.3 | 112.4 | 111.3 | 110.8 | 113.0 | 339.0 | 339.4 | |||||||||||||||||||||
Other | 9.9 | 14.3 | 10.1 | 10.5 | 4.9 | 34.3 | 23.2 | |||||||||||||||||||||
Operating revenues | 531.6 | 523.1 | 533.1 | 523.7 | 514.6 | 1,587.8 | 1,546.5 | |||||||||||||||||||||
Add: Net realized investment gains (losses) — excluding FIA | (5.5 | ) | (9.9 | ) | 24.0 | (2.9 | ) | 14.4 | 8.6 | 33.9 | ||||||||||||||||||
Revenues | $ | 526.1 | $ | 513.2 | $ | 557.1 | $ | 520.8 | $ | 529.0 | $ | 1,596.4 | $ | 1,580.4 | ||||||||||||||
Segment pre-tax adjusted operating income (loss): | ||||||||||||||||||||||||||||
Benefits Division | $ | 15.2 | $ | 16.3 | $ | 13.5 | $ | 12.4 | $ | 16.7 | $ | 45.0 | $ | 58.1 | ||||||||||||||
Retirement Division: | ||||||||||||||||||||||||||||
Deferred Annuities | 23.9 | 25.4 | 30.7 | 29.1 | 24.0 | 80.0 | 73.6 | |||||||||||||||||||||
Income Annuities | 7.1 | 10.0 | 8.8 | 5.1 | 8.6 | 25.9 | 39.9 | |||||||||||||||||||||
Individual Life Division | 15.8 | 14.5 | 11.2 | 5.5 | 13.8 | 41.5 | 41.5 | |||||||||||||||||||||
Other | (3.3 | ) | (1.3 | ) | (4.8 | ) | (5.3 | ) | (10.0 | ) | (9.4 | ) | (20.8 | ) | ||||||||||||||
Pre-tax adjusted operating income 1 | 58.7 | 64.9 | 59.4 | 46.8 | 53.1 | 183.0 | 192.3 | |||||||||||||||||||||
Add: Net realized investment gains (losses) — excluding FIA | (5.5 | ) | (9.9 | ) | 24.0 | (2.9 | ) | 14.4 | 8.6 | 33.9 | ||||||||||||||||||
Income from operations before income taxes | $ | 53.2 | $ | 55.0 | $ | 83.4 | $ | 43.9 | $ | 67.5 | $ | 191.6 | $ | 226.2 | ||||||||||||||
1 Pre-tax adjusted operating income is a non-GAAP measure, calculated as adjusted operating income on a pre-tax basis. It also represents the cumulative total of segment pre-tax adjusted operating income, which at the segment level is a GAAP measure. Income from operations before income taxes is the most directly comparable measure to pre-tax adjusted operating income.
4
Symetra Financial Corporation
3Q 2013 Financial Supplement
Benefits Division
(In millions)
For the Three Months Ended | For the Nine Months Ended | |||||||||||||||||||||||||||
Sep 30, 2013 | Jun 30, 2013 | Mar 31, 2013 | Dec 31, 2012 | Sep 30, 2012 | Sep 30, 2013 | Sep 30, 2012 | ||||||||||||||||||||||
Operating revenues: | ||||||||||||||||||||||||||||
Premiums | $ | 147.4 | $ | 148.6 | $ | 148.0 | $ | 145.5 | $ | 144.9 | $ | 444.0 | $ | 423.3 | ||||||||||||||
Net investment income | 5.2 | 5.2 | 5.1 | 5.5 | 5.5 | 15.5 | 16.2 | |||||||||||||||||||||
Policy fees, contract charges and other | 3.5 | 3.4 | 3.5 | 2.7 | 1.9 | 10.4 | 8.4 | |||||||||||||||||||||
Total operating revenues | 156.1 | 157.2 | 156.6 | 153.7 | 152.3 | 469.9 | 447.9 | |||||||||||||||||||||
Benefits and expenses: | ||||||||||||||||||||||||||||
Policyholder benefits and claims | 99.2 | 98.5 | 101.4 | 98.5 | 94.9 | 299.1 | 271.8 | |||||||||||||||||||||
Other underwriting and operating expenses | 41.7 | 42.4 | 41.7 | 42.8 | 40.7 | 125.8 | 118.0 | |||||||||||||||||||||
Total benefits and expenses | 140.9 | 140.9 | 143.1 | 141.3 | 135.6 | 424.9 | 389.8 | |||||||||||||||||||||
Segment pre-tax adjusted operating income | $ | 15.2 | $ | 16.3 | $ | 13.5 | $ | 12.4 | $ | 16.7 | $ | 45.0 | $ | 58.1 | ||||||||||||||
Operating Metrics: | ||||||||||||||||||||||||||||
Loss ratio 1 | 67.3 | % | 66.2 | % | 68.5 | % | 67.7 | % | 65.5 | % | 67.4 | % | 64.2 | % | ||||||||||||||
Expense ratio 2 | 28.1 | % | 28.5 | % | 28.1 | % | 28.3 | % | 27.9 | % | 28.2 | % | 27.8 | % | ||||||||||||||
Combined ratio 3 | 95.4 | % | 94.7 | % | 96.6 | % | 96.0 | % | 93.4 | % | 95.6 | % | 92.0 | % | ||||||||||||||
Medical stop-loss — loss ratio 4 | 67.2 | % | 66.0 | % | 69.2 | % | 66.2 | % | 66.4 | % | 67.5 | % | 64.7 | % | ||||||||||||||
Total sales 5 | $ | 19.0 | $ | 21.3 | $ | 66.5 | $ | 25.7 | $ | 31.3 | $ | 106.8 | $ | 133.6 | ||||||||||||||
Premiums: | ||||||||||||||||||||||||||||
Medical stop-loss | $ | 127.2 | $ | 129.2 | $ | 129.0 | $ | 128.3 | $ | 128.1 | $ | 385.4 | $ | 376.1 | ||||||||||||||
Limited benefit medical | 13.3 | 13.0 | 13.0 | 13.4 | 13.6 | 39.3 | 37.6 | |||||||||||||||||||||
Group life & disability and other | 6.9 | 6.4 | 6.0 | 3.8 | 3.2 | 19.3 | 9.6 | |||||||||||||||||||||
Total premiums earned | $ | 147.4 | $ | 148.6 | $ | 148.0 | $ | 145.5 | $ | 144.9 | $ | 444.0 | $ | 423.3 | ||||||||||||||
5 Year Historical Loss Ratio 1: | For the Three Months Ended | For the Year Ended | |||||||||||||
1Q | 2Q | 3Q | 4Q | ||||||||||||
2012 | 61.6 | % | 65.5 | % | 65.5 | % | 67.7 | % | 65.1 | % | |||||
2011 | 67.6 | % | 62.4 | % | 63.6 | % | 59.6 | % | 63.1 | % | |||||
2010 | 68.9 | % | 63.8 | % | 66.5 | % | 60.5 | % | 64.9 | % | |||||
2009 | 70.1 | % | 66.1 | % | 67.3 | % | 69.9 | % | 68.3 | % | |||||
2008 | 71.0 | % | 66.3 | % | 59.4 | % | 66.6 | % | 65.8 | % | |||||
1 Loss ratio represents policyholder benefits and claims incurred divided by premiums earned.
2 Expense ratio is equal to other underwriting and operating expenses of our insurance operations divided by premiums earned.
3 Combined ratio is equal to the sum of the loss ratio and the expense ratio.
4 Medical stop-loss loss ratio represents medical stop-loss policyholder benefits and claims incurred divided by medical stop-loss premiums earned.
5 Total sales represents annualized first-year premiums net of first year policy lapses.
5
Symetra Financial Corporation
3Q 2013 Financial Supplement
Retirement Division — Deferred Annuities
(In millions)
For the Three Months Ended | For the Nine Months Ended | |||||||||||||||||||||||||||
Sep 30, 2013 | Jun 30, 2013 | Mar 31, 2013 | Dec 31, 2012 | Sep 30, 2012 | Sep 30, 2013 | Sep 30, 2012 | ||||||||||||||||||||||
Operating revenues: | ||||||||||||||||||||||||||||
Net investment income | $ | 145.0 | $ | 136.2 | $ | 143.2 | $ | 142.0 | $ | 135.6 | $ | 424.4 | $ | 405.2 | ||||||||||||||
Policy fees, contract charges and other | 5.8 | 5.3 | 5.8 | 5.4 | 5.1 | 16.9 | 15.3 | |||||||||||||||||||||
Net realized gains (losses) — FIA | 0.9 | (1.4 | ) | 2.5 | (1.0 | ) | 1.1 | 2.0 | 1.1 | |||||||||||||||||||
Total operating revenues | 151.7 | 140.1 | 151.5 | 146.4 | 141.8 | 443.3 | 421.6 | |||||||||||||||||||||
Benefits and expenses: | ||||||||||||||||||||||||||||
Policyholder benefits and claims | 0.2 | 0.2 | — | — | — | 0.4 | — | |||||||||||||||||||||
Interest credited | 86.6 | 80.8 | 82.9 | 82.5 | 85.2 | 250.3 | 248.2 | |||||||||||||||||||||
Other underwriting and operating expenses | 23.3 | 19.6 | 21.7 | 20.6 | 19.5 | 64.6 | 59.7 | |||||||||||||||||||||
Amortization of deferred policy acquisition costs | 17.7 | 14.1 | 16.2 | 14.2 | 13.1 | 48.0 | 40.1 | |||||||||||||||||||||
Total benefits and expenses | 127.8 | 114.7 | 120.8 | 117.3 | 117.8 | 363.3 | 348.0 | |||||||||||||||||||||
Segment pre-tax adjusted operating income | $ | 23.9 | $ | 25.4 | $ | 30.7 | $ | 29.1 | $ | 24.0 | $ | 80.0 | $ | 73.6 | ||||||||||||||
Operating Metrics: | ||||||||||||||||||||||||||||
Fixed account values, excluding FIA — General account | $ | 10,790.0 | $ | 10,631.1 | $ | 10,681.4 | $ | 10,688.5 | $ | 10,722.9 | $ | 10,790.0 | $ | 10,722.9 | ||||||||||||||
Fixed account values, FIA — General account | 1,321.8 | 852.0 | 539.1 | 374.9 | 264.3 | 1,321.8 | 264.3 | |||||||||||||||||||||
Variable account values — Separate account | 792.3 | 758.8 | 766.6 | 723.3 | 734.3 | 792.3 | 734.3 | |||||||||||||||||||||
Interest spread 1 | 2.05 | % | 1.97 | % | 2.23 | % | 2.10 | % | 1.83 | % | 2.08 | % | 1.88 | % | ||||||||||||||
Base earned yield 2 | 4.60 | % | 4.67 | % | 4.70 | % | 4.81 | % | 4.82 | % | 4.65 | % | 4.87 | % | ||||||||||||||
Base credited rate 2 | 2.88 | % | 2.87 | % | 2.87 | % | 3.03 | % | 3.04 | % | 2.87 | % | 3.03 | % | ||||||||||||||
Base interest spread 2 | 1.72 | % | 1.80 | % | 1.83 | % | 1.78 | % | 1.78 | % | 1.78 | % | 1.84 | % | ||||||||||||||
Total sales 3 | $ | 747.1 | $ | 441.5 | $ | 322.0 | $ | 300.8 | $ | 166.5 | $ | 1,510.6 | $ | 845.8 | ||||||||||||||
1 Interest spread excludes FIA and is the difference between the net investment yield and the credited rate to policyholders. The net investment yield is the approximate yield on invested assets. The credited rate is the approximate rate credited on policyholder fixed account values. Interest credited is subject to contractual terms, including minimum guarantees. Interest is credited on a daily basis and therefore quarters with more/less days of interest reduces/increases interest spread and base interest spread.
2 Base interest spread excludes FIA and is the interest spread adjusted to exclude items that can vary significantly from period to period due to a number of factors and, therefore, may contribute to results that are not indicative of the underlying trends. This is primarily the impact of asset prepayments, such as bond make-whole premiums net of related deferred sales inducement amortization and the MBS prepayment speed adjustment. Interest is credited on a daily basis and therefore quarters with more/less days of interest reduces/increases interest spread and base interest spread.
3 Total sales represent deposits for new policies net of first year policy lapses and/or surrenders.
Fixed Account Values — General Account by Contract Minimum Interest Guarantees as of September 30, 2013:
Contract Minimum Interest Guarantee 2 | ||||||
> 3.5% 1 | <= 3.5% > 1.5% | <= 1.5% | ||||
Fixed account values — General account (including FIA) | $1,108.9 | $977.7 | $9,972.3 | |||
1 The maximum interest is 4.5% on a $122.4 block of business.
2 Excludes standard non-forfeiture impacts.
6
Symetra Financial Corporation
3Q 2013 Financial Supplement
Retirement Division—Income Annuities
(In millions)
For the Three Months Ended | For the Nine Months Ended | |||||||||||||||||||||||||||
Sep 30, 2013 | Jun 30, 2013 | Mar 31, 2013 | Dec 31, 2012 | Sep 30, 2012 | Sep 30, 2013 | Sep 30, 2012 | ||||||||||||||||||||||
Operating revenues: | ||||||||||||||||||||||||||||
Net investment income | $ | 98.4 | $ | 98.9 | $ | 101.7 | $ | 100.4 | $ | 100.9 | $ | 299.0 | $ | 309.5 | ||||||||||||||
Policy fees, contract charges and other | 0.2 | 0.2 | 1.9 | 1.9 | 1.7 | 2.3 | 4.9 | |||||||||||||||||||||
Total operating revenues | 98.6 | 99.1 | 103.6 | 102.3 | 102.6 | 301.3 | 314.4 | |||||||||||||||||||||
Benefits and expenses: | ||||||||||||||||||||||||||||
Interest credited | 85.7 | 82.7 | 88.5 | 90.9 | 87.7 | 256.9 | 255.1 | |||||||||||||||||||||
Other underwriting and operating expenses | 4.9 | 5.4 | 5.4 | 5.6 | 5.4 | 15.7 | 17.0 | |||||||||||||||||||||
Amortization of deferred policy acquisition costs | 0.9 | 1.0 | 0.9 | 0.7 | 0.9 | 2.8 | 2.4 | |||||||||||||||||||||
Total benefits and expenses | 91.5 | 89.1 | 94.8 | 97.2 | 94.0 | 275.4 | 274.5 | |||||||||||||||||||||
Segment pre-tax adjusted operating income | $ | 7.1 | $ | 10.0 | $ | 8.8 | $ | 5.1 | $ | 8.6 | $ | 25.9 | $ | 39.9 | ||||||||||||||
Operating Metrics: | ||||||||||||||||||||||||||||
Reserves 1 | $ | 6,484.6 | $ | 6,512.7 | $ | 6,546.6 | $ | 6,566.5 | $ | 6,576.7 | $ | 6,484.6 | $ | 6,576.7 | ||||||||||||||
Interest spread 2 | 0.61 | % | 0.60 | % | 0.66 | % | 0.47 | % | 0.56 | % | 0.62 | % | 0.61 | % | ||||||||||||||
Base earned yield 3 | 6.02 | % | 6.06 | % | 6.01 | % | 6.05 | % | 6.04 | % | 6.03 | % | 6.10 | % | ||||||||||||||
Base credited rate 3 | 5.49 | % | 5.49 | % | 5.55 | % | 5.60 | % | 5.52 | % | 5.51 | % | 5.56 | % | ||||||||||||||
Base interest spread 3 | 0.53 | % | 0.57 | % | 0.46 | % | 0.45 | % | 0.52 | % | 0.52 | % | 0.54 | % | ||||||||||||||
MBS prepayment speed adjustment 4 | $ | — | $ | 0.1 | $ | — | $ | 0.2 | $ | 0.2 | $ | 0.1 | $ | 0.4 | ||||||||||||||
Mortality gains (losses) 5 | 1.1 | 4.5 | 1.0 | (0.9 | ) | 2.0 | 6.6 | 13.8 | ||||||||||||||||||||
Total sales 6 | 38.9 | 45.5 | 40.7 | 57.6 | 49.5 | 125.1 | 200.6 | |||||||||||||||||||||
5 Year Historical Mortality Gains (Losses): 5 | For the Three Months Ended | For the Year Ended | ||||||||||||||||||
1Q | 2Q | 3Q | 4Q | |||||||||||||||||
2012 | $ | 5.4 | $ | 6.4 | $ | 2.0 | $ | (0.9 | ) | $ | 12.9 | |||||||||
2011 | 0.7 | 4.9 | (1.4 | ) | (3.9 | ) | 0.3 | |||||||||||||
2010 | (0.1 | ) | (1.8 | ) | (0.1 | ) | (0.6 | ) | (2.6 | ) | ||||||||||
2009 | 4.3 | (0.5 | ) | — | 1.3 | 5.1 | ||||||||||||||
2008 | 2.0 | 0.8 | 0.7 | (1.4 | ) | 2.1 | ||||||||||||||
1 Reserves represent the present value of future income annuity benefits and assumed expenses, discounted by the assumed interest rate. This metric represents the amount of our in-force book of business.
2 Interest spread is the difference between the net investment yield and the credited rate to policyholders. The net investment yield is the approximate yield on invested assets, excluding equities, in the general account attributed to the segment. The credited rate is the approximate rate credited on policyholder reserves.
3 Base interest spread is the interest spread adjusted to exclude items that can vary significantly from period to period due to a number of factors and, therefore, may contribute to yields that are not indicative of the underlying trends. This is primarily the impact of asset prepayments, such as bond make-whole premiums and the MBS prepayment speed adjustment. The fourth quarter 2012 credited rate includes a $1.1 reserve adjustment, which increased base credited rate and decreased base interest spread six basis points.
4 MBS prepayment speed adjustment is the impact to net investment income due to the change in prepayment speeds on the underlying collateral of mortgage-backed securities.
5 Mortality gains (losses) represent the difference between actual and expected reserves released on our life contingent annuities.
6 Total sales represent deposits for new policies net of first year policy lapses and/or surrenders.
7
Symetra Financial Corporation
3Q 2013 Financial Supplement
Individual Life Division
(In millions)
For the Three Months Ended | For the Nine Months Ended | |||||||||||||||||||||||||||
Sep 30, 2013 | Jun 30, 2013 | Mar 31, 2013 | Dec 31, 2012 | Sep 30, 2012 | Sep 30, 2013 | Sep 30, 2012 | ||||||||||||||||||||||
Operating revenues: | ||||||||||||||||||||||||||||
Premiums | $ | 8.6 | $ | 8.8 | $ | 9.0 | $ | 8.3 | $ | 9.2 | $ | 26.4 | $ | 27.9 | ||||||||||||||
Net investment income | 72.6 | 69.7 | 69.2 | 69.9 | 71.1 | 211.5 | 214.5 | |||||||||||||||||||||
Policy fees, contract charges and other | 34.1 | 33.9 | 33.1 | 32.6 | 32.7 | 101.1 | 97.0 | |||||||||||||||||||||
Total operating revenues | 115.3 | 112.4 | 111.3 | 110.8 | 113.0 | 339.0 | 339.4 | |||||||||||||||||||||
Benefits and expenses: | ||||||||||||||||||||||||||||
Policyholder benefits and claims | 19.1 | 16.5 | 18.1 | 19.7 | 16.2 | 53.7 | 49.0 | |||||||||||||||||||||
Interest credited | 63.4 | 62.8 | 64.2 | 64.8 | 62.9 | 190.4 | 193.4 | |||||||||||||||||||||
Other underwriting and operating expenses | 15.4 | 16.5 | 16.0 | 18.8 | 16.2 | 47.9 | 48.9 | |||||||||||||||||||||
Amortization of deferred policy acquisition costs | 1.6 | 2.1 | 1.8 | 2.0 | 3.9 | 5.5 | 6.6 | |||||||||||||||||||||
Total benefits and expenses | 99.5 | 97.9 | 100.1 | 105.3 | 99.2 | 297.5 | 297.9 | |||||||||||||||||||||
Segment pre-tax adjusted operating income | $ | 15.8 | $ | 14.5 | $ | 11.2 | $ | 5.5 | $ | 13.8 | $ | 41.5 | $ | 41.5 | ||||||||||||||
Operating Metrics: | ||||||||||||||||||||||||||||
Individual insurance: | ||||||||||||||||||||||||||||
Insurance in force 1 | $ | 35,070.4 | $ | 35,215.5 | $ | 35,455.3 | $ | 35,777.4 | $ | 36,050.0 | $ | 35,070.4 | $ | 36,050.0 | ||||||||||||||
Claims 2 | 14.0 | 13.7 | 15.7 | 16.3 | 13.9 | 43.4 | 44.7 | |||||||||||||||||||||
Annualized mortality rate 3 | 0.16 | % | 0.16 | % | 0.18 | % | 0.18 | % | 0.15 | % | 0.17 | % | 0.17 | % | ||||||||||||||
UL account value 4 | $ | 717.6 | $ | 714.5 | $ | 716.2 | $ | 716.0 | $ | 717.3 | $ | 717.6 | $ | 717.3 | ||||||||||||||
UL interest spread 5 | 2.44 | % | 1.93 | % | 1.97 | % | 1.58 | % | 1.44 | % | 2.11 | % | 1.61 | % | ||||||||||||||
UL base interest spread 6 | 1.41 | % | 1.43 | % | 1.49 | % | 1.51 | % | 1.58 | % | 1.43 | % | 1.64 | % | ||||||||||||||
Sales 7 | $ | 3.9 | $ | 3.0 | $ | 2.3 | $ | 1.3 | $ | 1.6 | $ | 9.2 | $ | 7.8 | ||||||||||||||
Institutional Markets: | ||||||||||||||||||||||||||||
Insurance in force 1 | $ | 12,799.8 | $ | 12,715.4 | $ | 12,685.0 | $ | 12,602.9 | $ | 12,635.0 | $ | 12,799.8 | $ | 12,635.0 | ||||||||||||||
BOLI account value 4 | 4,764.8 | 4,732.8 | 4,696.4 | 4,659.8 | 4,621.9 | 4,764.8 | 4,621.9 | |||||||||||||||||||||
BOLI ROA 8 | 0.78 | % | 0.90 | % | 0.84 | % | 0.71 | % | 1.07 | % | 0.84 | % | 1.02 | % | ||||||||||||||
BOLI base ROA 9 | 0.64 | % | 0.85 | % | 0.83 | % | 0.66 | % | 1.02 | % | 0.77 | % | 0.95 | % | ||||||||||||||
BOLI sales 10 | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | $ | 2.0 | ||||||||||||||
COLI single premium sales 10 | 0.7 | 0.3 | 2.4 | — | — | 3.4 | — | |||||||||||||||||||||
COLI recurring premium sales 11 | 0.4 | 3.0 | — | — | — | 3.4 | — | |||||||||||||||||||||
5 Year Historical Individual Claims: | For the Year | ||||||||||||||
For the Three Months Ended | Ended | ||||||||||||||
1Q | 2Q | 3Q | 4Q | ||||||||||||
2012 | 15.7 | 15.1 | 13.9 | 16.3 | 61.0 | ||||||||||
2011 | 15.7 | 12.1 | 13.0 | 13.5 | 54.3 | ||||||||||
2010 | 13.9 | 13.5 | 12.0 | 11.3 | 50.7 | ||||||||||
2009 | 14.7 | 13.4 | 12.8 | 12.6 | 53.5 | ||||||||||
2008 | 14.3 | 13.6 | 13.7 | 12.1 | 53.7 | ||||||||||
1 Insurance in force represents dollar face amounts of policies without adjustment for reinsurance.
2 Individual claims represents incurred claims, net of reinsurance, on our term and universal life policies.
3 Annualized mortality rate is defined as annualized individual claims divided by insurance in force.
4 UL account value and BOLI account value represent our liabilities to our policyholders.
5 UL interest spread excludes SPL and is the difference between the net investment yield and the credited rate to policyholders. The net investment yield is the approximate yield on invested assets in the general account attributed to UL policies. The credited rate is the approximate rate credited on UL policyholder account values. Interest credited is subject to contractual terms, including minimum guarantees.
6 UL base interest spread excludes SPL and is UL interest spread adjusted to exclude items that can vary significantly from period to period due to a number of factors and, therefore, may contribute to results that are not indicative of the underlying trends. This is primarily the impact of asset prepayments, such as bond make-whole premiums net of related bonus interest amortization, the MBS prepayment speed adjustment, and reserve adjustments.
7 Individual sales represents annualized first year premiums for recurring premium products and 10% of new single premium deposits, net of first year policy lapses and/or surrenders.
8 BOLI ROA is a measure of the gross margin on our BOLI book of business. This metric is calculated as the difference between our BOLI revenue earnings rate and our BOLI policy benefits rate. The revenue earnings rate is calculated as revenues divided by average invested assets. The policy benefits rate is calculated as total policy benefits divided by average account value. The policy benefits used in this metric do not include expenses.
9 BOLI base ROA is BOLI ROA adjusted to exclude items that can vary significantly from period to period due to a number of factors and, therefore, may contribute to yields that are not indicative of the underlying trends. This is primarily the impact of asset prepayments, such as bond make-whole premiums, the MBS prepayment speed adjustment, and reserve adjustments.
10 Represents 10% of deposits.
11 Represents deposits for new policies.
8
Symetra Financial Corporation
3Q 2013 Financial Supplement
Other
(In millions)
For the Three Months Ended | For the Nine Months Ended | |||||||||||||||||||||||||||
Sep 30, 2013 | Jun 30, 2013 | Mar 31, 2013 | Dec 31, 2012 | Sep 30, 2012 | Sep 30, 2013 | Sep 30, 2012 | ||||||||||||||||||||||
Operating revenues: | ||||||||||||||||||||||||||||
Net investment income (loss) | $ | 5.2 | $ | 8.6 | $ | 4.5 | $ | 5.4 | $ | (0.8 | ) | $ | 18.3 | $ | 6.6 | |||||||||||||
Policy fees, contract charges and other | 4.7 | 5.7 | 5.6 | 5.1 | 5.7 | 16.0 | 16.6 | |||||||||||||||||||||
Total operating revenues | 9.9 | 14.3 | 10.1 | 10.5 | 4.9 | 34.3 | 23.2 | |||||||||||||||||||||
Benefits and expenses: | ||||||||||||||||||||||||||||
Interest credited | (0.4 | ) | (0.6 | ) | (0.3 | ) | (0.6 | ) | (0.4 | ) | (1.3 | ) | (1.5 | ) | ||||||||||||||
Other underwriting and operating expenses | 5.3 | 8.0 | 7.0 | 8.2 | 7.1 | 20.3 | 20.9 | |||||||||||||||||||||
Interest expense | 8.3 | 8.2 | 8.2 | 8.2 | 8.2 | 24.7 | 24.6 | |||||||||||||||||||||
Total benefits and expenses | 13.2 | 15.6 | 14.9 | 15.8 | 14.9 | 43.7 | 44.0 | |||||||||||||||||||||
Segment pre-tax adjusted operating loss | $ | (3.3 | ) | $ | (1.3 | ) | $ | (4.8 | ) | $ | (5.3 | ) | $ | (10.0 | ) | $ | (9.4 | ) | $ | (20.8 | ) | |||||||
9
Symetra Financial Corporation
3Q 2013 Financial Supplement
Deferred Policy Acquisition Costs (DAC) and Deferred Sales Inducements (DSI) Roll Forwards
(In millions)
For the Three Months Ended | For the Nine Months Ended | |||||||||||||||||||||||||||
Sep 30, 2013 | Jun 30, 2013 | Mar 31, 2013 | Dec 31, 2012 | Sep 30, 2012 | Sep 30, 2013 | Sep 30, 2012 | ||||||||||||||||||||||
DAC Roll Forward | ||||||||||||||||||||||||||||
Summary — Total Company | ||||||||||||||||||||||||||||
Unamortized balance, beginning of period | $ | 373.1 | $ | 367.1 | $ | 367.9 | $ | 369.5 | $ | 376.2 | $ | 367.9 | $ | 368.4 | ||||||||||||||
Deferral of acquisition costs: | ||||||||||||||||||||||||||||
Commissions | 32.2 | 20.5 | 15.4 | 13.3 | 8.9 | 68.1 | 43.5 | |||||||||||||||||||||
Other acquisition expenses | 4.2 | 2.6 | 2.5 | 2.1 | 1.9 | 9.3 | 6.3 | |||||||||||||||||||||
Total deferral of acquisition costs | 36.4 | 23.1 | 17.9 | 15.4 | 10.8 | 77.4 | 49.8 | |||||||||||||||||||||
Adjustments related to inv (gains) losses | 0.8 | 0.1 | 0.2 | (0.1 | ) | 0.4 | 1.1 | 0.4 | ||||||||||||||||||||
Amortization | (14.9 | ) | (15.6 | ) | (17.3 | ) | (16.9 | ) | (15.3 | ) | (47.8 | ) | (46.5 | ) | ||||||||||||||
Unlocking | (5.3 | ) | (1.6 | ) | (1.6 | ) | — | (2.6 | ) | (8.5 | ) | (2.6 | ) | |||||||||||||||
Total amortization | (20.2 | ) | (17.2 | ) | (18.9 | ) | (16.9 | ) | (17.9 | ) | (56.3 | ) | (49.1 | ) | ||||||||||||||
Unamortized balance, end of period | 390.1 | 373.1 | 367.1 | 367.9 | 369.5 | 390.1 | 369.5 | |||||||||||||||||||||
Accum effect of net unrealized gains | (118.4 | ) | (123.5 | ) | (195.0 | ) | (212.1 | ) | (223.4 | ) | (118.4 | ) | (223.4 | ) | ||||||||||||||
DAC balance, end of period | $ | 271.7 | $ | 249.6 | $ | 172.1 | $ | 155.8 | $ | 146.1 | $ | 271.7 | $ | 146.1 | ||||||||||||||
Retirement Division—Deferred Annuities | ||||||||||||||||||||||||||||
Unamortized balance, beginning of period | $ | 256.9 | $ | 253.4 | $ | 256.7 | $ | 259.3 | $ | 265.2 | $ | 256.7 | $ | 265.5 | ||||||||||||||
Deferral of acquisition costs: | ||||||||||||||||||||||||||||
Commissions | 26.4 | 15.7 | 11.4 | 10.4 | 5.7 | 53.5 | 29.8 | |||||||||||||||||||||
Other acquisition expenses | 2.4 | 1.8 | 1.3 | 1.3 | 1.2 | 5.5 | 3.8 | |||||||||||||||||||||
Total deferral of acquisition costs | 28.8 | 17.5 | 12.7 | 11.7 | 6.9 | 59.0 | 33.6 | |||||||||||||||||||||
Adjustments related to inv (gains) losses | 0.8 | 0.1 | 0.2 | (0.1 | ) | 0.3 | 1.1 | 0.3 | ||||||||||||||||||||
Amortization | (12.3 | ) | (12.6 | ) | (14.6 | ) | (14.2 | ) | (12.9 | ) | (39.5 | ) | (39.9 | ) | ||||||||||||||
Unlocking | (5.4 | ) | (1.5 | ) | (1.6 | ) | — | (0.2 | ) | (8.5 | ) | (0.2 | ) | |||||||||||||||
Total amortization | (17.7 | ) | (14.1 | ) | (16.2 | ) | (14.2 | ) | (13.1 | ) | (48.0 | ) | (40.1 | ) | ||||||||||||||
Unamortized balance, end of period | 268.8 | 256.9 | 253.4 | 256.7 | 259.3 | 268.8 | 259.3 | |||||||||||||||||||||
Accum effect of net unrealized gains | (110.6 | ) | (113.5 | ) | (178.9 | ) | (194.6 | ) | (205.4 | ) | (110.6 | ) | (205.4 | ) | ||||||||||||||
DAC balance, end of period | $ | 158.2 | $ | 143.4 | $ | 74.5 | $ | 62.1 | $ | 53.9 | $ | 158.2 | $ | 53.9 | ||||||||||||||
Retirement Division—Income Annuities | ||||||||||||||||||||||||||||
Unamortized balance, beginning of period | $ | 46.3 | $ | 45.6 | $ | 45.0 | $ | 43.5 | $ | 42.3 | $ | 45.0 | $ | 37.9 | ||||||||||||||
Deferral of acquisition costs: | ||||||||||||||||||||||||||||
Commissions | 1.3 | 1.5 | 1.4 | 2.0 | 1.8 | 4.2 | 7.0 | |||||||||||||||||||||
Other acquisition expenses | 0.3 | 0.2 | 0.1 | 0.2 | 0.3 | 0.6 | 1.0 | |||||||||||||||||||||
Total deferral of acquisition costs | 1.6 | 1.7 | 1.5 | 2.2 | 2.1 | 4.8 | 8.0 | |||||||||||||||||||||
Amortization | (0.9 | ) | (1.0 | ) | (0.9 | ) | (0.7 | ) | (0.9 | ) | (2.8 | ) | (2.4 | ) | ||||||||||||||
Unamortized balance, end of period | 47.0 | 46.3 | 45.6 | 45.0 | 43.5 | 47.0 | 43.5 | |||||||||||||||||||||
DAC balance, end of period | $ | 47.0 | $ | 46.3 | $ | 45.6 | $ | 45.0 | $ | 43.5 | $ | 47.0 | $ | 43.5 | ||||||||||||||
Individual Life Division | ||||||||||||||||||||||||||||
Unamortized balance, beginning of period | $ | 69.9 | $ | 68.1 | $ | 66.2 | $ | 66.7 | $ | 68.7 | $ | 66.2 | $ | 65.0 | ||||||||||||||
Deferral of acquisition costs: | ||||||||||||||||||||||||||||
Commissions | 4.5 | 3.3 | 2.6 | 0.9 | 1.4 | 10.4 | 6.7 | |||||||||||||||||||||
Other acquisition expenses | 1.5 | 0.6 | 1.1 | 0.6 | 0.4 | 3.2 | 1.5 | |||||||||||||||||||||
Total deferral of acquisition costs | 6.0 | 3.9 | 3.7 | 1.5 | 1.8 | 13.6 | 8.2 | |||||||||||||||||||||
Adjustments related to inv (gains) losses | — | — | — | — | 0.1 | — | 0.1 | |||||||||||||||||||||
Amortization | (1.7 | ) | (2.0 | ) | (1.8 | ) | (2.0 | ) | (1.5 | ) | (5.5 | ) | (4.2 | ) | ||||||||||||||
Unlocking | 0.1 | (0.1 | ) | — | — | (2.4 | ) | — | (2.4 | ) | ||||||||||||||||||
Total amortization | (1.6 | ) | (2.1 | ) | (1.8 | ) | (2.0 | ) | (3.9 | ) | (5.5 | ) | (6.6 | ) | ||||||||||||||
Unamortized balance, end of period | 74.3 | 69.9 | 68.1 | 66.2 | 66.7 | 74.3 | 66.7 | |||||||||||||||||||||
Accum effect of net unrealized gains | (7.8 | ) | (10.0 | ) | (16.1 | ) | (17.5 | ) | (18.0 | ) | (7.8 | ) | (18.0 | ) | ||||||||||||||
DAC balance, end of period | $ | 66.5 | $ | 59.9 | $ | 52.0 | $ | 48.7 | $ | 48.7 | $ | 66.5 | $ | 48.7 | ||||||||||||||
For the Three Months Ended | For the Nine Months Ended | |||||||||||||||||||||||||||
Sep 30, 2013 | Jun 30, 2013 | Mar 31, 2013 | Dec 31, 2012 | Sep 30, 2012 | Sep 30, 2013 | Sep 30, 2012 | ||||||||||||||||||||||
DSI Roll Forward 1 | ||||||||||||||||||||||||||||
Total Company | ||||||||||||||||||||||||||||
Unamortized balance, beginning of period | $ | 155.1 | $ | 154.1 | $ | 153.4 | $ | 152.4 | $ | 150.5 | $ | 153.4 | $ | 142.0 | ||||||||||||||
Capitalizations | 12.1 | 12.2 | 13.3 | 11.8 | 12.1 | 37.6 | 37.9 | |||||||||||||||||||||
Adjustments related to inv (gains) losses | 0.3 | 0.1 | 0.2 | 0.1 | 0.2 | 0.6 | 0.2 | |||||||||||||||||||||
Amortization | (10.1 | ) | (10.1 | ) | (11.7 | ) | (10.9 | ) | (9.4 | ) | (31.9 | ) | (26.7 | ) | ||||||||||||||
Unlocking | (3.4 | ) | (1.2 | ) | (1.1 | ) | — | (1.0 | ) | (5.7 | ) | (1.0 | ) | |||||||||||||||
Total amortization | (13.5 | ) | (11.3 | ) | (12.8 | ) | (10.9 | ) | (10.4 | ) | (37.6 | ) | (27.7 | ) | ||||||||||||||
Unamortized balance, end of period | 154.0 | 155.1 | 154.1 | 153.4 | 152.4 | 154.0 | 152.4 | |||||||||||||||||||||
Accum effect of net unrealized gains | (84.1 | ) | (82.3 | ) | (122.5 | ) | (128.6 | ) | (132.4 | ) | (84.1 | ) | (132.4 | ) | ||||||||||||||
DSI balance, end of period | $ | 69.9 | $ | 72.8 | $ | 31.6 | $ | 24.8 | $ | 20.0 | $ | 69.9 | $ | 20.0 | ||||||||||||||
1 DSI balance is included in receivables and other assets.
10
Symetra Financial Corporation
3Q 2013 Financial Supplement
Account Value and Reserve Roll Forwards
(In millions)
For the Three Months Ended | For the Nine Months Ended | |||||||||||||||||||||||||||
Sep 30, 2013 | Jun 30, 2013 | Mar 31, 2013 | Dec 31, 2012 | Sep 30, 2012 | Sep 30, 2013 | Sep 30, 2012 | ||||||||||||||||||||||
Retirement Division: | ||||||||||||||||||||||||||||
Deferred Annuities: | ||||||||||||||||||||||||||||
Fixed Account Values, excluding FIA | ||||||||||||||||||||||||||||
Account value, beginning of period | $ | 10,631.1 | $ | 10,681.4 | $ | 10,688.5 | $ | 10,722.9 | $ | 10,748.3 | $ | 10,688.5 | $ | 10,532.1 | ||||||||||||||
Deposits | 307.7 | 139.1 | 179.3 | 192.4 | 140.6 | 626.1 | 734.3 | |||||||||||||||||||||
Withdrawals | (247.4 | ) | (275.7 | ) | (271.3 | ) | (310.4 | ) | (257.2 | ) | (794.4 | ) | (819.0 | ) | ||||||||||||||
Net transfers | (0.2 | ) | 0.5 | 1.3 | 1.1 | 2.8 | 1.6 | 7.8 | ||||||||||||||||||||
Net flows | 60.1 | (136.1 | ) | (90.7 | ) | (116.9 | ) | (113.8 | ) | (166.7 | ) | (76.9 | ) | |||||||||||||||
Interest credited | 78.2 | 78.1 | 79.1 | 82.5 | 83.8 | 235.4 | 252.7 | |||||||||||||||||||||
Other | 20.6 | 7.7 | 4.5 | — | 4.6 | 32.8 | 15.0 | |||||||||||||||||||||
Account value, end of period | $ | 10,790.0 | $ | 10,631.1 | $ | 10,681.4 | $ | 10,688.5 | $ | 10,722.9 | $ | 10,790.0 | $ | 10,722.9 | ||||||||||||||
Fixed Account Values, FIA | ||||||||||||||||||||||||||||
Account value, beginning of period | $ | 852.0 | $ | 539.1 | $ | 374.9 | $ | 264.3 | $ | 215.4 | $ | 374.9 | $ | 81.0 | ||||||||||||||
Deposits | 449.1 | 310.5 | 148.5 | 116.0 | 43.4 | 908.1 | 176.6 | |||||||||||||||||||||
Withdrawals | (5.7 | ) | (5.8 | ) | (3.0 | ) | (2.5 | ) | (1.3 | ) | (14.5 | ) | (4.6 | ) | ||||||||||||||
Net transfers | 0.6 | 1.2 | 0.3 | 0.6 | — | 2.1 | 1.1 | |||||||||||||||||||||
Net flows | 444.0 | 305.9 | 145.8 | 114.1 | 42.1 | 895.7 | 173.1 | |||||||||||||||||||||
Interest credited | 3.9 | 3.1 | 2.4 | 3.0 | 0.8 | 9.4 | 1.5 | |||||||||||||||||||||
Other | 21.9 | 3.9 | 16.0 | (6.5 | ) | 6.0 | 41.8 | 8.7 | ||||||||||||||||||||
Account value, end of period | $ | 1,321.8 | $ | 852.0 | $ | 539.1 | $ | 374.9 | $ | 264.3 | $ | 1,321.8 | $ | 264.3 | ||||||||||||||
Income Annuities: | ||||||||||||||||||||||||||||
Reserves | ||||||||||||||||||||||||||||
Reserves, beginning of period | $ | 6,512.7 | $ | 6,546.6 | $ | 6,566.5 | $ | 6,576.7 | $ | 6,613.6 | $ | 6,566.5 | $ | 6,608.3 | ||||||||||||||
Deposits | 37.8 | 45.1 | 40.3 | 55.5 | 46.2 | 123.2 | 184.8 | |||||||||||||||||||||
Benefit payments | (165.3 | ) | (157.1 | ) | (145.1 | ) | (158.9 | ) | (168.0 | ) | (467.5 | ) | (466.2 | ) | ||||||||||||||
Net flows | (127.5 | ) | (112.0 | ) | (104.8 | ) | (103.4 | ) | (121.8 | ) | (344.3 | ) | (281.4 | ) | ||||||||||||||
Interest credited | 92.0 | 92.5 | 93.3 | 93.5 | 94.0 | 277.8 | 283.2 | |||||||||||||||||||||
Other | 7.4 | (14.4 | ) | (8.4 | ) | (0.3 | ) | (9.1 | ) | (15.4 | ) | (33.4 | ) | |||||||||||||||
Reserves, end of period | $ | 6,484.6 | $ | 6,512.7 | $ | 6,546.6 | $ | 6,566.5 | $ | 6,576.7 | $ | 6,484.6 | $ | 6,576.7 | ||||||||||||||
Individual Life Division: | ||||||||||||||||||||||||||||
BOLI Account Values | ||||||||||||||||||||||||||||
Account value, beginning of period | $ | 4,732.8 | $ | 4,696.4 | $ | 4,659.8 | $ | 4,621.9 | $ | 4,587.3 | $ | 4,659.8 | $ | 4,491.5 | ||||||||||||||
Deposits | — | — | — | — | — | — | 20.0 | |||||||||||||||||||||
Surrenders/claims | (7.0 | ) | (2.2 | ) | (3.7 | ) | (3.1 | ) | (4.6 | ) | (12.9 | ) | (12.6 | ) | ||||||||||||||
Net flows | (7.0 | ) | (2.2 | ) | (3.7 | ) | (3.1 | ) | (4.6 | ) | (12.9 | ) | 7.4 | |||||||||||||||
Interest credited | 54.6 | 54.6 | 55.7 | 55.4 | 53.9 | 164.9 | 167.4 | |||||||||||||||||||||
Administrative charges and other | (15.6 | ) | (16.0 | ) | (15.4 | ) | (14.4 | ) | (14.7 | ) | (47.0 | ) | (44.4 | ) | ||||||||||||||
Account value, end of period | $ | 4,764.8 | $ | 4,732.8 | $ | 4,696.4 | $ | 4,659.8 | $ | 4,621.9 | $ | 4,764.8 | $ | 4,621.9 | ||||||||||||||
UL Account Values | ||||||||||||||||||||||||||||
Account value, beginning of period | $ | 714.5 | $ | 716.2 | $ | 716.0 | $ | 717.3 | $ | 714.6 | $ | 716.0 | $ | 678.9 | ||||||||||||||
Deposits | 19.6 | 16.9 | 16.3 | 15.0 | 18.7 | 52.8 | 85.4 | |||||||||||||||||||||
Surrenders/claims | (8.5 | ) | (11.1 | ) | (8.4 | ) | (9.4 | ) | (9.5 | ) | (28.0 | ) | (27.0 | ) | ||||||||||||||
Net flows | 11.1 | 5.8 | 7.9 | 5.6 | 9.2 | 24.8 | 58.4 | |||||||||||||||||||||
Interest credited | 7.5 | 7.6 | 7.7 | 7.7 | 8.1 | 22.8 | 23.4 | |||||||||||||||||||||
Administrative charges and other | (15.5 | ) | (15.1 | ) | (15.4 | ) | (14.6 | ) | (14.6 | ) | (46.0 | ) | (43.4 | ) | ||||||||||||||
Account value, end of period | $ | 717.6 | $ | 714.5 | $ | 716.2 | $ | 716.0 | $ | 717.3 | $ | 717.6 | $ | 717.3 | ||||||||||||||
11
Symetra Financial Corporation
3Q 2013 Financial Supplement
Overview of Liabilities and Associated Unrealized Gains
(In millions)
As of Sep 30, 2013 | ||||||||||
Policyholder Liability | % of Total | Unrealized gains8 | ||||||||
Illiquid Liabilities | ||||||||||
Structured settlements & other SPIAs 1 | $ | 6,499.8 | $ | 478.0 | ||||||
Deferred annuities with 5 year payout provision or MVA 2 | 1,446.9 | 60.2 | ||||||||
Traditional insurance (net of reinsurance) 3 | 170.7 | 12.9 | ||||||||
Group health & life (net of reinsurance) 3 | 134.2 | 0.4 | ||||||||
Total illiquid liabilities | 8,251.6 | 33.8% | 551.5 | |||||||
Somewhat Liquid Liabilities | ||||||||||
Bank-owned life insurance (BOLI) 4 | 4,857.8 | 231.7 | ||||||||
Deferred annuities with surrender charges of 5% or higher | 5,504.0 | 229.0 | ||||||||
Universal life with surrender charges of 5% or higher | 285.9 | 14.5 | ||||||||
Total somewhat liquid liabilities | 10,647.7 | 43.6% | 475.2 | |||||||
Fully Liquid Liabilities | ||||||||||
Deferred annuities with surrender charges of: | ||||||||||
3% up to 5% | 2,070.6 | 86.2 | ||||||||
Less than 3% | 286.8 | 11.9 | ||||||||
No surrender charges 5 | 2,671.5 | 111.1 | ||||||||
Universal life with surrender charges less than 5% | 448.6 | 22.4 | ||||||||
Other 6 | 26.8 | 0.4 | ||||||||
Total fully liquid liabilities | 5,504.3 | 22.6% | 232.0 | |||||||
Assets supporting surplus portfolio | 67.1 | |||||||||
Total 7 | $ | 24,403.6 | 100.0% | $ | 1,325.8 | |||||
Reconciliation of unrealized gains to AOCI: | ||||||||||
Unrealized gains from above | $ | 1,325.8 | ||||||||
Taxes on unrealized gains and losses on available-for-sale securities | (464.0 | ) | ||||||||
Adjustment for DAC and DSI valuation allowance, net of taxes | (131.6 | ) | ||||||||
Other | (11.2 | ) | ||||||||
AOCI | $ | 719.0 | ||||||||
1 These contracts cannot be surrendered. The benefits are specified in the contracts as fixed amounts, primarily to be paid over the next several decades.
2 This category includes annuity contracts with market value adjustment (MVA) features including certain FIA products. The MVA adjusts the value of the contract at surrender based on current interest rates, subject to a guaranteed minimum account value specified in the contract. In a liquidity crisis situation, we could invoke the five-year payout provision on certain annuity contracts without MVA features so that the contract value with interest is paid out ratably over five years.
3 Represents incurred but not reported claim liabilities, mainly related to our medical stop-loss business. The surrender value on these contracts is generally zero but these liabilities are considered illiquid as the claims have not been reported to us and the precise timing and amount of the payment is unknown.
4 The biggest deterrent to surrender is the taxation on the gain within these contracts, which includes a 10% non-deductible penalty tax. Banks can exchange certain of these contracts with other carriers, tax-free. However, a significant portion of this business does not qualify for this tax-free treatment due to the employment status of the original covered employees and charges may be applicable.
5 Approximately half of the account value has been with us for many years, due to guaranteed minimum interest rates of 4.0% - 4.5% that are significantly higher than those currently offered on new business, which range from 0.5% - 1.5%. Given the current low interest rate environment, we do not expect significant changes in the persistency of this business.
6 Represents BOLI, traditional insurance, and medical stop-loss and group life reported claim liabilities.
7 Represents the sum of funds held under deposit contracts, future policy benefits and policy and contract claims on the consolidated balance sheets, excluding other policyholder related liabilities and reinsurance recoverables of $231.1.
8 Represents the pre-tax unrealized gains of the investment portfolio supporting the related policyholder liability.
12
Symetra Financial Corporation
3Q 2013 Financial Supplement
Investments Summary
(In millions)
As of | |||||||||||||||||||||||||||||||||||
Sep 30, 2013 | % | Jun 30, 2013 | % | Mar 31, 2013 | % | Dec 31, 2012 | % | Sep 30, 2012 | % | ||||||||||||||||||||||||||
Portfolio Composition: | |||||||||||||||||||||||||||||||||||
Available-for-sale securities: | |||||||||||||||||||||||||||||||||||
Fixed maturities, at fair value | $ | 23,306.5 | 84.3 | % | $ | 22,697.0 | 84.3 | % | $ | 23,369.6 | 85.2 | % | $ | 23,519.0 | 85.4 | % | $ | 23,620.9 | 85.9 | % | |||||||||||||||
Marketable equity securities, at fair value | 87.1 | 0.3 | % | 53.7 | 0.2 | % | 50.6 | 0.2 | % | 49.6 | 0.2 | % | 48.4 | 0.2 | % | ||||||||||||||||||||
Trading securities: | |||||||||||||||||||||||||||||||||||
Marketable equity securities, at fair value | 509.4 | 1.9 | % | 512.0 | 1.9 | % | 501.5 | 1.8 | % | 552.7 | 2.0 | % | 535.8 | 2.0 | % | ||||||||||||||||||||
Mortgage loans, net | 3,376.8 | 12.2 | % | 3,303.1 | 12.3 | % | 3,170.7 | 11.5 | % | 3,094.4 | 11.2 | % | 2,939.8 | 10.7 | % | ||||||||||||||||||||
Policy loans | 64.2 | 0.2 | % | 64.4 | 0.2 | % | 64.7 | 0.2 | % | 65.8 | 0.2 | % | 67.0 | 0.2 | % | ||||||||||||||||||||
Investments in limited partnerships | 253.1 | 0.9 | % | 236.8 | 0.9 | % | 235.3 | 0.9 | % | 239.3 | 0.9 | % | 242.2 | 0.9 | % | ||||||||||||||||||||
Other invested assets | 44.0 | 0.2 | % | 48.0 | 0.2 | % | 45.1 | 0.2 | % | 35.6 | 0.1 | % | 38.2 | 0.1 | % | ||||||||||||||||||||
Total investments | 27,641.1 | 100.0 | % | 26,915.0 | 100.0 | % | 27,437.5 | 100.0 | % | 27,556.4 | 100.0 | % | 27,492.3 | 100.0 | % | ||||||||||||||||||||
Cash and cash equivalents | 121.1 | 171.6 | 301.2 | 130.8 | 238.4 | ||||||||||||||||||||||||||||||
Total investments, cash and cash equivalents | $ | 27,762.2 | $ | 27,086.6 | $ | 27,738.7 | $ | 27,687.2 | $ | 27,730.7 | |||||||||||||||||||||||||
Fixed Maturities Securities by Credit Quality: 1 | |||||||||||||||||||||||||||||||||||
1: AAA, AA, A | $ | 13,594.4 | 58.3 | % | $ | 13,205.7 | 58.2 | % | $ | 13,677.5 | 58.6 | % | $ | 13,748.9 | 58.5 | % | $ | 14,031.0 | 59.4 | % | |||||||||||||||
2: BBB | 8,494.1 | 36.5 | % | 8,267.0 | 36.4 | % | 8,469.7 | 36.2 | % | 8,490.9 | 36.1 | % | 8,350.2 | 35.4 | % | ||||||||||||||||||||
Total investment grade | 22,088.5 | 94.8 | % | 21,472.7 | 94.6 | % | 22,147.2 | 94.8 | % | 22,239.8 | 94.6 | % | 22,381.2 | 94.8 | % | ||||||||||||||||||||
3: BB | 637.3 | 2.7 | % | 635.7 | 2.8 | % | 631.6 | 2.7 | % | 683.7 | 2.9 | % | 659.6 | 2.8 | % | ||||||||||||||||||||
4: B | 491.7 | 2.1 | % | 492.0 | 2.2 | % | 496.7 | 2.1 | % | 488.4 | 2.1 | % | 462.8 | 1.9 | % | ||||||||||||||||||||
5: CCC & lower | 87.9 | 0.4 | % | 78.5 | 0.3 | % | 76.1 | 0.3 | % | 83.0 | 0.3 | % | 101.7 | 0.4 | % | ||||||||||||||||||||
6: In or near default | 1.1 | 0.0 | % | 18.1 | 0.1 | % | 18.0 | 0.1 | % | 24.1 | 0.1 | % | 15.6 | 0.1 | % | ||||||||||||||||||||
Total below investment grade | 1,218.0 | 5.2 | % | 1,224.3 | 5.4 | % | 1,222.4 | 5.2 | % | 1,279.2 | 5.4 | % | 1,239.7 | 5.2 | % | ||||||||||||||||||||
Total fixed maturities | $ | 23,306.5 | 100.0 | % | $ | 22,697.0 | 100.0 | % | $ | 23,369.6 | 100.0 | % | $ | 23,519.0 | 100.0 | % | $ | 23,620.9 | 100.0 | % | |||||||||||||||
Fixed Maturities by Issuer Type: | |||||||||||||||||||||||||||||||||||
U.S. government and agencies | $ | 510.7 | 2.2 | % | $ | 167.8 | 0.7 | % | $ | 252.6 | 1.1 | % | $ | 311.5 | 1.3 | % | $ | 129.2 | 0.5 | % | |||||||||||||||
State and political subdivisions | 754.5 | 3.2 | % | 808.3 | 3.6 | % | 779.5 | 3.3 | % | 776.5 | 3.3 | % | 744.1 | 3.2 | % | ||||||||||||||||||||
Foreign governments | 15.9 | 0.0 | % | 17.1 | 0.1 | % | 17.9 | 0.1 | % | 19.1 | 0.1 | % | 19.6 | 0.1 | % | ||||||||||||||||||||
Corporate securities | 17,165.7 | 73.7 | % | 16,861.0 | 74.3 | % | 17,275.1 | 73.9 | % | 17,201.6 | 73.1 | % | 17,168.0 | 72.7 | % | ||||||||||||||||||||
Residential mortgage-backed securities | 2,796.5 | 12.0 | % | 2,802.6 | 12.3 | % | 2,935.4 | 12.6 | % | 3,007.8 | 12.8 | % | 3,150.7 | 13.3 | % | ||||||||||||||||||||
Commercial mortgage-backed securities | 1,536.1 | 6.6 | % | 1,552.1 | 6.8 | % | 1,619.7 | 6.9 | % | 1,707.7 | 7.3 | % | 1,889.0 | 8.0 | % | ||||||||||||||||||||
Other debt obligations | 527.1 | 2.3 | % | 488.1 | 2.2 | % | 489.4 | 2.1 | % | 494.8 | 2.1 | % | 520.3 | 2.2 | % | ||||||||||||||||||||
Total fixed maturities | $ | 23,306.5 | 100.0 | % | $ | 22,697.0 | 100.0 | % | $ | 23,369.6 | 100.0 | % | $ | 23,519.0 | 100.0 | % | $ | 23,620.9 | 100.0 | % | |||||||||||||||
Effective Duration | 5.5 | 5.6 | 5.7 | 5.7 | 5.7 | ||||||||||||||||||||||||||||||
Weighted-average Investment Yield | 5.01 | % | 5.02 | % | 5.09 | % | 5.08 | % | 5.07 | % | |||||||||||||||||||||||||
For the Three Months Ended | |||||||||||||||||||||||||||||||||||
Sep 30, 2013 | % | Jun 30, 2013 | % | Mar 31, 2013 | % | Dec 31, 2012 | % | Sep 30, 2012 | % | ||||||||||||||||||||||||||
Average Daily Cash and Cash Equivalent Balances: | |||||||||||||||||||||||||||||||||||
Benefits Division | $ | 4.6 | 2.4 | % | $ | 4.9 | 2.4 | % | $ | 1.2 | 0.6 | % | $ | 7.8 | 3.7 | % | $ | 6.0 | 4.4 | % | |||||||||||||||
Retirement Division: | |||||||||||||||||||||||||||||||||||
Deferred Annuities | 134.0 | 70.7 | % | 115.3 | 57.4 | % | 84.8 | 44.1 | % | 107.0 | 51.4 | % | 29.9 | 21.7 | % | ||||||||||||||||||||
Income Annuities | 2.6 | 1.4 | % | 23.7 | 11.8 | % | 54.1 | 28.1 | % | 32.8 | 15.8 | % | 67.4 | 49.0 | % | ||||||||||||||||||||
Individual Life Division | 26.3 | 13.9 | % | 15.0 | 7.5 | % | 24.2 | 12.6 | % | 35.1 | 16.9 | % | 33.7 | 24.5 | % | ||||||||||||||||||||
Other | 22.0 | 11.6 | % | 41.9 | 20.9 | % | 28.0 | 14.6 | % | 25.5 | 12.2 | % | 0.6 | 0.4 | % | ||||||||||||||||||||
Total | $ | 189.5 | 100.0 | % | $ | 200.8 | 100.0 | % | $ | 192.3 | 100.0 | % | $ | 208.2 | 100.0 | % | $ | 137.6 | 100.0 | % | |||||||||||||||
1 Credit quality is based on NAIC (National Association of Insurance Commissioners) designation with presentation of the S&P equivalent credit ratings.
13
Symetra Financial Corporation
3Q 2013 Financial Supplement
Investments Income Statement Data
(In millions)
For the Three Months Ended | For the Nine Months Ended | |||||||||||||||||||||||||||
Sep 30, 2013 | Jun 30, 2013 | Mar 31, 2013 | Dec 31, 2012 | Sep 30, 2012 | Sep 30, 2013 | Sep 30, 2012 | ||||||||||||||||||||||
Prepayment-related Income: 1 | ||||||||||||||||||||||||||||
Benefits Division | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | ||||||||||||||
Retirement Division: | ||||||||||||||||||||||||||||
Deferred Annuities | 12.6 | 6.0 | 13.3 | 9.6 | 2.6 | 31.9 | 4.8 | |||||||||||||||||||||
Income Annuities | 1.2 | 0.5 | 3.2 | 0.4 | 0.7 | 4.9 | 3.8 | |||||||||||||||||||||
Individual Life Division | 3.6 | 1.6 | 1.1 | 0.7 | 0.7 | 6.3 | 2.8 | |||||||||||||||||||||
Other | 1.2 | 0.5 | 0.1 | 0.1 | 0.2 | 1.8 | 2.5 | |||||||||||||||||||||
$ | 18.6 | $ | 8.6 | $ | 17.7 | $ | 10.8 | $ | 4.2 | $ | 44.9 | $ | 13.9 | |||||||||||||||
For the Three Months Ended | For the Nine Months Ended | |||||||||||||||||||||||||||
Sep 30, 2013 | Jun 30, 2013 | Mar 31, 2013 | Dec 31, 2012 | Sep 30, 2012 | Sep 30, 2013 | Sep 30, 2012 | ||||||||||||||||||||||
Net Realized Investment Gains (Losses): | ||||||||||||||||||||||||||||
Fixed maturities: | ||||||||||||||||||||||||||||
Gross gains on sales | $ | 2.4 | $ | 3.8 | $ | 1.8 | $ | 13.9 | $ | 7.4 | $ | 8.0 | $ | 40.4 | ||||||||||||||
Gross losses on sales | (7.4 | ) | (1.9 | ) | (8.1 | ) | (12.7 | ) | (6.4 | ) | (17.4 | ) | (14.3 | ) | ||||||||||||||
Other-than-temporary impairments | (6.2 | ) | (7.2 | ) | (2.0 | ) | (3.8 | ) | (13.3 | ) | (15.4 | ) | (25.2 | ) | ||||||||||||||
Other 2 | 0.5 | (3.7 | ) | (0.7 | ) | (0.3 | ) | 2.3 | (3.9 | ) | 3.5 | |||||||||||||||||
Total fixed maturities | (10.7 | ) | (9.0 | ) | (9.0 | ) | (2.9 | ) | (10.0 | ) | (28.7 | ) | 4.4 | |||||||||||||||
Marketable equity securities, trading 3 | 12.0 | (1.7 | ) | 33.0 | 3.1 | 25.0 | 43.3 | 33.6 | ||||||||||||||||||||
Other | (7.0 | ) | (0.8 | ) | 2.1 | (4.2 | ) | (0.1 | ) | (5.7 | ) | (3.6 | ) | |||||||||||||||
DAC/DSI adjustment | 1.1 | 0.2 | 0.4 | 0.1 | 0.6 | 1.7 | 0.6 | |||||||||||||||||||||
Net realized investment gains (losses) | $ | (4.6 | ) | $ | (11.3 | ) | $ | 26.5 | $ | (3.9 | ) | $ | 15.5 | $ | 10.6 | $ | 35.0 | |||||||||||
For the Three Months Ended | For the Nine Months Ended | |||||||||||||||||||||||||||
Sep 30, 2013 | Jun 30, 2013 | Mar 31, 2013 | Dec 31, 2012 | Sep 30, 2012 | Sep 30, 2013 | Sep 30, 2012 | ||||||||||||||||||||||
Tax Credit Investments Impact on Income | ||||||||||||||||||||||||||||
Historical and estimated future impact | ||||||||||||||||||||||||||||
Amortization related to tax credit investments, net of taxes | $ | (3.3 | ) | $ | (3.1 | ) | $ | (3.2 | ) | $ | (3.1 | ) | $ | (5.0 | ) | $ | (9.6 | ) | $ | (10.8 | ) | |||||||
Realized losses related to tax credit investments, net of taxes | (2.1 | ) | (0.7 | ) | (0.3 | ) | (1.8 | ) | (0.2 | ) | (3.1 | ) | (0.8 | ) | ||||||||||||||
Tax credits | 11.8 | 9.5 | 9.5 | 8.9 | 9.5 | 30.8 | 24.6 | |||||||||||||||||||||
Impact to net income | $ | 6.4 | $ | 5.7 | $ | 6.0 | $ | 4.0 | $ | 4.3 | $ | 18.1 | $ | 13.0 | ||||||||||||||
Carrying value of invested asset | $ | 217.2 | $ | 202.1 | $ | 206.7 | $ | 210.7 | $ | 213.2 | $ | 217.2 | $ | 213.2 | ||||||||||||||
Future estimated impact to net income: | 2013 | $ | 7.1 | |||||||||||||||||||||||||
2014 | 27.3 | |||||||||||||||||||||||||||
2015 & beyond | 44.1 | |||||||||||||||||||||||||||
$ | 78.5 | |||||||||||||||||||||||||||
Historical information | For the Years Ended | |||||||||||||||||||
2012 | 2011 | 2010 | 2009 | 2008 | ||||||||||||||||
Amortization related to tax credit investments, net of taxes | $ | (13.9 | ) | $ | (9.2 | ) | $ | (6.3 | ) | $ | (5.9 | ) | $ | (7.8 | ) | |||||
Realized losses related to tax credit investments, net of taxes | (2.6 | ) | (2.0 | ) | — | — | — | |||||||||||||
Tax credits | 33.5 | 17.4 | 10.9 | 9.6 | 8.3 | |||||||||||||||
Impact to net income | $ | 17.0 | $ | 6.2 | $ | 4.6 | $ | 3.7 | $ | 0.5 | ||||||||||
1 Prepayment-related income includes make-whole premiums and consent fees on early calls or tenders of fixed maturities, prepayment speed adjustments on structured securities, and prepayment fees on our commercial mortgage loans.
2 Other includes net gains (losses) on calls and redemptions, and changes in the fair value of convertible fixed maturities.
3 Marketable equity securities, trading includes net gains (losses) on changes in fair value.
14
Symetra Financial Corporation
3Q 2013 Financial Supplement
Sales by Segment and Product
(In millions)
For the Three Months Ended | For the Nine Months Ended | |||||||||||||||||||||||||||
Sep 30, 2013 | Jun 30, 2013 | Mar 31, 2013 | Dec 31, 2012 | Sep 30, 2012 | Sep 30, 2013 | Sep 30, 2012 | ||||||||||||||||||||||
Benefits Division 1 | ||||||||||||||||||||||||||||
Medical stop-loss | $ | 12.0 | $ | 16.7 | $ | 51.9 | $ | 18.6 | $ | 24.1 | $ | 80.6 | $ | 112.8 | ||||||||||||||
Limited benefit medical | 2.2 | 1.0 | 1.7 | 1.4 | 3.8 | 4.9 | 10.9 | |||||||||||||||||||||
Group life & disability income | 4.8 | 3.6 | 12.9 | 5.7 | 3.4 | 21.3 | 9.9 | |||||||||||||||||||||
Total | $ | 19.0 | $ | 21.3 | $ | 66.5 | $ | 25.7 | $ | 31.3 | $ | 106.8 | $ | 133.6 | ||||||||||||||
Retirement Division — Deferred Annuities 2 | ||||||||||||||||||||||||||||
Fixed annuities | $ | 292.1 | $ | 121.2 | $ | 161.3 | $ | 174.1 | $ | 116.2 | $ | 574.6 | $ | 648.9 | ||||||||||||||
Fixed indexed annuities | 448.2 | 309.8 | 148.7 | 115.8 | 43.2 | 906.7 | 176.8 | |||||||||||||||||||||
Variable annuities | 6.8 | 10.5 | 12.0 | 10.9 | 7.1 | 29.3 | 20.1 | |||||||||||||||||||||
Total | $ | 747.1 | $ | 441.5 | $ | 322.0 | $ | 300.8 | $ | 166.5 | $ | 1,510.6 | $ | 845.8 | ||||||||||||||
Retirement Division — Income Annuities 2 | ||||||||||||||||||||||||||||
SPIA | $ | 37.1 | $ | 42.1 | $ | 38.4 | $ | 43.6 | $ | 37.6 | $ | 117.6 | $ | 129.9 | ||||||||||||||
Structured settlements | 1.8 | 3.4 | 2.3 | 14.0 | 11.9 | 7.5 | 70.7 | |||||||||||||||||||||
Total | $ | 38.9 | $ | 45.5 | $ | 40.7 | $ | 57.6 | $ | 49.5 | $ | 125.1 | $ | 200.6 | ||||||||||||||
Individual Life Division | ||||||||||||||||||||||||||||
Term life 1 | $ | 0.5 | $ | 0.7 | $ | 0.5 | $ | 0.6 | $ | 0.5 | $ | 1.7 | $ | 1.6 | ||||||||||||||
Universal life 1 | 3.3 | 2.2 | 1.6 | 0.5 | 0.4 | 7.1 | 1.1 | |||||||||||||||||||||
Single premium life 3 | 0.1 | 0.1 | 0.2 | 0.2 | 0.7 | 0.4 | 5.1 | |||||||||||||||||||||
Individual sales | 3.9 | 3.0 | 2.3 | 1.3 | 1.6 | 9.2 | 7.8 | |||||||||||||||||||||
BOLI 4 | — | — | — | — | — | — | 2.0 | |||||||||||||||||||||
COLI single premium 4 | 0.7 | 0.3 | 2.4 | — | — | 3.4 | — | |||||||||||||||||||||
COLI recurring premium 5 | 0.4 | 3.0 | — | — | — | 3.4 | — | |||||||||||||||||||||
Institutional markets | 1.1 | 3.3 | 2.4 | — | — | 6.8 | 2.0 | |||||||||||||||||||||
Total | $ | 5.0 | $ | 6.3 | $ | 4.7 | $ | 1.3 | $ | 1.6 | $ | 16.0 | $ | 9.8 | ||||||||||||||
1 | Represents annualized first-year premiums net of first year policy lapses. | |
2 | Represents deposits for new policies net of first year policy lapses and/or surrenders. | |
3 | Represents 10% of new deposits net of first year policy lapses and/or surrenders. | |
4 | Represents 10% of deposits. | |
5 | Represents deposits for new policies. | |
15
Symetra Financial Corporation
3Q 2013 Financial Supplement
Book Value, Adjusted Book Value and Statutory Book Value per Share
(In millions, except per share amounts)
As of | ||||||||||||||||||||
Sep 30, 2013 | Jun 30, 2013 | Mar 31, 2013 | Dec 31, 2012 | Sep 30, 2012 | ||||||||||||||||
Book value per common share 1 | $ | 25.58 | $ | 25.81 | $ | 26.10 | $ | 26.29 | $ | 26.37 | ||||||||||
Non-GAAP Financial Measures: | ||||||||||||||||||||
Adjusted book value per common share 2 | $ | 19.47 | $ | 19.17 | $ | 19.40 | $ | 18.97 | $ | 18.78 | ||||||||||
Adjusted book value per common share, as converted 3 | $ | 19.47 | $ | 19.17 | $ | 18.32 | $ | 17.94 | $ | 17.78 | ||||||||||
Statutory book value per common share 4 | $ | 18.87 | $ | 18.65 | $ | 18.66 | $ | 18.25 | $ | 18.12 | ||||||||||
Numerator: | ||||||||||||||||||||
Total stockholders’ equity | $ | 3,012.8 | $ | 3,040.1 | $ | 3,604.2 | $ | 3,630.1 | $ | 3,641.2 | ||||||||||
AOCI | 719.0 | 782.6 | 1,293.1 | 1,371.2 | 1,404.3 | |||||||||||||||
Adjusted book value | $ | 2,293.8 | $ | 2,257.5 | $ | 2,311.1 | $ | 2,258.9 | $ | 2,236.9 | ||||||||||
Assumed proceeds from exercise of warrants | — | — | 218.1 | 218.1 | 218.1 | |||||||||||||||
Adjusted book value, as converted | $ | 2,293.8 | $ | 2,257.5 | $ | 2,529.2 | $ | 2,477.0 | $ | 2,455.0 | ||||||||||
Total stockholders’ equity | $ | 3,012.8 | $ | 3,040.1 | $ | 3,604.2 | $ | 3,630.1 | $ | 3,641.2 | ||||||||||
Stockholders’ equity of non-insurance entities | (319.4 | ) | (301.6 | ) | (301.2 | ) | (290.2 | ) | (283.8 | ) | ||||||||||
Statutory and other adjustments | (752.8 | ) | (817.2 | ) | (1,350.4 | ) | (1,427.3 | ) | (1,450.9 | ) | ||||||||||
Asset valuation reserve (AVR) | 282.5 | 275.7 | 269.9 | 261.3 | 252.2 | |||||||||||||||
Statutory book value | $ | 2,223.1 | $ | 2,197.0 | $ | 2,222.5 | $ | 2,173.9 | $ | 2,158.7 | ||||||||||
Denominator: 5 | ||||||||||||||||||||
Common shares outstanding | 117.800 | 117.792 | 119.099 | 119.088 | 119.120 | |||||||||||||||
Total common shares outstanding and shares subject to warrants | 117.800 | 117.792 | 138.075 | 138.064 | 138.096 | |||||||||||||||
1 | Book value per common share is calculated as stockholders’ equity divided by the sum of common shares outstanding and shares subject to warrants in the periods they were outstanding. The warrants were net-share settled on June 20, 2013, resulting in the issuance of 5.298 shares of common stock. | |
2 | Adjusted book value per common share is calculated as adjusted book value divided by common shares outstanding. | |
3 | Adjusted book value per common share, as converted, is calculated as adjusted book value, as converted divided by the sum of common shares outstanding and shares subject to warrants in the periods they were outstanding. The warrants were net-share settled on June 20, 2013, resulting in the issuance of 5.298 shares of common stock. As of June 30, 2013 this measure is equivalent to adjusted book value per share. | |
4 | Statutory book value per common share is calculated based on statutory book value divided by common shares outstanding. | |
As of | ||||||||||||||||||||
Sep 30, 2013 | Jun 30, 2013 | Mar 31, 2013 | Dec 31, 2012 | Sep 30, 2012 | ||||||||||||||||
5 Reconciliation of outstanding shares: | ||||||||||||||||||||
Common shares outstanding, beginning of period | 117.792 | 119.099 | 119.088 | 119.120 | 119.131 | |||||||||||||||
Shares issued | — | 5.300 | — | — | — | |||||||||||||||
Employee stock purchase plan shares issued | 0.025 | 0.042 | 0.038 | 0.037 | 0.025 | |||||||||||||||
Restricted shares issued, net | (0.017 | ) | (0.004 | ) | 0.283 | (0.006 | ) | (0.032 | ) | |||||||||||
Shares repurchased | — | (6.645 | ) | (0.310 | ) | (0.063 | ) | (0.004 | ) | |||||||||||
Common shares outstanding, end of period | 117.800 | 117.792 | 119.099 | 119.088 | 119.120 | |||||||||||||||
Outstanding warrants | — | — | 18.976 | 18.976 | 18.976 | |||||||||||||||
Total common shares outstanding and shares subject to outstanding warrants, end of period | 117.800 | 117.792 | 138.075 | 138.064 | 138.096 | |||||||||||||||
As of | ||||||||||||||||||||
Sep 30, 2013 | Jun 30, 2013 | Mar 31, 2013 | Dec 31, 2012 | Sep 30, 2012 | ||||||||||||||||
Tangible book value: | ||||||||||||||||||||
Total stockholders’ equity | $ | 3,012.8 | $ | 3,040.1 | $ | 3,604.2 | $ | 3,630.1 | $ | 3,641.2 | ||||||||||
Less: | ||||||||||||||||||||
Deferred policy acquisition costs | 271.7 | 249.6 | 172.1 | 155.8 | 146.1 | |||||||||||||||
Goodwill and other | 125.8 | 132.0 | 93.1 | 86.2 | 83.2 | |||||||||||||||
Tangible Book Value | $ | 2,615.3 | $ | 2,658.5 | $ | 3,339.0 | $ | 3,388.1 | $ | 3,411.9 | ||||||||||
Tangible book value is a non-GAAP financial measure calculated as stockholders’ equity excluding deferred policy acquisition costs, goodwill, intangible assets and certain other non-tangible assets. Stockholders’ equity is the most directly comparable GAAP measure to tangible book value.
16
Symetra Financial Corporation
3Q 2013 Financial Supplement
ROE and Operating ROAE
(In millions)
Twelve Months Ended | ||||||||||||||||||||
Sep 30, 2013 | Jun 30, 2013 | Mar 31, 2013 | Dec 31, 2012 | Sep 30, 2012 | ||||||||||||||||
ROE: | ||||||||||||||||||||
Net income for the twelve months ended 1 | $ | 187.3 | $ | 197.2 | $ | 196.0 | $ | 205.4 | $ | 248.1 | ||||||||||
Average stockholders’ equity 2 | $ | 3,385.7 | $ | 3,458.8 | $ | 3,481.7 | $ | 3,383.9 | $ | 3,266.3 | ||||||||||
ROE | 5.5 | % | 5.7 | % | 5.6 | % | 6.1 | % | 7.6 | % | ||||||||||
Operating ROAE: | ||||||||||||||||||||
Adjusted operating income for the twelve months ended 1 | $ | 183.6 | $ | 180.6 | $ | 176.4 | $ | 185.3 | $ | 203.5 | ||||||||||
Average adjusted book value 3 | $ | 2,271.6 | $ | 2,251.0 | $ | 2,230.4 | $ | 2,185.7 | $ | 2,138.1 | ||||||||||
Operating ROAE | 8.1 | % | 8.0 | % | 7.9 | % | 8.5 | % | 9.5 | % | ||||||||||
1 The twelve months ended information is derived by adding the four most recent quarters of net income or adjusted operating income.
2 Average stockholders’ equity is derived by averaging ending stockholders' equity for the most recent five quarters.
3 Average adjusted book value is derived by averaging ending stockholders' equity less AOCI, for the most recent five quarters.
Calculation of average stockholders’ equity:
The following data can be used to recalculate the average stockholders’ equity and average adjusted book value amounts used in the calculation of ROE and operating ROAE.
As of | ||||||||||||||
2013 | 2012 | 2011 | ||||||||||||
Stockholders’ Equity | ||||||||||||||
Dec 31 | $ | — | $ | 3,630.1 | $ | 3,114.9 | ||||||||
Sep 30 | 3,012.8 | 3,641.2 | 3,042.2 | |||||||||||
Jun 30 | 3,040.1 | 3,378.4 | 2,627.3 | |||||||||||
Mar 31 | 3,604.2 | 3,154.7 | 2,410.2 | |||||||||||
AOCI | ||||||||||||||
Dec 31 | $ | — | $ | 1,371.2 | $ | 1,027.3 | ||||||||
Sep 30 | 719.0 | 1,404.3 | 1,021.1 | |||||||||||
Jun 30 | 782.6 | 1,188.0 | 609.7 | |||||||||||
Mar 31 | 1,293.1 | 1,000.1 | 443.7 | |||||||||||
Reconciliation of adjusted operating income:
The following data together with other data found throughout the supplement can be used to recalculate adjusted operating income for the twelve months ended March 31, 2013, December 31, 2012, and September 30, 2012.
Three Months Ended | ||||||||||||
Jun 30, 2012 | Mar 31, 2012 | Dec 31, 2011 | ||||||||||
Net income | $ | 43.8 | $ | 75.4 | $ | 73.7 | ||||||
Less: Net realized investment gains (losses) (net of taxes) | (4.2 | ) | 16.9 | 22.2 | ||||||||
Add: Net realized gains (losses) - FIA (net of taxes) | (0.8 | ) | 0.8 | (0.4 | ) | |||||||
Adjusted operating income | $ | 47.2 | $ | 59.3 | $ | 51.1 | ||||||
17
Symetra Financial Corporation
3Q 2013 Financial Supplement
Addendum
RMBS Prepayment Exposure
(In millions)
Sep 30, 2013 | Prepayment Speed Adjustment 2 | |||||||||||||||||||||||||||||||||||||||
Trailing 12 Month | ||||||||||||||||||||||||||||||||||||||||
Vintage 1 | Amortized Cost | Unrealized Gain/ (Loss) | Fair Value | Gross Discount | Gross Premium | Average Mortgage Loan Rate | 3Q13 Average Prepayment Speed | Average Prepayment speed | Max Prepayment speed | 3Q 2013 | YTD 2013 | |||||||||||||||||||||||||||||
Agency: | ||||||||||||||||||||||||||||||||||||||||
CMO | ||||||||||||||||||||||||||||||||||||||||
2013 | $ | 38.0 | $ | 0.7 | $ | 38.7 | $ | 3.1 | $ | — | 3.9 | % | 16.2 | 16.2 | 16.2 | $ | — | $ | — | |||||||||||||||||||||
2012 | 117.1 | (6.0 | ) | 111.1 | 3.4 | (2.4 | ) | 3.6 | % | 385.7 | 484.4 | 580.7 | — | — | ||||||||||||||||||||||||||
2011 | 278.8 | 2.6 | 281.4 | 9.9 | (2.1 | ) | 3.5 | % | 408.9 | 659.0 | 875.0 | (0.3 | ) | (0.7 | ) | |||||||||||||||||||||||||
2010 | 429.2 | 29.0 | 458.2 | 12.6 | (7.6 | ) | 4.5 | % | 402.6 | 431.2 | 487.4 | 0.1 | (0.1 | ) | ||||||||||||||||||||||||||
2009 | 222.2 | 17.1 | 239.3 | 1.8 | (2.9 | ) | 4.9 | % | 476.3 | 487.3 | 522.4 | 0.3 | 0.3 | |||||||||||||||||||||||||||
2008 | 1.0 | 0.1 | 1.1 | — | — | 5.0 | % | 683.0 | 736.3 | 797.0 | — | — | ||||||||||||||||||||||||||||
2007 | 1.5 | 0.3 | 1.8 | 0.3 | — | 6.4 | % | 788.0 | 625.0 | 788.0 | — | — | ||||||||||||||||||||||||||||
2006 | 2.3 | 0.1 | 2.4 | — | — | 6.6 | % | 173.9 | 170.3 | 179.2 | — | — | ||||||||||||||||||||||||||||
2005 | 28.8 | 4.0 | 32.8 | 0.3 | — | 6.3 | % | 396.2 | 376.6 | 418.3 | — | — | ||||||||||||||||||||||||||||
2004 & Prior | 393.5 | 49.2 | 442.7 | 11.0 | (3.4 | ) | 6.2 | % | 446.3 | 431.7 | 476.0 | (0.3 | ) | (0.1 | ) | |||||||||||||||||||||||||
Agency CMO | $ | 1,512.4 | $ | 97.1 | $ | 1,609.5 | $ | 42.4 | $ | (18.4 | ) | 4.8 | % | 415.0 | 474.2 | 555.1 | $ | (0.2 | ) | $ | (0.6 | ) | ||||||||||||||||||
Passthrough | ||||||||||||||||||||||||||||||||||||||||
2013 | $ | 131.8 | $ | (3.7 | ) | $ | 128.1 | $ | 1.5 | $ | (1.8 | ) | 3.3 | % | 1.7 | 1.4 | 1.7 | $ | — | $ | — | |||||||||||||||||||
2012 | 74.3 | (4.7 | ) | 69.6 | — | (2.9 | ) | 3.4 | % | 5.0 | 3.5 | 5.3 | — | — | ||||||||||||||||||||||||||
2011 | 14.1 | 0.1 | 14.2 | — | (0.6 | ) | 4.1 | % | 22.3 | 24.5 | 27.0 | — | — | |||||||||||||||||||||||||||
2010 | 140.5 | 3.6 | 144.1 | 0.1 | (5.5 | ) | 4.7 | % | 21.3 | 21.3 | 24.4 | — | 0.1 | |||||||||||||||||||||||||||
2009 | 416.7 | 15.3 | 432.0 | — | (17.5 | ) | 5.9 | % | 11.8 | 11.4 | 14.0 | 0.1 | — | |||||||||||||||||||||||||||
2008 | 20.3 | 1.6 | 21.9 | — | (0.4 | ) | 6.4 | % | 35.5 | 34.1 | 39.9 | — | — | |||||||||||||||||||||||||||
2007 | 15.5 | 1.2 | 16.7 | 0.1 | (0.4 | ) | 6.4 | % | 40.0 | 35.3 | 42.1 | — | — | |||||||||||||||||||||||||||
2006 | 4.8 | 0.5 | 5.3 | — | — | 6.5 | % | 45.8 | 41.5 | 45.8 | — | — | ||||||||||||||||||||||||||||
2005 | 5.2 | 0.6 | 5.8 | 0.3 | — | 5.2 | % | — | — | — | — | — | ||||||||||||||||||||||||||||
2004 & Prior | 36.6 | 3.4 | 40.0 | 0.5 | (0.3 | ) | 5.8 | % | 27.9 | 25.7 | 31.2 | — | — | |||||||||||||||||||||||||||
Agency Passthrough | 859.8 | 17.9 | 877.7 | 2.5 | (29.4 | ) | 5.1 | % | 13.3 | 12.7 | 15.2 | 0.1 | 0.1 | |||||||||||||||||||||||||||
Total RMBS Agency | $ | 2,372.2 | $ | 115.0 | $ | 2,487.2 | $ | 44.9 | $ | (47.8 | ) | 4.9 | % | $ | (0.1 | ) | $ | (0.5 | ) | |||||||||||||||||||||
Non-Agency | ||||||||||||||||||||||||||||||||||||||||
2013 | $ | 22.9 | $ | — | $ | 22.9 | $ | 0.7 | $ | — | 4.3 | % | 1,165.0 | 1,165.0 | 1,165.0 | $ | 0.1 | $ | 0.1 | |||||||||||||||||||||
2008 - 2012 | 15.9 | 0.2 | 16.1 | 1.0 | — | 4.3 | % | 1,159.0 | 1,159.0 | 1,159.0 | — | — | ||||||||||||||||||||||||||||
2007 | 13.9 | 1.4 | 15.3 | 3.9 | — | 5.8 | % | — | 68.6 | 274.6 | — | — | ||||||||||||||||||||||||||||
2006 | 60.8 | 3.0 | 63.8 | 7.4 | (0.3 | ) | 5.7 | % | 23.5 | 88.1 | 265.3 | — | — | |||||||||||||||||||||||||||
2005 | 74.5 | 1.8 | 76.3 | 3.2 | — | 5.6 | % | 203.9 | 220.2 | 369.0 | — | — | ||||||||||||||||||||||||||||
2004 & Prior | 111.2 | 3.7 | 114.9 | 2.4 | (0.1 | ) | 5.8 | % | 345.4 | 351.7 | 437.7 | 0.1 | — | |||||||||||||||||||||||||||
Non-Agency CMO | 299.2 | 10.1 | 309.3 | 18.6 | (0.4 | ) | 5.5 | % | 334.9 | 357.6 | 472.2 | 0.2 | 0.1 | |||||||||||||||||||||||||||
Total RMBS Non-Agency | $ | 299.2 | $ | 10.1 | $ | 309.3 | $ | 18.6 | $ | (0.4 | ) | 5.5 | % | $ | 0.2 | $ | 0.1 | |||||||||||||||||||||||
Total RMBS | $ | 2,671.4 | $ | 125.1 | $ | 2,796.5 | $ | 63.5 | $ | (48.2 | ) | 5.0 | % | $ | 0.1 | $ | (0.4 | ) | ||||||||||||||||||||||
Top 10 RMBS | ||||||||||||||||||||||||||||||||||||||||||
Sep 30, 2013 Trailing 12 Month | Prepayment Speed Adjustment 2 | |||||||||||||||||||||||||||||||||||||||||
Name | Vintage | Amortized Cost | Unrealized Gain/ (Loss) | Fair Value | Gross Discount | Gross Premium | Average Mortgage Loan Rate | 3Q 2013 Average Prepayment Speed | Average Prepayment speed | Max Prepayment speed | 3Q 2013 | YTD 2013 | ||||||||||||||||||||||||||||||
GNMA | 2009 | $ | 82.5 | $ | 1.5 | $ | 84.0 | $ | — | $ | (4.8 | ) | 6.2 | % | 3.3 | 3.1 | 5.4 | $ | 0.1 | $ | — | |||||||||||||||||||||
GNMA | 2009 | 78.8 | 1.6 | 80.4 | — | (4.4 | ) | 6.2 | % | 5.0 | 3.4 | 5.0 | — | — | ||||||||||||||||||||||||||||
GNMA | 2009 | 46.3 | 1.7 | 48.0 | — | (1.5 | ) | 6.2 | % | 4.8 | 6.7 | 11.2 | — | — | ||||||||||||||||||||||||||||
GNMA | 2010 | 41.3 | 0.7 | 42.0 | — | (1.7 | ) | 4.5 | % | 16.7 | 18.6 | 21.6 | — | — | ||||||||||||||||||||||||||||
FNMA | 2009 | 38.8 | 2.3 | 41.1 | — | (0.9 | ) | 5.5 | % | — | — | — | — | — | ||||||||||||||||||||||||||||
GNMA | 2010 | 36.1 | 1.2 | 37.3 | — | (1.8 | ) | 4.9 | % | 462.0 | 418.0 | 462.0 | 0.1 | 0.2 | ||||||||||||||||||||||||||||
FNMA | 2009 | 35.5 | 1.8 | 37.3 | — | (1.2 | ) | 5.4 | % | 26.4 | 24.3 | 26.4 | — | — | ||||||||||||||||||||||||||||
GNMA | 2009 | 28.0 | 1.1 | 29.1 | — | (0.9 | ) | 4.9 | % | 432.0 | 421.8 | 452.0 | 0.1 | 0.2 | ||||||||||||||||||||||||||||
FHLMC | 2004 | 27.3 | 1.9 | 29.2 | 0.1 | — | 5.5 | % | 702.0 | 679.3 | 718.0 | — | — | |||||||||||||||||||||||||||||
GNMA | 2010 | 24.7 | 1.4 | 26.1 | 0.4 | — | 4.5 | % | 329.0 | 375.3 | 406.0 | — | — | |||||||||||||||||||||||||||||
Total | $ | 439.3 | $ | 15.2 | $ | 454.5 | $ | 0.5 | $ | (17.2 | ) | $ | 0.3 | $ | 0.4 | |||||||||||||||||||||||||||
1 Vintage indicates year of origination.
2 The CMO securities prepayment speed adjustment is estimated using the Public Securities Association prepayment model. The passthrough securities prepayment speed adjustment is estimated using the Conditional Prepayment Rate model.
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Symetra Financial Corporation
3Q 2013 Financial Supplement
Addendum
CMBS Prepayment Exposure
(In millions)
Prepayment Speed Adjustment 2 | |||||||||||||||||||||||||||||||
Vintage 1 | Amortized Cost | Unrealized Gain/(Loss) | Fair Value | Gross Discount | Gross Premium | Average Mortgage Loan Rate | 3Q 2013 | YTD 2013 | |||||||||||||||||||||||
Agency | |||||||||||||||||||||||||||||||
CMO | |||||||||||||||||||||||||||||||
2011 | $ | 44.4 | $ | 0.8 | $ | 45.2 | $ | — | $ | (0.8 | ) | 4.8 | % | $ | — | $ | — | ||||||||||||||
2010 | 10.0 | 0.9 | 10.9 | — | (0.1 | ) | 5.4 | % | — | — | |||||||||||||||||||||
2009 | 11.3 | 0.4 | 11.7 | — | — | 6.6 | % | — | — | ||||||||||||||||||||||
2008 | 10.8 | 0.1 | 10.9 | — | (0.3 | ) | 6.5 | % | (0.1 | ) | (0.1 | ) | |||||||||||||||||||
2007 | 36.9 | 0.6 | 37.5 | — | (1.3 | ) | 5.8 | % | (0.1 | ) | (0.2 | ) | |||||||||||||||||||
2006 | 15.1 | — | 15.1 | — | (0.8 | ) | 6.0 | % | (0.1 | ) | (0.1 | ) | |||||||||||||||||||
2005 | 15.4 | — | 15.4 | — | (0.3 | ) | 5.9 | % | (0.1 | ) | (0.1 | ) | |||||||||||||||||||
2004 & Prior | 63.8 | 5.4 | 69.2 | — | (1.4 | ) | 7.0 | % | — | (0.2 | ) | ||||||||||||||||||||
Agency CMO | $ | 207.7 | $ | 8.2 | $ | 215.9 | $ | — | $ | (5.0 | ) | 6.1 | % | $ | (0.4 | ) | $ | (0.7 | ) | ||||||||||||
Passthrough | |||||||||||||||||||||||||||||||
2005 - 2013 | $ | — | $ | — | $ | — | $ | — | $ | — | 0.0 | % | $ | — | $ | — | |||||||||||||||
2004 & Prior | 67.8 | 3.7 | 71.5 | 0.2 | (1.8 | ) | 7.5 | % | — | — | |||||||||||||||||||||
Agency Passthrough | 67.8 | 3.7 | 71.5 | 0.2 | (1.8 | ) | 7.5 | % | — | — | |||||||||||||||||||||
Total CMBS Agency | $ | 275.5 | $ | 11.9 | $ | 287.4 | $ | 0.2 | $ | (6.8 | ) | 6.4 | % | $ | (0.4 | ) | $ | (0.7 | ) | ||||||||||||
Non-Agency | |||||||||||||||||||||||||||||||
2013 | $ | 111.0 | $ | (3.1 | ) | $ | 107.9 | $ | — | $ | (3.0 | ) | 4.4 | % | $ | — | $ | — | |||||||||||||
2012 | 132.8 | (5.1 | ) | 127.7 | — | (2.6 | ) | 4.9 | % | — | — | ||||||||||||||||||||
2011 | 118.5 | 4.5 | 123.0 | — | (0.6 | ) | 5.5 | % | — | — | |||||||||||||||||||||
2010 | 1.0 | — | 1.0 | — | — | 4.0 | % | — | — | ||||||||||||||||||||||
2009 | — | — | — | — | — | 0.0 | % | — | — | ||||||||||||||||||||||
2008 | 55.7 | 5.0 | 60.7 | 1.1 | (0.1 | ) | 6.1 | % | — | — | |||||||||||||||||||||
2007 | 350.3 | 46.1 | 396.4 | 10.9 | (0.2 | ) | 5.7 | % | — | — | |||||||||||||||||||||
2006 | 169.8 | 18.7 | 188.5 | 4.3 | (0.6 | ) | 5.8 | % | 0.1 | 0.2 | |||||||||||||||||||||
2005 | 200.0 | 16.1 | 216.1 | 4.0 | — | 5.4 | % | — | (0.1 | ) | |||||||||||||||||||||
2004 & Prior | 25.9 | 1.5 | 27.4 | — | (1.1 | ) | 7.4 | % | — | — | |||||||||||||||||||||
Non-Agency CMO | 1,165.0 | 83.7 | 1,248.7 | 20.3 | (8.2 | ) | 5.5 | % | 0.1 | 0.1 | |||||||||||||||||||||
Total CMBS Non-Agency | $ | 1,165.0 | $ | 83.7 | $ | 1,248.7 | $ | 20.3 | $ | (8.2 | ) | 5.5 | % | $ | 0.1 | $ | 0.1 | ||||||||||||||
Total CMBS | $ | 1,440.5 | $ | 95.6 | $ | 1,536.1 | $ | 20.5 | $ | (15.0 | ) | 5.7 | % | $ | (0.3 | ) | $ | (0.6 | ) | ||||||||||||
Top 10 CMBS | |||||||||||||||||||||||||||||||||
Prepayment Speed Adjustment 2 | |||||||||||||||||||||||||||||||||
Name | Vintage | Amortized Cost | Unrealized Gain/(Loss) | Fair Value | Gross Discount | Gross Premium | Average Mortgage Loan Rate | 3Q 2013 | YTD 2013 | ||||||||||||||||||||||||
Bear Stearns Commercial Mortgage | 2006 | $ | 49.1 | $ | 5.8 | $ | 54.9 | $ | 0.9 | $ | — | 5.9 | % | $ | 0.1 | $ | 0.1 | ||||||||||||||||
Bear Stearns Commercial Mortgage | 2007 | 48.7 | 6.1 | 54.8 | 1.3 | — | 5.1 | % | — | 0.2 | |||||||||||||||||||||||
GS Mtg Sec Corp II | 2005 | 44.7 | 6.3 | 51.0 | 0.3 | — | 5.6 | % | — | — | |||||||||||||||||||||||
Morgan Stanley BAML Trust | 2012 | 43.0 | (1.9 | ) | 41.1 | — | (0.9 | ) | 4.7 | % | — | — | |||||||||||||||||||||
Wachovia Bank Commercial Mortgage | 2006 | 39.5 | 4.4 | 43.9 | 0.5 | — | 6.0 | % | — | — | |||||||||||||||||||||||
GNMA | 2007 | 36.3 | 0.7 | 37.0 | — | (1.3 | ) | 5.8 | % | (0.2 | ) | (0.2 | ) | ||||||||||||||||||||
Bear Stearns Commercial Mortgage | 2007 | 35.9 | 5.3 | 41.2 | 0.7 | — | 5.9 | % | — | (0.1 | ) | ||||||||||||||||||||||
JP Morgan Chase Commercial Mortgage | 2007 | 34.2 | 3.7 | 37.9 | 0.1 | — | 5.7 | % | — | — | |||||||||||||||||||||||
Bear Stearns Commercial Mortgage | 2007 | 33.3 | 7.4 | 40.7 | 3.1 | — | 5.7 | % | — | (0.1 | ) | ||||||||||||||||||||||
GNMA | 2011 | 33.2 | 0.4 | 33.6 | — | (0.6 | ) | 4.7 | % | — | — | ||||||||||||||||||||||
Total | $ | 397.9 | $ | 38.2 | $ | 436.1 | $ | 6.9 | $ | (2.8 | ) | $ | (0.1 | ) | $ | (0.1 | ) | ||||||||||||||||
1 Vintage indicates year of origination.
2 The CMO securities prepayment speed adjustment is estimated using the Public Securities Association prepayment model. The passthrough securities prepayment speed adjustment is estimated using the Conditional Prepayment Rate model.
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Symetra Financial Corporation
3Q 2013 Financial Supplement
Addendum
European Exposure
(In millions)
Sector | |||||||||||||||||||||||
Country | Amortized Cost | Fair Value | % of Exposure | Sovereign Debt | Financial Industry | Other Corporate | |||||||||||||||||
United Kingdom | $ | 713.5 | $ | 749.1 | 37.8 | % | $ | — | $ | 84.8 | $ | 664.3 | |||||||||||
Netherlands | 593.8 | 614.2 | 31.0 | % | — | — | 614.2 | ||||||||||||||||
France | 217.5 | 222.5 | 11.2 | % | — | 18.1 | 204.4 | ||||||||||||||||
Luxembourg | 184.1 | 191.4 | 9.6 | % | — | — | 191.4 | ||||||||||||||||
Switzerland | 88.2 | 94.6 | 4.8 | % | — | 94.6 | — | ||||||||||||||||
Sweden | 55.3 | 61.2 | 3.1 | % | — | — | 61.2 | ||||||||||||||||
Denmark | 16.9 | 16.2 | 0.8 | % | — | — | 16.2 | ||||||||||||||||
Italy | 9.8 | 10.4 | 0.5 | % | — | — | 10.4 | ||||||||||||||||
Germany | 7.7 | 8.3 | 0.4 | % | — | — | 8.3 | ||||||||||||||||
Norway | 5.4 | 6.2 | 0.3 | % | — | — | 6.2 | ||||||||||||||||
Austria | 3.9 | 3.9 | 0.2 | % | — | — | 3.9 | ||||||||||||||||
Spain | 2.8 | 2.8 | 0.1 | % | — | — | 2.8 | ||||||||||||||||
Belgium | 1.7 | 1.7 | 0.1 | % | — | — | 1.7 | ||||||||||||||||
Ireland | 1.0 | 1.1 | 0.1 | % | — | — | 1.1 | ||||||||||||||||
Portugal | 0.7 | 0.7 | 0.0 | % | 0.7 | — | — | ||||||||||||||||
Total | $ | 1,902.3 | $ | 1,984.3 | 100.0 | % | $ | 0.7 | $ | 197.5 | $ | 1,786.1 | |||||||||||
Top 10 European Exposures | ||||||||||||
Name | Amortized Cost | Fair Value | Moody's | S&P | ||||||||
Deutsche Telekom Int Fin | $ | 147.3 | $ | 151.1 | Baa1 | BBB+ | ||||||
Heineken NV | 119.6 | 113.4 | Baa1 | BBB+ | ||||||||
Royal Dutch Shell PLC | 98.6 | 108.2 | Aa1 | AA | ||||||||
Electricite de France | 97.4 | 100.6 | Aa3 | A+ | ||||||||
Diageo Capital PLC | 87.9 | 90.9 | A3 | A- | ||||||||
TYCO Int'l | 81.5 | 88.7 | A3 | BBB+ | ||||||||
Vodafone Group PLC | 79.7 | 87.8 | A3 | A- | ||||||||
Tesco PLC-ADR | 76.0 | 87.0 | Baa1 | BBB+ | ||||||||
Philips Electronics NV | 71.9 | 81.7 | A3 | A- | ||||||||
SABMiller PLC | 65.4 | 73.7 | Baa1 | BBB+ | ||||||||
Total | $ | 925.3 | $ | 983.1 | ||||||||
The table above summarizes our exposure to fixed maturities in European countries, reported in U.S. dollars and separated into sovereign debt, financial industry and other corporate debt. The country designation is based on the issuer’s country of incorporation.
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