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S E C U R I T Y B E N E F I T
A Company You Can Trust2 0 1 4 E D I T I O N
A Company You Can Trust
A UNIQUE HISTORY
A LEADER TODAY
STRENGTH IN OUR NUMBERS
“For more than 120 years we’ve been helping people overcome financial challenges and reach their goals. We’ve dedicated ourselves to helping you To and Through Retirement®.”
– Mike Kiley
Thank you for considering Security Benefit for your retirement.
More than 120 years ago, 11 men with $11 formed, what is today, Security Benefit
to provide life insurance coverage for everyday working people. It was a novel idea in
1892, when life insurance was almost exclusively for the affluent. Life insurance for
the working man was followed by several other groundbreaking ideas, including life
insurance for women and being one of the first insurance companies to exclusively
pursue the retirement market.
For more than 40 years, we have focused on helping Americans retire,
especially K-12 educators. Four years ago, we charted the course to transform
from a solid, Midwest specialty retirement company into a market leader in
multiple wealth segments and marketplaces. Today we are a clear leader in several
important market categories.
As of fourth quarter 2013, we were number two in overall fixed annuity sales,
number two in bank market fixed annuity sales, number two in fixed indexed annuity
sales for fourth quarter, and fifth in K-12 education market sales1.
Assets Under Management (AUM), Sales, Net Flows and Capital Surplus were all
at record levels for us in 2013. I’m very proud of not only our continued growth but
that we continue to retain our current customers. All of these metrics speak to the
quality of our products and their performance, our service and the satisfaction of the
financial advisors who recommend our products and our clients.
Helping people prepare for retirement is a noble and worthwhile endeavor. You
have a choice when it comes to the companies and products that will help you
achieve your retirement goals. We appreciate your trust in us to help you retire. You
have helped make Security Benefit the successful company we are today, and we do
not take that for granted. I thank you for giving us the opportunity to serve you, as
does the entire Security Benefit organization.
Michael P. Kiley
Chief Executive Officer
Security Benefit Corporation
1Beacon Research, 2014/01/07 http://www.annuitymarketstudy.com/charts/home. Includes MVA, non-MVA, Indexed and Fixed Income. LIMRA. 403(b) Market Segment, Not-for-Profit Market; First Quarter 2014.
A Company You Can Trust
3
3As of December 31, 2013. 4As of December 31, 2013. Total Statutory Adjusted Capital represents Total Policyholder’s Surplus plus the Asset Valuation Reserve.
The forward-thinking fraternal society was among the first to accept women as
equals, provide life insurance to everyday people and focus on caring for the
community. These core values served as the foundation upon which Security Benefit
is built today.
Later known as the Security Benefit Association, SBA continued to show its
commitment to helping the community. Members donated nickels to help fund a
mutual cooperative farm, a children’s orphanage, a home for the elderly, a private
school and a hospital. The first dormitory to accommodate children who were
orphans of members was fondly called “The Home That Nickels Built.”
During World War I and World War II, SBA offered expanded coverage to members
who served in the military, despite the financial turmoil the wars caused for the
organization. A Patriotic Fund was created by members to support fellow military members.
After World War II, SBA evolved from a fraternal society to Security Benefit Life
Insurance Company (Security Benefit Life), a mutual reserve life insurance company.
In the 1960s and ’70s, we were an early entrant in the U.S. retirement market and
introduced one of the first Variable Annuities (VAs) in the country. Around that same
time, the organization began focusing on the retirement savings market for education
and public employees. Eventually, the organization was named the provider of
retirement savings products for the National Education Association (NEA).
Success in retirement markets led to greater emphasis in this rapidly growing
sector. Over the 1980s and ’90s, we exited the life, health and disability markets and
became one of the first insurance companies to focus fully on retirement. Then in
2010, we were acquired by an investor group led by Guggenheim Partners.
Impressive strides have been made. Over the last three years, the company has
either been affirmed or upgraded on four consecutive occasions by S&P® and on
three consecutive occasions by A.M. Best, while during this same timeframe many
within the industry were downgraded. We believe this speaks to the success we are
pursuing and experiencing.
Security Benefit Life’s 2013 Total Policyholder’s Surplus was more than
$1 billion3; our Total Statutory Adjusted Capital4 was more than $1.2 billion. This
level reinforces our confidence that our obligations to our customers will continue
to be paramount, just as they have for the last 122 years. With that as our focus,
we are committed to helping our customers meet their retirement goals.
In a small Topeka, Kansas, drugstore in 1892, Dr. H.A. “Doc” Warner encouraged 11 men to contribute
$1 each to help form “The Knights and Ladies of Security.”
A Unique History
Secur i t y Benef i t
4
“The Home That Nickels Built.”
Men hold signs promoting the Knights and Ladies of Security insurance company, founded in 1892.
5
A Leader Today
Security Benefit – A Company You Can TrustSecurity Benefit Corporation is a leader in the U.S. retirement market. Security
Benefit Corporation serves multiple wealth segments and channels of distribution
through our commitment to a more focused, effective and strategically driven
distribution structure.
With a strong vision, we have grown rapidly over the last few years to take a
leadership position in a number of important markets.
Our history and strength lie in specialty markets (as illustrated in our history on
page 4). We took that core capability and strength and applied it to expanding our
presence to the full range of retirement markets and wealth segments. With these
strategies in place, we have experienced tremendous growth over most of our peers.
By leveraging the superior general account management capabilities of
Guggenheim Investments, the investment management business of Guggenheim
Partners, we are able to provide you highly competitive products and rates through
select independent financial advisors to address your retirement needs. Learn more
about Security Benefit by visiting SecurityBenefit.com.
$24.8 Billionaum
Mutual Fund Custodial Accounts
$3.8 Billion
SBL Separate Account
$6 Billion
SBL General Account
$15 Billion
Security Benefit – Consolidated Assets Under Management5
5As of December 31, 2013.
A Company You Can Trust
7
About Guggenheim Partners Guggenheim Partners is a privately held global financial services firm with more than
$200 billion in assets under management.6 The firm provides asset management,
investment banking and capital markets services, insurance services, institutional
finance and investment advisory solutions to institutions, governments and agencies,
corporations, investment advisors, family offices and individuals.
ȥ $200 billion assets under management6
ȥ $122 billion institutional fixed income7
ȥ $89 billion insurance company general account assets7
Guggenheim Investments is the investment management business of
Guggenheim Partners. Guggenheim’s overall goal is to deliver superior risk-adjusted
returns to protect and grow the clients’ capital. Within each mandate, they recognize
that clients often have specific requirements for income, yield and duration, among
other objectives.
Guggenheim Investments’ investment management expertise is demonstrated
through its industry-wide recognition and accolades. This attribute, coupled with
Security Benefit Life’s retirement product success, make Security Benefit and
Guggenheim Partners a successful example in the area of insurance services.
Guggenheim Partners is dual-headquartered in New York and Chicago and serves
clients around the world from more than 25 offices in eight countries. For more
information, please visit www.guggenheimpartners.com.
6Assets under management are as of December 31, 2013, and include consulting services for clients whose assets are valued at approximately $36 billion. 7As of December 31, 2013.
A Leader Today
Guggenheim Partners – Assets Under Management
$200 Billion6
Assets Under Management
$122 Billion7
Institutional Fixed Income
$89 Billion7
Insurance Company General Account Assets
Secur i t y Benef i t
8
“Security Benefit ranks second in indexed annuity sales.”
– Wink’s Sales and Market Report8
8Wink’s Sales and Market Report, Q4, 2013.
Today, Security Benefit Life is a leader in the U.S. retirement market with $20.7 billion in statutory
assets9 – a 34% increase in asset growth over 2012.
Our financial strength can also be seen in Security Benefit Life’s solvency ratio,
which was 105.3% on December 31, 2013. (See chart on page 11.) Solvency, a
financial-strength measurement, is the ability of a corporation to meet its financial
obligations, both short-term and long-term. For an insurance company, such
obligations include the benefits it has
agreed to pay its customers, such as
the living or death benefits on annuity
contracts. There are numerous ways
to measure an insurer’s solvency or
financial strength, some objective
and some subjective. Solvency ratio is one of these measures. Other measures
include Return on Assets (ROA), Return on Equity (ROE), cash flow, liquidity and
diversification of investments.
Solvency ratios take all of an insurer’s assets (both general and separate
accounts) and divide that number by its total liabilities. The quality of the assets,
liquidity, diversification and other factors are not included in the ratio. In addition,
liabilities may fluctuate daily. We are pleased with SBL’s strong solvency ratio.
We encourage those interested in SBL’s financial position to review our
statutory financial information on our website (SecurityBenefit.com). You can also
receive copies of SBL’s statutory and GAAP financial statements by calling us at
800.888.2461.
9As of December 31, 2013. Statutory Assets reflect only those of Security Benefit Life and not affiliates.
2013 Statutory Revenues: $6.741 billion9
2013 Total Policyholder’s Surplus: $1.245 billion9
Strength in Our Numbers
Secur i t y Benef i t
10
10S&P® Ratings taken from StandardandPoors.com as of March 13, 2014. A.M. Best Ratings taken from A.M. Best Global Insurance Database as of March 13, 2014. Sorted by solvency ratio within ratings category as of March 13, 2014, as provided by A.M. Best Global Insurance Database. Solvency ratio as provided by A.M. Best as of December 31, 2013.11Solvency ratios take all of an insurer’s assets (both general and separate accounts) and divide that number by its total liabilities. The quality of the assets, liquidity, diversification and other factors are not included in the ratio. In addition, liabilities may fluctuate daily.
Security Benefit Life as compared to those considered our peer insurance companies.10
S&P® Rating
A.M. Best Rating
Solvency Ratio11
Security Benefit Life Insurance Company A- B++ 105.3%
Great American Life Insurance Company A+ A 108.10% Insurance
companies with
an A.M. Best
rating of ‘A’
have a median
solvency of
106.19%.
Symetra Life Insurance Company A A 107.38%
Variable Annuity Life Insurance Company A+ A 106.65%
Life Insurance Company of the Southwest A A 106.19%
Horace Mann Life Insurance Company A A 105.39%
Allianz Life Insurance Company of North America AA A 104. 41%
ING Life Insurance and Annuity Company A- A 102.40%
Midland National Life Insurance Company A+ A+ 107.35% Insurance
companies with
an A.M. Best
rating of ‘A+’
have a median
solvency of
103.00%.
Pacific Life Insurance Company A+ A+ 106.34%
MetLife Investors Insurance Company AA- A+ 104.69%
Lincoln National Life Insurance Company AA- A+ 103.54%
Metropolitan Life Insurance Company AA- A+ 103.44%
Nationwide Life Insurance Company A+ A+ 103.03%
Principal Life Insurance Company A+ A+ 102.97%
Jackson National Life Insurance Company AA A+ 102.73%
Pruco Life Insurance Company AA- A+ 102.48%
AXA Equitable Life Insurance Company A+ A+ 102.47%
Great-West Life & Annuity Insurance Company AA A+ 102.39%
Prudential Retirement Ins & Annuity AA- A+ 101.22%
Our Financial Strength Today
The ratings of SBL and other companies are shown in the chart below. The purpose
of the ratings is to reflect the financial strength of the insurer and should not be
considered to have a bearing on the investment performance of assets held in
any SBL separate account. Rating agencies take many factors into account when
assigning a financial strength or claims-paying rating to an insurer. For a more
complete understanding of the reasons for the ratings assigned to SBL, please refer
to the ratings assessment of SBL.
A Company You Can Trust
11
“Security Benefit ranks third in overall fixed annuities sales.”
– ThinkAdvisor12
12ThinkAdvisor, Top 20 Companies for Annuity Sales: 2013, March 17, 2014.
13As of March 31, 2014.14As of August 8, 2014
Ratings Strength Over the last four years, Security Benefit has either been affirmed or upgraded
on four consecutive occasions by S&P® and on three consecutive occasions
by A.M. Best, while during this same timeframe many within the industry were
downgraded. We continue to work closely with these industry groups in the
belief that our significant and strategic
growth will be recognized through
additional ratings upgrades.
While others in the industry are
either pulling back or retreating from the
market, Security Benefit is growing. We
are adding staff and developing new products to help you meet your retirement goals.
With a strong ratings outlook and financial footing, Security Benefit is optimistic
about the future.
Our Financial Strength Today
A- Strong
B++Good
S&P® Rating13 A.M. Best Rating14
While others in the industry are either pulling back or retreating from the market, Security Benefit is growing.
A Company You Can Trust
13
Conservative Long-Term Bond Portfolio
Security Benefit Life General Account Long-Term Bonds Portfolio Allocation15
2014
35.2%Asset-Backed
SecuritiesResidential Mortgage-
Backed SecuritiesInvestment Grade
CorporatesGovernment Municipal Bonds
9.7% 23.2% 8.2% 4.2%
6.5%Commercial Mortgage-
Backed SecuritiesPrivate
Placement BondsHybrid Other Total
6.6% 0.6% 5.7% 100%
National Association of Insurance Commissioners (NAIC) Ratings of Our Portfolio
Security Benefit Life General Account Long-Term and Short-Term Bonds and Preferred Stock Quality Allocation16
52.6%NAIC 1 (Aaa/Aa/A) NAIC 2 (Baa) NAIC 3 (Ba) NAIC 4 (B)
42.7% 2.8% 1.2%
0.7%NAIC 5
(Caa & lower)NAIC 6
(In or near default)
0.0%Total100%
2014
15As of December 31, 2013. Includes long-term bond assets only. 16As of December 31, 2013. Fixed maturity securities by NAIC.
A Conservative General Account Portfolio
Secur i t y Benef i t
14
Retire Confidently
Let Security Benefit help you work toward your goal of a
comfortable and secure retirement. We offer a range of
retirement solutions including:
ȥ Tax-deferral savings products17
ȥ Guaranteeing a stream of income you cannot outlive18
ȥ Access to your money when you need it19
Services are offered through and securities are distributed by Security Distributors, Inc.
(SDI), a subsidiary of SBL, which is wholly owned by Security Benefit Corporation
(“Security Benefit”).
17 Withdrawals are subject to ordinary income tax and, if made before age 59½, may be subject to a 10% IRS penalty tax. 18 Guarantees are subject to the claims-paying ability of the issuing insurance company. 19 Depending on the product, early withdrawals will be subject to a surrender charge, bonus recapture and/or market
value adjustment.
38-10670-01 2014/08/15
T O A N D T H R O U G H R E T I R E M E N T
One Security Benefit Place | Topeka, Kansas 66636-0001 | SecurityBenefit.com
Ask your Financial Professional if a Security Benefit product
could be right for you and let us help you
To and Through Retirement®.
800.888.2461
Security Benefit’s history, financial strength, and innovative products make us a wise choice to help you
To and Through Retirement® .
A N N U I T I E S • M U T U A L F U N D S • R E T I R E M E N T P L A N S