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Mutual of Omaha2015 Financial Review
Laura FenderSenior Vice President,
Enterprise Reporting and AnalysisApril 25, 2016
Forward-Looking Statements
2
This document contains certain forward-looking statements about Mutual of Omaha Insurance Company and certain of its subsidiaries (collectively, the “Company”). Forward-looking statements include, but are not limited to, statements that represent the Company’s beliefs concerning future operations, strategies, financial results or other developments with respect to the Company, and contain words and phrases such as “may,” “expects,” “should” or similar expressions in this document. Forward-looking statements are not guarantees of future performance, involve risks and uncertainties, and actual results may differ materially from those in any forward-looking statement as a result of various factors. The following uncertainties, among others, may have such an effect: continued difficult conditions in the global capital markets and the economy; sustained periods of low interest rates or a sudden spike in interest rates; declining or volatile residential mortgage-backed securities values due to prepayment risks; adverse regulatory developments, including those resulting from the Dodd-Frank Wall Street Reform and Consumer Protection Act, limitations on premium levels, mandated benefits, increases in minimum capital and reserves, and other financial viability requirements; adverse credit market conditions; significant market valuation fluctuations of certain of the Company’s investments that are relatively illiquid; difficulties as to valuation of securities in the Company’s investment portfolio; exposure to below investment grade bonds; defaults on mortgage loans held by the Company; exposure to certain specific asset classes, including commercial and residential mortgage-backed securities, real estate and alternative investments; declines in the performance or valuation of real estate properties owned by the Company; heightened competition in the insurance or banking business, including, specifically, the intensification of price competition, the entry of new competitors and the development of new products by new and existing competitors; downgrades or potential downgrades in the Company’s ratings; the sensitivity of the amount of statutory capital the Company must hold to factors outside the Company’s control; subjectivity in determining the amount of allowances and impairments taken on certain of the Company’s investments; changes in the federal Medicare program and other adverse regulatory developments, including those resulting from the recently enacted Patient Protection and Affordable Care Act, that could adversely affect the demand for the Company’s Medicare supplement insurance policies or the Company’s competitive position in the Medicare supplement marketplace; impact on the Company’s reported statutory surplus or net income that could result from the adoption of certain accounting standards issued by the National Association of Insurance Commissioners or pursuant to applicable laws and regulations; impact on the Company’s reported GAAP equity or net income that could result from the adoption of the requirements of certain accounting pronouncements issued by authoritative bodies; tax law changes impacting the tax treatment of insurance and investment products; repeal of the federal estate tax; uncertainty as to the price and availability of reinsurance on business the Company currently writes or intends to write in the future; adequacy and recoverability of reinsurance that the Company has purchased; the failure of the Company’s distribution channels to obtain new customers or retain existing customers; deviations from assumptions regarding persistency, mortality, or morbidity; losses due to the financial impairment of, or defaults by, others, including bank borrowers, issuers of investment securities or reinsurance and derivative instrument counterparties; deviations from assumptions regarding future mortality, morbidity and interest rates used in calculating reserve amounts and pricing our products; requirements to post collateral or make payments related to declines in market value of specified assets, and possible declines in the value of securities available for posting as collateral; unanticipated losses resulting from the Company’s stable value wrap program; accelerated amortization of deferred acquisition costs; adverse results relating to the mixed-use real estate development adjacent to the Company’s home office property; regulatory restrictions, financial viability and other risks in connection with the Company’s ownership of Mutual of Omaha Bank; liquidity and other risks in connection with the Company’s securities lending program; impact of international tension between the United States and other nations, terrorist attacks, and ongoing military and other actions, or a large scale pandemic; changes in tax laws and the interpretation thereof; litigation and regulatory investigations; and a computer system failure or security breach.Consequently, such forward-looking statements should be regarded solely as the Company’s current plans, estimates and beliefs. The Company does not intend to undertake, and does not undertake, any obligation to update any forward-looking statements to reflect future events or circumstances after the date of such statements.All subsequent written and oral forward-looking information attributable to the Company or any person acting on its behalf is expressly qualified in its entirety by the cautionary statements contained or referred to in this section. The information contained in this document is accurate only as of the date of this document regardless of the time of delivery.
Organization and Ratings
Mutual of Omaha Insurance Company (Parent)
United of Omaha Life Insurance Company
Companion Life Insurance Company
United World Life Insurance Company
Omaha Financial Holdings, Inc.
Other Small Affiliates
3
Three Primary Strategic Business Units (SBUs)
Individual Financial
Services (IFS)
Group Benefit Services (GBS)
Bank
Financial Strength Ratings
A.M. Best A+ (Superior)Moody’s A1 (Good)Standard & Poor’s AA- (Very Strong)
Short-term Ratings
Moody’s P-1 (Prime-1, Superior)Standard & Poor’s A-1+ (Extremely Strong)
4,359 4,602 4,734
5,140 5,127
‐
1,000
2,000
3,000
4,000
5,000
2011 2012 2013 2014 2015
GAAP Consolidated Assets and EquityFor the Years Ended December 31, 2011 – 2015In Millions of Dollars
29,198 30,908
32,234 34,481 35,629
‐
5,000
10,000
15,000
20,000
25,000
30,000
35,000
40,000
2011 2012 2013 2014 2015
EquityAssets
4
GAAP ResultsFor the Years Ended December 31, 2011 – 2015 In Millions of Dollars
128
406
492 510 500
‐
50
100
150
200
250
300
350
400
450
500
550
2011 2012 2013 2014 2015
Net IncomeOperating Income
5
112
284
359
292
333
‐
50
100
150
200
250
300
350
400
2011 2012 2013 2014 2015
Consolidated GAAP RevenueFor the Year Ended December 31, 2015
2015 Revenues $7.2 Billion
IFS Med supp40%
IFS LTC5%
IFS Life22%
IFS Annuity3%
IFS Other 3%
GBS Benefit Solutions
15%
GBS Retirement
Plans8%
Bank 3%
Corporate1%
6
Statutory Operating ResultsFor the Years Ended December 31, 2011 – 2015In Millions of Dollars
(138)
200 272
343 288
(150)
(100)
(50)
‐
50
100
150
200
250
300
350
2011 2012 2013 2014 2015
7
2,315 2,406
2,675 2,796 2,863
448% 450%
489% 484%476%
420%
440%
460%
480%
500%
520%
540%
560%
1,500
1,700
1,900
2,100
2,300
2,500
2,700
2,900
3,100
2011 2012 2013 2014 2015
(Per
cent
)
(In M
illio
ns o
f Dol
lars
)
Surplus Consolidated RBC
Statutory Surplus andConsolidated Risk-Based CapitalAs of December 31, 2011 – 2015
8
United of OmahaStatutory Operating ResultsFor the Years Ended December 31, 2015 – 2012(In Millions of Dollars)
10
2013 201220142015
Premiums and Annuity Considerations $3,572 $2,713 $3,428 $3,466
Net Investment Income and IMR Amortization 829 722 701 692
Other Income 124 139 107 84
Total Income 4,525 3,574 4,236 4,242
Commissions, Operating Expenses
and Insurance Taxes 4,310 3,389 4,149 4,266
Net Gain (Loss) Before Federal Income Taxes 215 185 87 (24)
Federal Income Tax (Benefit) 38 2 1 (3)
Net Gain (Loss) From Operations 177 183 86 (21)
Net Realized Capital Losses (23) (19) (16) (10)
Net Gain (Loss) $ 154 $ 164 $ 70 $ (31)
Health $ 114 $ 115 $ 61 $ (57)
Life (109) (16) (44) (12)
Annuity 50 62 75 67
Other 161 24 (5) (22)
Net income (loss) before federal income taxes $ 216 $ 185 $ 87 $ (24)
11
20122015 2014 2013
United of OmahaStatutory Operating ResultsFor the Years Ended December 31, 2015 – 2012(In Millions of Dollars)
12
United of OmahaStatutory PremiumFor the Years Ended of December 31, 2012 - 2015
3,466 3,428
2,713
3,572
0
500
1,000
1,500
2,000
2,500
3,000
3,500
4,000
2012 2013 2014 2015
(In M
illions of D
ollars)
• Medicare supplement are reinsured with Mutual beginning in 2013
• In 2014 premiums of $840M were ceded to a captive reinsurance subsidiary under a 3X/A3X reserve financing transaction
• Individual life product sales increased in 2015
1,036 1,027
1,227
1,423 1,442
‐
250
500
750
1,000
1,250
1,500
2011 2012 2013 2014 2015
15,738 16,698
18,122 18,787
19,623
‐
2,500
5,000
7,500
10,000
12,500
15,000
17,500
20,000
2011 2012 2013 2014 2015
SurplusAssets
13
United of OmahaStatutory Operating ResultsFor the Years Ended December 31, 2011 – 2015(In Millions of Dollars)
1,036 1,027 1,227
1,423 1,442
347% 333%382% 405% 397%
0%
100%
200%
300%
400%
500%
600%
700%
-
200
400
600
800
1,000
1,200
1,400
1,600
2011 2012 2013 2014 2015
(In M
illio
ns o
f Dol
lars
)
Surplus RBC
United of OmahaStatutory Surplus and Risk-Based CapitalFor the Years Ended December 31, 2011– 2015
14
CompanionStatutory Operating Results, Surplus & RBC For the Years Ending December 31, 2011 – 2015 (In Millions of Dollars)
1
10
2
(3)
(6)
($10)
($5)
$0
$5
$10
2011 2012 2013 2014 2015
Operating Results
16
66 59 47
57 51
485%
367%
244%
301%252%
0%
100%
200%
300%
400%
500%
600%
$0
$10
$20
$30
$40
$50
$60
$70
$80
$90
$100
2011 2012 2013 2014 2015
Surplus and Risk‐Based Capital
Surplus RBC
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