- Q1 2022 Net Loss of $1.3
million, a $2.2 million
Improvement Compared to Q1 2021
- Q1 2022 Renewal Premiums Increased 2% Year-Over-Year to
$36 million, Driven by Growth Across
Life Insurance and Home Service Insurance Segments
- Q1 2022 Total Claims and Surrenders Decreased 7%
Year-Over-Year
- $1.7 billion of Total Assets
at March 31, 2022 with No
Debt
- Book Value per Class A Share at March
31, 2022 of $3.91
AUSTIN,
Texas, May 5, 2022 /PRNewswire/ -- Citizens,
Inc. (NYSE: CIA), today reported financial results for
the first quarter ended March 31,
2022.
Net loss for the first quarter of 2022 totaled $1.3 million, or $0.03 per fully diluted class A share, an
improvement compared to net loss of $3.6
million, or $0.07 per fully
diluted class A share, in the prior-year quarter. The improvement
in net loss was primarily due to decreased death claim benefits, as
well as lower federal tax, general expenses, and property claims,
partially offset by investment related losses.
Management Commentary
"Our overall performance in the
first quarter validates the strategic direction of the company and
the effectiveness of the initiatives we have implemented to enhance
sales practices, expand our network of independent consultants and
mitigate surrenders," said Company vice chairman and CEO,
Gerald W. Shields. "Operationally,
our insurance premiums have continued to grow, claims and
surrenders have continued to decline, and we have introduced new,
innovative, and high-quality products to our current and potential
customer base. Additionally, we have remained committed to
geographic expansion and enhanced distribution capabilities, which
we believe will enhance our revenue and policy diversification and
overall reach in our key target markets. Looking ahead, we believe
continued execution on our strategic plan will translate to
sustainable growth and profitability over the long term."
First Quarter 2022 Financial
Highlights
Total insurance issued for the first quarter of 2022 increased
by over 2% compared to the prior year quarter, to $97.3 million, driven by increases in the Home
Service Insurance segment. Average face value per policy issued for
the first quarter of 2022 in the Life Insurance and Home Service
Insurance segments increased by 15% and 44%, respectively, compared
to the prior year quarter, reflecting the Company's strategic shift
toward higher face value policies.
Total premium revenue for the first quarter of 2022 increased 1%
compared to the same year-ago period, to $39.4 million. The increase was driven by higher
renewal premiums in the Life Insurance and Home Service Insurance
segments, partially offset by lower first year premiums. The first
quarter of 2022 marked the second consecutive quarter of
year-over-year premium growth and was driven by the Company's
ongoing strategic initiatives.
Renewal premiums for the first quarter of 2022 increased 2%
compared to the same year-ago period, to $36
million, with contributions from the Life Insurance and Home
Service Insurance segments. The increase in renewal premiums was
primarily due to continued retention and collection efforts, and
strong prior year quarter first year sales that increased the
Company's policy base.
First year premiums for the first quarter of 2022 were
$3.4 million, compared to
$3.9 million in the same year-ago
period. The decrease in first year premiums was primarily due to
lower first year premium revenues in the Life Insurance
segment.
Total claims and surrenders for the first quarter of 2022
decreased 7%, compared to the same year-ago period, driven by
decreases in death claim benefits and surrenders, which more than
offset higher matured endowment benefits. Overall, death claim
benefits decreased 22% or $1.9
million, primarily due to a lower volume of reported death
claims, including COVID-19 related deaths. Surrender benefits
decreased by 4% or $0.5 million, a
continuation of the improving trends from the second half of
2021.
General expenses for the first quarter of 2022 decreased by
$0.4 million or 3% year-over-year,
driven by lower legal expenses and consulting fees, partially
offset by higher expenses at our principal offices.
First Quarter 2022 Segment Performance and
Highlights
Life Insurance
Overall premium revenue in the Life
Insurance segment for the first quarter of 2022 decreased by less
than 1% compared to the same year-ago period, as strong renewal
premiums were more than offset by lower first year premiums.
First year premiums for the first quarter of 2022 decreased by
$0.5 million, compared to the same
year-ago period. The decrease in first year premiums was primarily
related to reduced sales of existing products in anticipation of
the Company's new Whole Life 360TM product, as well as
continued premium declines in Venezuela due to the departure of a top
distributor. As a result, the amount of insurance and number of
policies issued decreased by 16% and 27%, respectively. The Company
continues to focus on enhancing its distribution through
recruitment efforts, adding 185 new independent consultants across
key regions in the quarter.
Renewal premiums for the first quarter of 2022 increased 1%
compared to the same year-ago period, primarily resulting from the
Company's strategic initiatives focused on reducing early
withdrawals, and strong first year sales in the same year-ago
period.
Total claims and surrenders for the first quarter of 2022
declined 8% year-over-year, driven by lower volumes of death claims
and surrenders, partially offset by higher matured endowments.
Death claims decreased 63%, compared to the prior year period,
which was negatively impacted by elevated claims, including
COVID-19 related death. Policy surrenders decreased 5%, compared to
the same year ago period, driven by the Company's recent strategic
policy initiatives aimed at improving retention, and mitigating and
limiting surrenders.
Home Service Insurance
Total premium revenue in the
Home Service Insurance segment for the first quarter of 2022
increased 4% compared to the prior year quarter, driven by higher
renewal premiums, and continued strong collections. Notably, there
has been strong interest in new product offerings, including
Critical Illness and Security Plan Plus™.
Average policy face amount for the first quarter of 2022
increased by 44%, compared to the same year ago period. The
increase in average policy face amount was primarily due to the
Company's targeted sales campaigns and introduction of the new
Security Plan Plus™ whole life product, which has a higher maximum
face value.
First year premiums for the first quarter of 2022 decreased by
1%, compared to the prior year quarter. The slight decline in first
year premiums was driven by a risk-based curtailment of first year
property insurance premium revenues, which more than offset the
increase in life insurance premiums. Despite the overall decline in
first year premiums, life insurance issued increased by
$10.2 million or 23%.
Renewal premiums for the first quarter of 2022 increased 5%,
compared to prior year period, due to improvements in our
collection and payment processes and strong collection efforts by
our independent agents.
Claims and Surrenders benefits for the first quarter of 2022
decreased 5%, compared to the same year-ago period, primarily due
to a lower volume of reported death claims, including COVID-19
reported claims. Property claims declined 56%, compared to the
first three months of 2021, due to fewer hurricane related
claims.
Investments
Net investment income for the first
quarter of 2022 was $15.5 million, an
improvement compared to $15.2 million
in the prior year period. The increase in net investment income was
driven by higher income from limited partnerships and lower
investment expense, partially offset by lower fixed maturity income
resulting from one-time call redemption income that benefited the
first quarter of 2021. The average pre-tax yield on the investment
portfolio was 4.2%, which was consistent with the first quarter of
2021.
Investment related losses were $0.6
million for the first quarter of 2022 compared to a
$0.3 million gain in the first
quarter of 2021. The decrease was primarily due to changes in the
fair value of equity partially offset by the fair market value
increase in the Company's limited partnership portfolio.
The carrying value of the Company's fixed maturity securities
investment portfolio at March 31, 2022 was $1.4 billion compared to $1.5 billion at December 31, 2021. This
decline reflects interest rate sensitivity on fixed maturity
securities.
About Citizens, Inc
Citizens, Inc. is a financial
services company listed on the New York Stock Exchange under the
symbol CIA. The Company utilizes a three-pronged strategy for
growth based upon worldwide sales of U.S. dollar denominated whole
life cash value insurance policies, life insurance product sales in
the U.S. and final expense and limited liability property product
sales in the U.S. For more information, visit
www.citizensinc.com.
Forward-Looking Statements
This press release contains
forward-looking statements within the meaning of the Private
Securities Litigation Reform Act of 1995, that involve risks and
uncertainties. Forward-looking statements provide current
expectations of future events based on certain assumptions and
include any statement that does not directly relate to any
historical or current fact. Forward-looking statements can
also be identified by words such as "future," "anticipates,"
"believes," "estimates," "intends," "plans," "predicts," "will,"
"would," "could," "can," "may," and similar terms. Such
forward-looking statements may relate to the Company's expectations
regarding the impact of the COVID-19 pandemic, business
performance, operational strategy and other financial and
operational measures. Such statements are not guarantees of future
performance and involve certain risks, uncertainties and
assumptions, which are difficult to predict and many of which are
beyond our control. Therefore, actual outcomes and results may
differ materially from those matters expressed or implied in such
forward-looking statements. The risks, uncertainties and
assumptions that are involved in our forward-looking statements
include, but are not limited to the risk factors discussed in our
most recently filed periodic reports on Form 10-K and Form 10-Q.
The Company assumes no obligation to revise or update any
forward-looking statements for any reason, except as required by
law. You should be aware that factors not referred to herein
could affect the accuracy of our forward-looking statements and use
caution and common sense when considering our forward-looking
statements.
Contact Information
Investors
Matt Glover
and Matthew Hausch
Gateway Group, Inc.
(949) 574-3860
CIA@gatewayir.com
Selected
Consolidated Financial Data
|
|
|
|
For the periods
ended as of
|
Three months
ended
March
31
|
(In thousands,
except share data)
|
2022
|
2021
|
|
|
|
Balance sheet
data
|
|
|
Total assets
|
$
1,732,961
|
1,781,653
|
Total liabilities
|
1,536,059
|
1,540,813
|
Total stockholders' equity
|
196,902
|
240,840
|
Life insurance in force
|
4,152,574
|
4,131,919
|
|
|
|
Operating
items
|
|
|
Insurance premiums
|
$
39,364
|
39,032
|
Net
investment income
|
15,487
|
15,244
|
Investment related gains (losses)
|
(582)
|
292
|
Total Revenues
|
55,357
|
55,483
|
|
|
|
Claims and Surrenders
|
28,434
|
30,589
|
Other general expenses
|
11,030
|
11,382
|
Total benefits and expenses
|
56,331
|
58,231
|
|
|
|
Income (loss) before federal income tax
|
(974)
|
(2,748)
|
Federal income tax benefit
|
359
|
825
|
Net
income (loss)
|
(1,333)
|
(3,573)
|
|
|
|
Per share
data
|
|
|
Book value per share
|
$
3.91
|
4.76
|
Basic and diluted earnings (loss) per share of
Class A
common stock
|
(0.03)
|
(0.07)
|
|
|
|
Definition of Reported Segments
The Company operates in two business segments as detailed
below.
Life Insurance – The Life Insurance segment primarily issues
U.S. dollar-denominated ordinary whole life insurance and endowment
policies predominantly sold to non-U.S. residents, located
principally in Latin America and
the Pacific Rim. These products
are sold through independent marketing consultants. A new whole
life product was introduced in Florida in 2021.
Home Service Insurance – The Home Service Insurance segment
provides final expense life insurance and property insurance
policies marketed to middle- and lower-income households, and whole
life products with higher allowable face values, in Louisiana, Mississippi, and Arkansas. These products are sold through
independent agents and funeral homes.
Selected Segment
Financial Data
|
|
|
|
For the periods ended as of
|
Three months ended
March 31
|
(In thousands)
|
2022
|
2021
|
|
|
|
LIFE INSURANCE SEGMENT
|
|
|
Total assets
|
$
1,297,632
|
1,330,637
|
Operating items
|
|
|
Insurance premiums
|
26,931
|
27,063
|
Net
investment income
|
11,971
|
11,598
|
Investment related gains (losses)
|
(293)
|
(108)
|
Total revenues
|
39,697
|
39,466
|
|
|
|
Claims and Surrenders
|
21,458
|
23,270
|
Total benefits and expenses
|
38,667
|
39,572
|
|
|
|
Income (loss) before federal income tax
|
1,030
|
(106)
|
|
|
|
HOME SERVICE INSURANCE SEGMENT
|
|
|
Total assets
|
$
378,489
|
386,969
|
Operating items
|
|
|
Insurance premiums
|
12,433
|
11,969
|
Net
investment income
|
3,244
|
3,345
|
Investment related gains (losses)
|
(242)
|
223
|
Total revenues
|
15,435
|
15,539
|
|
|
|
Claims and Surrenders
|
6,976
|
7,319
|
Total benefits and expenses
|
16,675
|
16,297
|
|
|
|
Income (loss) before federal income tax
|
(1,240)
|
(758)
|
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SOURCE Citizens, Inc.