Fidelity & Guaranty Life Posts 3rd Quarter Fiscal 2014 Results
August 12, 2014 by Proquest LLC
Fidelity & Guaranty Life reported net income of $56.5 million or $0.97 per diluted common share for the third quarter of fiscal 2014 ended onJune 30.
“The Company delivered strong performance for the third quarter on several fronts. Sales of our core products; fixed indexed annuity and indexed universal life product lines continue to grow at a prudent pace. We are tracking well to the strategy we laid out at the time of the IPO,” said Lee Launer, Chief Executive Officer of FGL. “Additionally, the investment portfolio is performing well with both average yields and net investment spreads up meaningfully over last year from our repositioning efforts.”
“We have realized meaningful increases in adjusted operating income, net investment spread and book value through increased sales of fixed indexed annuities and the repositioning of our investment portfolio,” said Phil Gass, Chairman of FGL. “Our conservatively managed investment portfolio and substantial deployable capital position enable us to capitalize on potential market volatility.”
Third Quarter Fiscal 2014 Highlights:
-Sales of fixed indexed annuity (“FIA”) were $378.6 million in the current period, a 44 percent increase over the same period last year and a 19 percent increase sequentially.
-The top 10 distribution partners grew FIA sales 41 percent over the prior year and 14 percent sequentially.
-Indexed universal life sales increased 37 percent over the prior year.
-Net investment spread for the FIA product line was 2.90 percent for the third quarter, an increase of 41 basis points compared to the same period last year.
-After-tax adjusted operating income (“AOI”) was $35.2 million; an increase of 151 percent compared to the third quarter of last year.
-GAAP book value atJune 30, was $1.7 billion, up 31 percent year over year. GAAP book value excluding accumulated other comprehensive income (“AOCI”) was$1.3 billion, an increase of 18 percent year over year.
According to a release from the Company, sales of its core, fixed indexed annuity product were $378.6 million in the current period, an increase of 44 percent over the prior year and a 19 percent increase sequentially. On a fiscal year-to-date basis, FIA sales were $997.5 million; a two-fold increase over the same period last year. Total annuity sales were $391.7 million for the third quarter, an increase of 45 percent compared to $270.5 million in the third quarter of 2013.
Indexed universal life sales in the quarter were$5.9 million, an increase of 37 percent compared to$4.3 million last year. The current period results reflect the Company’s ongoing efforts to increase sales through existing product enhancements and new products offered through its network of independent marketing organizations.
Asset purchases during the quarter were$1.6 billion at an average yield of 5.29 percent, or 67 basis points above the portfolio yield. Purchases included the reinvestment of approximately$1.0 billion related to the tax planning strategy announced in the second fiscal quarter. The average earned yield on the portfolio in the quarter was 4.62 percent as compared to 4.36 percent for the same period last year. Net investment income on a reported basis was$191.2 million for the third quarter 2014, an increase of 3.6 percent compared to$184.6 million reported in the same period last year. Included in the prior year net investment income was$14.9 million related to income of distributed subsidiaries. Adjusted for this impact, net investment income is up 12.7 percent period over period. The average NAIC rating for the investment portfolio was 1.4 at the end of the period.
FGL reported net income of$56.5 million for the third quarter 2014 as compared to$53.2 million in the third quarter 2013. Adjusted operating income in the current period was$35.2 million as compared to$14.0 million in the same period last year.
Fidelity & Guaranty Life, an insurance holding company, helps middle-income Americans prepare for retirement.
More information and complete details: www.fglife.com
