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Kansas City Life Insurance Company Reports Operating Results (10-Q)

July 30, 2010 | About:
10qk

10qk

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Kansas City Life Insurance Company (KCLI) filed Quarterly Report for the period ended 2010-06-30.

Kansas City Life Insurance Company has a market cap of $367.3 million; its shares were traded at around $31.95 with and P/S ratio of 0.9. The dividend yield of Kansas City Life Insurance Company stocks is 3.3%.KCLI is in the portfolios of Chuck Royce of Royce& Associates.

Highlight of Business Operations:

The Company s net income increased $2.0 million or 25% in the second quarter of 2010, versus the same quarter in the prior year, to a total of $10.1 million. Net income per share increased $0.18 or 26% and totaled $0.88 per share versus $0.70 per share in the second quarter of 2009. Net income for the first six months of 2010 was $11.0 million, an increase of $7.5 million or 215% compared to last year. Net income per share increased $0.66 or 220% and was $0.96 per share.

A significant factor in the increase in net income for the second quarter of 2010 was a decline in realized investment losses. The Company experienced a $0.2 million net realized investment gain in the second quarter of 2010 compared to a $1.4 million net realized investment loss in the second quarter of 2009. In addition, premiums increased, amortization of deferred acquisition costs and value of business acquired decreased, and operating expenses decreased. Partially offsetting these favorable items, policyholder benefits increased and net investment income decreased.

The increase in net income for the six months versus the same period one year earlier largely resulted from a decline in realized investment losses. The Company experienced a $0.1 million net realized investment loss in 2010 compared to a $6.1 million net realized investment loss in 2009. Other factors contributing to the increase in net income were higher premiums, lower operating expenses and a decrease in amortization of deferred acquisition costs and value of business acquired. Partially offsetting these were increases in policyholder benefits and reinsurance ceded on premiums and a decrease in net investment income.

Consolidated total premiums increased 12% in the second quarter of 2010 versus the same period in the prior year, as total new premiums increased 59% and total renewal premiums increased 1%. Total new premiums increased $4.6 million, largely due to a $2.9 million or 178% increase in immediate annuities. The increase in immediate annuity sales represents continued demand for fixed-rate products by consumers. New group accident and health premiums increased $0.8 million or 35%, reflecting higher disability and dental premiums. New individual life premiums increased $0.7 million or 20%, as new premiums in the Old American segment increased 35%. The increase in new premiums from the Old American segment primarily reflects expanded distribution and greater field force productivity. The increase in renewal premiums was largely due to a $0.9 million increase in group accident and health premiums, largely in the dental and disability product lines. These improvements were partially offset by a $0.3 million decline in group life premiums.

Total premiums for the six months increased 7% compared to one year ago. Total new premiums increased 41%, while total renewal premiums decreased 1%. Total new premiums increased $7.4 million, as new immediate annuity premiums increased $3.9 million or 66% and new group life premiums increased $0.4 million or 45%. New group accident and health premiums increased $1.8 million or 37%, largely reflecting increases in disability and dental premiums. New individual life premiums increased $1.3 million or 20%, reflecting a 35% increase in new individual life premiums in the Old American segment. The decrease in renewal premiums was primarily due to a 16% decrease in group life renewal premiums.

Total new deposits decreased $17.1 million or 46% in the second quarter of 2010 compared with the second quarter of 2009. New universal life insurance deposits increased $0.9 million or 44% and new variable annuity deposits increased $0.7 million or 14%, while new variable universal life deposits declined $0.1 million or 32% and new fixed deferred annuity deposits decreased $18.6 million or 62%. Sales of new fixed deferred annuity deposits in the second quarter of 2010 were lower in comparison to higher sales in the prior year. During the second quarter of 2009, the Company highlighted marketing of this product to take advantage of an opportunity that was identified in the marketplace. The improvements in new universal life and variable annuity deposits during 2010 can be attributed to changes in consumer preferences during the recent periods of volatility in the equity markets and improvements in the economy. Total renewal deposits increased $4.9 million or 16% in the second quarter of 2010 versus last year. Fixed deferred annuity renewal deposits increased $4.6 million or 96%, and renewal variable annuity deposits increased $1.1 million or 57%. The increase in renewal fixed deferred annuity deposits can largely be attributed to the higher sales experienced in 2009.

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10qk
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