tomorrow. - life insurance, annuities, investments ......• group employee benefits • group...
TRANSCRIPT
TODAY. TOMORROW. TOGETHER.
Modern Woodmen of America
BOARD OF DIRECTORS
How did you learn to ride a bike? Maybe you tagged along with a sibling who showed you the ropes. Perhaps a parent or a grandparent ran alongside. Each day, you worked together until you gained confidence and were able to go where you wanted.
It’s like that with Modern Woodmen of America. We move forward by working together to help you, our members, move toward your goals.
On Jan. 5, 2018, this organization turned 135 years old. Modern Woodmen is here today and will be here tomorrow because we invest in our people, our products, and our processes to stay relevant for you and your family. As Modern Woodmen members, field representatives, fraternal volunteers and employees, we’ll continue to serve our communities … together.
This annual report shares a look at what we were able to accomplish together in 2017.
W. Kenny Massey / President and CEO
OUR MISSION To improve the quality of life for our members.
OUR VISION Modern Woodmen of America will grow nationwide through members helping members create a better tomorrow for themselves, their families and others.
OUR CREED There is a destiny that makes us brothers; None goes his way alone; All that we send into the lives of others Comes back into our own. - Edwin Markham circa 1939
From left:
Director Lori A. Newberg / Lenexa, Kansas
Director David B. Emrick / Davenport, Iowa
Director Robert C. Pollex / Perrysburg, Ohio
President and CEO W. Kenny Massey / LeClaire, Iowa
Director James E. Temperley / Bonita Springs, Florida
National Secretary Jerald J. Lyphout / East Moline, Illinois
Director Joseph A. Sztapka / Sioux Falls, South Dakota
Director William D. Keltner / Jackson, Tennessee
Director Darcy G. Callas / Moline, Illinois
Director Lester L. Bohnert East Moline, Illinois
appointed 2018
32017 Annual Report2 Today. Tomorrow. Together. / Modern Woodmen of America
2017 ANNUAL REPORT // President’s Message Board of Directors // 2017 ANNUAL REPORT
Natural disaster relief
Make An Impact
Matching Fund Program amplifies members’ impact
Chapter members participated in:Dollars and hands-on assistance when needed most
Volunteer, socialize and learn!
natural disaster-related fundraisers matched by Modern Woodmen
service projects to support disaster victims
When nature strikes, Modern Woodmen members strike back. Throughout 2017, members provided comfort, dollars and an extra pair of hands to those affected by hurricanes, wildfires, floods and other disasters. Members in Texas tied blankets for their neighbors. Members in Georgia collected medical supplies for kids with special needs. Members in Kentucky drove 22 hours to help feed displaced families. Chapter members participated in 23 natural disaster-related fundraisers matched by Modern Woodmen, 28 service projects to support disaster victims, and numerous individual volunteer efforts.
Volunteer, socialize and learn. Modern Woodmen chapters, Summit chapters and youth service clubs make it easy – and fun! Activities provide a wide variety of meaningful, hands-on experiences throughout the year. Get involved to make an impact in your own life and in your community. Ask your Modern Woodmen representative how you can get involved as a leader, serve on your local chapter board, or simply volunteer for an upcoming service project.
$43.7 million* support local fundraisers in 2017
Our members love making an impact in their communities – and we love supporting the causes that are important to them.
Through the Matching Fund Program, Modern Woodmen’s home office matches dollars raised through qualifying fundraisers, up to $2,500 annually for each chapter and up to $500 annually for each youth service club.
The result? Chapters, Summit chapters and youth service clubs make an even more meaningful impact on community needs. Now that’s fraternalism.
MEMBER ACTIVITIESSocial, educational and volunteer events in 2017
2328
*Includes total dollars raised by member chapter and youth clubs partnering with community groups.
to community projects and individuals in need.
MATCHING FUND PROGRAM
3,881 fundraising events
$43.7 million* contributed
Courses on financial literacy, exercise & nutrition, & more reached
YOUTH EDUCATIONAL PROGRAMS
796,295 children
831 active clubs nationwide
YOUTH SERVICE CLUBS
83,663 participants
287 active
chapters
SUMMIT CHAPTERS
age 55+ participated48,703 members
2,528 active
chapters
CHAPTERS669,026 attendees
at social, educational & volunteer events for member families
SERVICE PROJECTS/VOLUNTEER ACTIVITIES
10,228 hands-on events
534,423 volunteer hours
$2.27 million reimbursed for projects in members’ communities
52017 Annual ReportToday. Tomorrow. Together. / Modern Woodmen of America4
2017 ANNUAL REPORT // Member Activities
End-of-life decisions can be difficult, but documenting and sharing your plans can be simple.
Final Wishes is an online tool that gives members free access to a wealth of information and resources.
• Documents for end-of-life financial and funeral planning.• Information on choosing an executor and the executor’s role.• Advice on talking about final wishes and sharing plans with others.• Tools to help loved ones make notifications and financial decisions after your death.
To access Final Wishes, go to “Member Login” at modernwoodmen.org and select “Benefits.”
It’s never been easier to save money on prescriptions. Upgraded in 2017, Modern Woodmen’s ScriptSave WellRx member benefit offers a mobile app to make your prescriptions more affordable and easier to manage.
ScriptSave WellRx is accepted at more than 62,000 pharmacies nationwide. Just show your savings card to receive discounts for the whole family, including pets. You’ll also find discounts on vision and hearing care, dia-betic supplies, lab testing, gym memberships and much more.
To register, go to “Member Login” at modernwoodmen.org and select “Benefits.” Then download the free app from the App Store or Google Play and start saving!
Life insurance products • Whole life insurance • Universal life insurance • Term life insurance
Annuity products • Fixed annuities • Immediate annuities • Variable annuities1
Investment products1
• Mutual funds • Retirement plans – Traditional IRA, Roth IRA, SEP-IRA, SIMPLE IRA, 401(k), 403(b) TSA • College savings plans – 529 college savings plans,
Coverdell education savings accounts, UGMA/UTMA accounts
• Brokerage services – stocks, bonds, ETFs, UITs • Investment advisory services – Adviser-managed and
third-party managed accounts, financial planning services
Insurance products2
• Dental and vision insurance • Disability income insurance • Group employee benefits • Group voluntary benefits • Impaired risk life insurance • International life and health insurance • Long-term care insurance • Health insurance • Medicare supplement insurance • Medicare Advantage and prescription drug plans
Banking products3
• Checking accounts • Savings accounts • Certificates of deposit • First mortgage home loans (new purchases and refinancing included) • Home equity loans • Visa® credit cards and gift cards • Health savings accounts (HSAs)
1 Securities offered through MWA Financial Services, Inc., a wholly owned subsidiary of Modern Woodmen of America. Member: FINRA, SIPC. Investment Advisory Services offered through MWA Financial Services, Inc., a Registered Investment Adviser.
Individual agents may not be licensed to sell all products. 2 Not issued by Modern Woodmen of America. Brokered insurance products
available through MWAGIA, Inc., a Modern Woodmen subsidiary. Product availability varies by state.
3 Modern Woodmen Bank is a marketing name for MWABank, a wholly owned subsidiary of Modern Woodmen of America. Annuities, insurance, retirement plans, mutual funds and other securities are not insured by the FDIC or any other federal government agency, are not obligations or deposits for MWABank, and are not guaranteed by MWABank. These products involve risk, including the possible loss of principal invested. MWABank is an Equal Housing Lender.
MEMBER BENEFITSFor all life stages
Final Wishes benefit
ScriptSave WellRx
Children and adolescents
Single adults
Families
50 and older
Member benefits for all life stages – learn more at modernwoodmen.org.
ProductsModern Woodmen offers financial products to help you meet a wide range of needs.
NEWBORN BENEFIT$10,000 of life insurance
issued for infants in poor health
ORPHAN BENEFIT$61,990 in financial support
for 19 orphans
100 PERCENT MODERN WOODMEN FAMILY BENEFIT
14,071 childrenreceived books for birthdays
MAKE AN IMPACT SCHOLARSHIPS$456,175 awardedto 174 member students
ACCELERATED BENEFITS$20,111 in premiums
& interest paidfor terminally ill members
FINAL WISHES1,416 members
accessed website and planned their final wishes (see Page 6)
MEMBER DISCOUNTSExclusive savingson health screenings, gym memberships, park passes, event tickets and more
FRATERNAL AID FUND$221,334 total in premiums paid
for members who were victims of medical, fire or natural disasters – $114,515 specifically
for victims of natural disasters
72017 Annual Report6 Today. Tomorrow. Together. / Modern Woodmen of America
2017 ANNUAL REPORT // Member Benefits
- National membership: 760,000 members
- Part of: 2,528 adult chapters, 287 Summit chapters (for members age 55+), 831 youth service clubs
- Total fraternal expenditures: $20.6 million
Our fraternal expenditures fund
family-oriented member benefits
and programs, such as:
• Disaster-relief assistance.
• College scholarships.
• Social, educational and
volunteer service events.
• Educational programs for
schools and youth groups
… and more.
- Fraternal Aid Fund contributions for natural disasters: $114,515
– W. Kenny Massey, Modern Woodmen of America president and CEO
DISASTER RELIEFThrough the Fraternal Aid Fund, Modern Woodmen covers the cost of premiums for members affected by natural disasters like Hurricanes Harvey and Irma. Members also supported disaster relief efforts with fundraising and service events.
Fraternal expenditures for the year reflect strong usage of benefits and
programs by members.
Life insurance in force shows consistent growth and increased
protection for members.
Modern Woodmen’s increasing asset base is a strength.
AT MODERN WOODMEN, MEMBERS ALWAYS COME FIRST. Here’s what we accomplished together in 2017.
Bonds
Certificate loans, cash and other
Mortgage loans and real estate
Common stocks
FINANCIAL SUMMARY FRATERNAL SUMMARY
STRONG FOR MEMBERS, THEIR FAMILIES AND THEIR COMMUNITIES
Keeping promises for 135 years
2017 FINANCIAL HIGHLIGHTS
- Total life insurance owned by members: $40 billion
- Total assets: $16.2 billion
- Life insurance, annuity and other certificate reserves: $12.6 billion
- Payments and benefits made to members (includes death benefits, annuity
payments and surrender benefits): $1.03 billion
- Dividends paid on life insurance and annuity certificates: $7.4 million
- Surplus and special reserves: $1.82 billion
- Solvency ratio: 112.69 percent For every $100 of liabilities (promises
made to members), Modern Woodmen
has $112.69 of assets. The industry
average solvency ratio is 106.19
percent. (Source: Standard
Analytical Service, Inc., 2017)
All six members of the Breidenbach family are protected with Modern Woodmen life insurance. “By insuring not only ourselves but also our children, we’re actually planning for the future,” says Tim. “We feel like we can live our life and not have to worry.”
Travis Camp drove 22 hours to help his friend in the aftermath of Hurricane Harvey. “Being down there made so much of a difference in those people’s lives at that moment,” says Travis. He and his father gave bottled water to electrical workers restoring power, and they helped feed displaced families.
“We stand strong for our members and their families. Through careful planning now, we’re making sure we’re there for them when they need it.”
Even in retirement, Larry and Joanne Terrill know the value of protection. “Neither one of us has thought of giving up our life insurance,” says Joanne. “Our kids will have money to do what needs to be done when we pass away – and we can still leave something for them.”
Member story
Member storyMember story
Fraternal Expenditures
Quality Investments
Growth in Assets Life Insurance in ForceDollars in millions
As of 12/31/2017, approximately 99.6 percent of bonds were of high or medium quality.
Dollars in billions Dollars in billions
83%
6%
4%
7%
2017 Annual Report 98 Today. Tomorrow. Together. / Modern Woodmen of America
2017 ANNUAL REPORT // Financial Message Financial Highlights // 2017 ANNUAL REPORT
FINANCIAL STATEMENTSModern Woodmen of America – Year end Dec. 31, 2017 (dollars in thousands) unaudited
2017 2016
Operating activities
Premium and annuity considerations $1,001,543 $1,042,874
Net investment income 565,136 566,911
Misc income 8,031 7,901
Total cash provided by operations 1,574,710 1,617,686
Benefit- and loss-related payments 997,902 865,939
Commissions and other expenses paid 208,073 223,095
Net transfers to separate accounts 94,117 48,524
Dividends paid 7,380 9,028
Total cash used in operations 1,307,472 1,146,586
Net cash provided by operating activities 267,238 471,100
Investing activities
Proceeds from investments sold:
Bonds 1,304,276 1,213,997
Stocks 218,285 102,667
Mortgage loans 49,297 61,950
Real estate 0 50
Other invested assets 80,912 47,440
Miscellaneous proceeds 84,170 71,145
Total investment proceeds 1,736,940 1,497,249
Cash applied, cost of investments acquired:
Bonds 1,638,508 1,682,510
Stocks 154,778 91,183
Mortgage loans 106,910 95,758
Real estate 763 403
Other invested assets 69,892 66,647
Miscellaneous applications 9,782 0
Total investment applications 1,980,633 1,936,501
Net decrease in certificateholders’ loans (7,278) (7,084)
Net cash used in investing activities (236,415) (432,168)
Other cash provided by financing activities and other miscellaneous sources 83,912 16,263
Increase in cash and short-term investments 114,735 55,195
Cash and short-term investments at beginning of year 181,581 126,386
Cash and short-term investments at end of year $296,316 $181,581
2017 2016
Assets
Bonds $12,789,706 $12,422,902
Stocks 873,635 788,086
Mortgage loans 581,122 523,244
Real estate 23,111 24,407
Cash 296,316 181,581
Certificateholders’ loans 157,102 164,478
Securities lending reinvested collateral 320,360 394,530
Other invested assets 375,821 332,218
Total cash and invested assets 15,417,173 14,831,446
Investment income due and accrued 130,574 128,614
Electronic data processing equipment 2,951 2,178
Other assets 2,402 2,795
Separate account assets 613,164 436,268
Total admitted assets $16,166,264 $15,401,301
2017 2016
Income
Premiums:
Life and annuity $999,607 $1,041,105
Other 2,036 1,965
Investment income, net of expenses 568,378 570,158
Amortization of interest maintenance reserve 16,186 12,566
Other income 8,031 7,901
Total income 1,594,238 1,633,695
Benefits and expenses
Benefits:
Life and annuity 1,016,383 860,789
Other 12,079 10,327
Increase in aggregate reserves 231,496 473,037
Employees’ and fieldworkers’ benefit plans 6,150 5,572
Commissions 65,461 62,979
General insurance expenses 116,574 134,216
Insurance, taxes, licenses and fees 7,129 7,013
Fraternal, charitable and benevolent expenses 20,610 21,673
Net transfers to separate accounts 87,492 45,585
Total benefits and expenses 1,563,374 1,621,191
Net gain from operations before dividends/net realized capital gains 30,864 12,504
Dividends to certificateholders 7,380 7,228
Net gain from operations before net realized capital gains 23,484 5,276
Net realized capital gains 65,409 22,969
Net income $88,893 $28,245
2017 2016
Appropriated
Balance at beginning of year $278,233 $278,776
Transfer from unassigned funds 1,038 (543)
Balance at end of year 279,271 278,233
Unassigned
Balance at beginning of year 1,354,549 1,312,475
Net income 88,893 28,245
Net unrealized capital gains 136,578 33,263
Change in asset valuation reserve (26,177) (10,408)
Change in nonadmitted assets (2,980) 4,412
Transfer to appropriated surplus (1,038) 543
Other changes, net (8,808) (13,981)
Balance at end of year 1,541,017 1,354,549
Total surplus $1,820,288 $1,632,782
Statements of Cash Flows
Balance Sheets
Statements of Operations
Statements of Surplus
2017 2016
Liabilities and surplus
Aggregate reserves:
Life and annuity $12,557,261 $12,297,018
Accident and health 2,118 2,275
Certificate and contract claims 45,784 32,952
Other certificateholders’ funds 3,312 3,373
Dividends payable to certificateholders 7,300 7,300
Accrued commissions, general expenses and taxes 15,952 15,768
Payable for securities lending 320,360 394,530
Other liabilities 390,854 224,355
Liability for benefits for employees 59,243 56,066
Interest maintenance reserve 54,457 48,593
Asset valuation reserve 276,171 249,994
Separate account liabilities 613,164 436,268
Total liabilities 14,345,976 13,768,519
Appropriated surplus 279,271 278,233
Unappropriated surplus 1,541,017 1,354,549
Total surplus 1,820,288 1,632,782
Total liabilities and surplus $16,166,264 $15,401,301
112017 Annual Report10 Today. Tomorrow. Together. / Modern Woodmen of America
2017 ANNUAL REPORT // Financial Statements