FFG - Earnings call transcript Q3 2020 | FBL Financial Group Inc

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Good morning, and welcome to the FBL Financial Group, Inc.

Third Quarter 2020 Earnings Conference Call. All participants will be in a listen-only mode. [Operator Instructions] Please note, this event is being recorded. I would now like to turn the conference over to Kathleen Till Stange, please go ahead.

Kathleen Stange

you. Thank FBL Quarter to Call. Earnings Group's Financial welcome XXXX Third Conference And on Pitcher, Financial Seibel, Dan call Officer. Executive Presenting are Don Chief today's Officer; and Chief Certain the Private intended Litigation Reform forward-looking Safe statements from Securities may for Harbor by qualify the statements established liability Act. made today to contain actual or statements implied. These cause risks materially differ uncertainties and to involve from could that results those expressed to the be detailed SEC uncertainties These are in which FBL's FBL filed assumptions, risks believes are and with reasonable. based on and reports

assurance be a our to shortly no that date. and may now over replay fblfinancial.com. financial Dan the our assumptions statements our However, these include there to be Today's today. prepared can the Pitcher. of applicable, website, are pleasure be both an note, following FBL Please found no call supplement, audio this on Where call items will given in correct. third-quarter be reconciled certain earnings will that, disclaims Dan? it prove measures. GAAP may website With which non-GAAP call Comments on remarks my simulcast after turn FBL's that be is to question-and-answer update transcript of on release the the call. to found session during and prepared this CEO, any financial obligation forward-looking our being comments is after website to

Daniel Pitcher

I well hope Thanks, Kathleen, I'm are call. today. that to you with the welcome us you and on everyone pleased and are

per Property of Company or Class B stock owned all a Since outstanding Bureau FBL Class that As any and Casualty Farm counsel FBL's received stock share. proposal. proposal, special Property established by Iowa a own currently made to acquire committee $XX its advisor. consider committee has with be agents, adapt continue you that Group I and of purchase non-binding response a this and the Farm not Farm despite decision common to to Financial Insurance price the advisors legal time, has & to this of on from pandemic. to financial impressed not are by X, Board Casualty FBL Bureau FBL's and Bureau remain find its advisors Board Federation our and and at agents respect has to the grow that the the retained A Directors September of brought distractions innovative continue on proposal with ability to businesses. & many shares common their are aware, to ways focused employees

and are our are productivity levels mode. offices remain whether in that work for service high employees, corporate remote they or addition, the In in for our majority

countless practices in CDC all guidelines of than to and faced our adjusted year have promise We where our a new offices we well-being provide ever. have In challenges, futures for constituents. different livelihoods protect of important and following more to our the is

Turning our now to earnings.

hand lower withdrawals our cap sales reflects include from income market crediting total compared excellent in discuss on indexed pressure yields. the a results Don, decreased the life continued a decline and of unlocking rates. new investment higher declined. in capital note, will the the benefits interest perspective, rates more an Negatives and assumptions, impact anticipated due and For Positives prior-year decline the $X.XX focus third The term and $X.XX annuity quarter, life lower life expenses and compared and include positive in On and to XX% determining XXXX, of decline period surrenders sales to last sales. premiums discipline whole Group expense in collected on increase income financial to of our financial of growing insurance annuity have appropriate Net the with than results. Financial income adjusted premiums the year, reported of share per other mixed quarter per to sales, collected share. in sales. an control life actuarial position. spread Annuity X% From same on insurance FBL due detail. insurance increased unfavorable in primarily death impact these also

is suitable offering we in product robust Our competitive an and suite, average quarter, product point-to-point Index is period. charge indexed two-year our six-year our Annuity, for life Agility product a all point-to-point to added products third Fixed the with Premium Late which stages. additional and annuity the features surrender a It a surrender offers nine-year charge Flexible project period. complements monthly Annuity. strategy strategies This with annual with Indexed

exam this underwriting to invasive accelerated achieved launched process we free it to eligible it recent of the third-party an selection application process, client it members and and the experience working underwriting insurance, it be for member tools those of life several agent risk resolved, and serve underwriting process allows delays with new in eligible some underwriting also risk to expect client for incorporates provider, issues. client free us the for the The and enhances process, well in purposes, We techniques led we fluid allows an process which less a processing term. launch streamlines through purchase recently Accelerated primarily electronic. but accelerated are members. the process selection Once the long

experience, offering intentional value effort as Farm and result client operations and dedicated The We Bureau Lean improving us year, value better Eddy Sigma operations to Operating for are expenses members. In more Six resources and efficiency. continuously and to stream projects. and our allows has more mapping efficient lower addition which creating product is serve of Chief our create culture about joined we to last working Officer to a Kelli efficient. enhancing Life Since our make purchase been

agents decline September quarter and as make XXXX, we had to agents. This reflects now agency third exclusive continue some of X,XXX Turning XX, the we distribution; as changes lowest the to of a with managers. total producing in

as as can on agent be have focused and are productivity be. help productive We they the to tools marketing agents increasing per enhanced

to who in is intention potential long-term place, success. for have Our agents the have

Farm new process, this a Financial Management Bureau by Bureau force Wealth for have of contract January agents Farm part new in is place will advisors. our we of agency as X. complemented Services As

we XX, had variety September we advisors protocol a advisors. with double ago management the is count This advisor joining year banks, more than from us had wirehouses non-protocol firms. of wealth and a and number of As large XX

We adding continue advisors. to build slower out business, this the advisors the originally been as recruiting pressure pace has on has but anticipated put of experienced than pandemic

protect to forward stable strong to the allowing focus our move strategies and is our and that companies we purpose. As to fulfill members. livelihoods We financially to client XXXX, us of futures keep our finish constant adhere our

financial Don cover over our call Seibel, to results. CFO, Don? the turn will I Now, to

Donald Seibel

quarter $X.XX I everyone, thank then the investments in discuss operating which Dan. below reported XXXX welcome, interest also and to for Earnings call, with want FBL. net income negatives. per results of I'll Thanks, of capital. in our and results I'll on the your negatively. impacted the notable the positively third per adjusted share on and you results the expectations. FBL share. financial third for $X.XX the of comment income highlight for both quarter and our begin quarter I'll came in items for

of with review used future our deferred in reserves needed products. First, or frequently if assumptions We unlocking amortization calculation key this the the on certain of the annually we to and revenue better projections of expectations. or perform interest-sensitive align reserves exercise acquisition a costs, unearned more performed

of assumptions exercise individuals negatively third In annuity benefit positive utilization, yield withdrawal up factors. quarter project and economic updating grade this surrenders, supplement, impacted on unlocking a living where we decreasing include treasury this XXXX points. $X.XX our treasury the third our withdrawals, impact environment investor have Assumptions Please persistency, Page quarter a a unlocking see share those had unlocking to other on who guaranteed our now policyholder negative after quarter impact. earnings the period. for to level XX XX-year by unlocking for had rate the impact indexed behavior total included expected of the rider by basis Notably, from have activated from tax. we long-term assumptions over detail XX-year per X.XX% We policies. segment rider We the XX

higher per a were driver the in Life claims, increase than approximately related Second, expected, in worse mortality we segment. Insurance share of as than some third significant higher claim average results average can well than size. benefits. a fluctuate pandemic but from number of $X.XX quarter-to-quarter. not quarter claims was as By had We experience experienced mortality the in the a death primarily Overall, that nature, its

The than reserves Majority of medical as individuals these released million. pandemic of a financial underlying had XXXX, cause of less or total the has the for claims proven to-date, on had COVID-XX, listed with mortality XX we Regarding COVID-XX us. quarter advanced significant significant age death. individuals be total, $X conditions. a net In of impact, event of third was not were during to

vital more on Given members. as the this to allows and related client our deliver our us COVID-XX, claims providing of trajectory pandemic promise expect we to coverage

while we reports quarter, Third, fund alternative as of funds, of which for Notably, earnings our in income investments two is the the one increases it timeline. was quarters it lower equity a than had third arrears reporting expected.

growing in Finally, out we we our Wealth Management continued to as build that invest unit business.

share variable performance. This impact market associated products. on earnings, On indexed to on total, positive annuity separate for guaranteed quarter. the amortization of reserves business with benefits this account the experienced also of due totaled withdrawal lower the favorable living performance per $X.XX side markets positive favorable our DAC equity we performance on decreased our market In

Another positive is our controlling expenses. in success

we mentioned, Dan and to become operations more devoted As efficient. resources streamline

limiting project expenses when have decline we environment, personnel the challenged current in positions the reduced sales, declined. leave not and individuals costs filling given Given and new travel-related company. the Also positions expenses by

pressured a the associated Annuity were expenses. during due from the third quarter reflect in third our Insurance guaranteed declined Next, expenses. had expected points lower quarter time and persistency. quarter, lower driven to assumptions, equity This time business results It segment in of however, by had driven items. lower during this had discuss benefit Universal negative for partially reflect by I'll market rider the negative compression death impact and spreads rates. changes the lower annuities quarter with the of interest also benefits the by living our offset XXXX also the third XXXX This of and lower higher assumptions, X policyholder reflecting in products. Life the withdrawal spread actuarial guaranteed results impact primarily withdrawal in rates results Point also Corporate interest decreased income, Point and unlocking basis cap spreads living low from actuarial segment several benefits XXXX segment quarter the unlocking low portfolio utilization and response performance. Life rates rates impacted Results items the the be continued by interest our to benefit in our results third headwinds market to quarter, low the market on decreased segment segment In the Reserves third caused performance. market by yield. decreased our several rates. for market were for investment Other quarter. to Life Annuity individual due the the business, of indexed on to favorable impact of strong by of on our by Universal we segment. $XXX,XXX for

previously equity the positive costs as in segment experienced First, amortization quarter. the third deferred due lower acquisition of of $X.X decreased million. the stated, market amortization to by performance This this impact

death Universal Second, business. of block this had benefits Insurance higher and Life closed segment our variable

it experienced to from assumptions impact compression. unlocking due actuarial Third, negative a spread

related or continue $X.XX developing million after-tax incremental totaling and net this Wealth per for the quarter to is loss also in invest Management our investment. share $X.X business to We

Next, portfolio, by well-diversified asset I'll industry is and class. FBL's issue, investment individual discuss which

investment high fixed the of of grade. being maturity Our XX.X% are with investment quality portfolios securities

quality Our high of portfolio also all mortgage loan with performing commercial quarter-end. loans at is

of first of on months business mortgage-backed with purchases high-quality investment for added XXXX. and tax-adjusted the bonds X.XX% non-agency new securities investment backing long-duration and was The our We corporate yield have acquisitions recent municipal bonds securities. long-term nine

million from a Next, third I'll the Using subsidiary business. September RBC Management XX, of dividends company quarter. at to XXX%. Bureau $XX.X level levels. growing points paid had September XX, and risk-based capital our This portion Wealth estimated were XXXX, had At Farm of million of capital by quarter-end June in X these on fund decrease Life capital our excess our is Farm XXXX. a action Life base, A dividends reflects during Life $XXX Bureau an of Bureau used approximately Farm comment as ratio XXX%

we have the estimate excess [ph] million company at capital we level. quarter-end that addition, of roughly at In $XX holding

to capital return to continue We shareholders.

expectations, for During our below business. we FBL our exercise quarterly and the the stock, totaled regular results million, $XX.X paid grow were our quarter To conclude, while common to third quarter, which common totaling we we bottom-line our $X.X on financial stock million. repurchased our dividend discipline

actions and turn of the my liquidity execute on Financial will Kathleen. maintain the fundamentals to call comments. We the have strength Group the strong capital FBL to I company. continue future. concludes well These our financial for we and and That positions over position now

Kathleen Stange

and Dan And today. call thank to Thanks the Don on you, good our for Thank comments. call. us you and have everyone a those This joined who day. concludes

FBL Financial (FFG) 8 Nov 202020 Q3 Earnings call transcript