Fidelity & Guaranty Life Posts 1Q Fiscal 2015 Results
February 10, 2015 by Proquest LLC
Fidelity & Guaranty Life reported net income of $14.1 million or $0.24 per diluted common share for the first quarter of fiscal 2015 ended on December 31, 2014.
According to a release from the Company, it reported adjusted operating income of $27.1 million, or $0.46 per diluted share, in the fiscal first quarter, compared to adjusted operating income of $25.0 million or $0.51 per diluted share, in the prior year period.
“The Company has once again delivered strong financial performance in the first fiscal quarter. Sales of our core products, fixed indexed annuities and indexed universal life, achieved significant period over period growth rates,” said Lee Launer, Chief Executive Officer of FGL. “We continue to see growth opportunities as we expand our product suite and increase fixed indexed annuity sales through our independent marketing organizations.”
“I’m pleased that 2015 has begun strongly and that the top and bottom lines are meeting our expectations,” said Phillip J. Gass, Chairman of FGL. “The results reflect steady progression of adjusted operating income to $27 million and our achieving a strong average earned yield, despite a tough interest rate environment. We continue to demonstrate our ability to successfully scale the business significantly, while prudently managing the investment portfolio. Furthermore, our strong balance sheet, and available deployable capital, position us well to benefit from ongoing market volatility.”
Indexed universal life sales in the quarter were $6.7 million, an increase of 34 percent compared to $5.0 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 $742.0 million at an average yield of 5.21 percent. The average earned yield on the total portfolio in the quarter was 4.83 percent compared to 4.64 percent for the same period last year. Net investment income was $208.4 million for the first quarter 2015, an increase of 14 percent compared to $183.4 million for the same period last year. Growth in net investment income is due to the combination of higher overall portfolio yields from repositioning activities completed last year, and growth in average assets under management of $1.5 billion from strong new business sales and stable retention trends. The average NAIC rating for the investment portfolio was approximately 1.5 in both periods.
FGL reported net income of $14.1 million for the first quarter 2015 compared to $42.7 million for the first quarter 2014. Adjusted operating income in the current period was $27.1 million compared to $25.0 million in the same period last year. The current period results included $3 million of favorable reserve adjustments, most of which was mortality related within the immediate annuity product line. This favorable impact was offset by $2 million expense related to legacy compensation plans and $1 million of project related expenses. Results in the prior period included $10 million of favorable DAC unlocking benefits partially offset by a $4 million of expense related to legacy compensation plans.
Fidelity & Guaranty Life, an insurance holding company, helps middle-income Americans prepare for retirement.
