MODERN WOODMEN of AMERICA - About Us

Modern Woodmen of America, Rock Island, Ill., reached the $5 billion asset mark and a record premium income level of $508 million in a strong financial year, according to recently released results for the year ended Dec. 31, 2001.

The assets figure is a 7 percent increase over 2000, a gain of almost $340 million. The fraternal life insurer’s assets are primarily in high-quality, low-risk corporate and government bonds.

“Assets are a measure of strength and stability,” says Modern Woodmen President Clyde C. Schoeck. “This means our members across the country can count on Modern Woodmen to be there when they need us. Our life insurance and annuity products provide benefits they can rely on, and our fraternal programs bring an extra measure of service to our families and communities.”

Income increases over 2000
Modern Woodmen’s total income for 2001 was $853 million, a 20 percent increase from 2000. Total income primarily includes premium payments from members (certificate holders) and returns on investments.

Premium income from sales of life insurance and annuity products that help members provide for their families’ financial future reached the highest level in Modern Woodmen’s 119-year history. Premium income totaled $508 million, a 31 percent increase over the previous year. Fifty-nine percent of the premium income came from annuity sales, and 41 percent came from life insurance sales.

Life insurance issued reached $3.6 billion, and life insurance in force, the total amount of life insurance owned by members, increased 3.7 percent to $27.6 billion. Modern Woodmen of America has $2.2 billion of annuities assets under management.

Net investment income on Modern Woodmen’s assets passed $333 million, a 7.5 percent increase.

Surplus allows for growth
Net gain from operations after dividends totaled $38 million in 2001. Net gain from operations adds to surplus, enhancing Modern Woodmen of America’s financial strength and stability.

Total surplus and special reserves, which ensure Modern Woodmen’s ability to meet unforeseen contingencies and provide funds for future growth, reached $757 million. Surplus remained relatively stable, despite fluctuations in the equity market and development expenses for new product and service offerings.

Modern Woodmen launched two new wholly owned subsidiaries in 2001, MWA Financial Services, Inc., a broker/dealer, and MWABank. This expansion added 26 employees to Modern Woodmen’s staff.

As a broker-dealer, MWA Financial Services’ primary function is to distribute investment products that are registered with the Securities and Exchange Commission (SEC), including variable universal life insurance, variable annuities, mutual funds, stocks and bonds. Modern Woodmen’s registered representatives (those holding securities licenses) will sell these products as they become available. Mutual funds from 35 fund families are available at this time, and plans call for new Modern Woodmen variable universal life insurance and variable annuities to be available in late Spring 2002.

MWABank plans to provide checking, savings and loan services by the latter half of 2002.

Ratings and measures show ability to meet obligations
Life insurance and annuity certificate reserves, which are funds held to guarantee future benefits to members, increased 9.9 percent to $4 billion.

Modern Woodmen’s solvency ratio of 117.40 percent means that for every $100 of liabilities, Modern Woodmen has $117.40 of assets.

Two independent rating services verified Modern Woodmen’s financial strength in 2001. A.M. Best rates Modern Woodmen A+ (Superior), based on financial strength, operating performance and market profile. Fitch Ratings rates Modern Woodmen’s financial strength as AA (Very Strong), reflecting superior asset quality and strong risk-adjusted capital position.

Member benefits build quality of life
Dividend payments and excess interest paid to members on life insurance and annuity certificates totaled $89 million in 2001. Life insurance and annuity certificate benefits to members (including death benefits, annuity benefits and surrender benefits) totaled $297 million.

Fraternal expenditures in support of Modern Woodmen’s family-oriented fraternal benefits to members (including grief assistance, disaster relief funds, a telephone counseling service, college scholarships and more), social and community service programs by member chapters nationwide, and educational programs for school and youth groups totaled $18.6 million in 2001, an 11.6 percent increase over 2000. This includes $5.4 million for locally initiated fund-raising projects to meet needs in member communities nationwide. These projects were conducted by some of Modern Woodmen’s 2,185 adult camps and 730 youth service clubs across the country.