Modern Woodmen reports strong year

Modern Woodmen of America reports a strong year financially and fraternally according to recently released results for the year ended Dec. 31, 2002.

“Modern Woodmen is financially strong and stable. This allows us to focus on meeting the needs of our nationwide membership, their families and communities,” said Clyde Schoeck, president of the Rock Island-based fraternal life insurance and financial services organization. “We’re keeping our commitment to members through sound financial management, additional financial products and services for members, relevant member (fraternal) benefits and strong community service options,” Schoeck continued.

$1 billion milestone in total income, record premium income
Modern Woodmen’s total income for 2002 exceeded the $1 billion milestone. Total income was $1.1 billion, a 26.5 percent increase from 2001. Total income includes premium payments from members (certificate holders) and return on investments.

Premium income from the sale of life insurance and annuity products that help members provide for their families’ financial future reached the highest level in Modern Woodmen’s 120-year history. Premium income reached $705 million, a 39 percent increase over the previous year. Seventy percent of the premium income came from annuity sales; 30 percent came from life insurance sales.

Net investment income on Modern Woodmen’s assets totaled $363 million, a 9 percent increase over 2001.

Life insurance in force, the total amount of life insurance owned by members, increased 3.3 percent to $28.5 billion. Modern Woodmen of America has $ 2.7 billion of annuity assets under management, an increase of 21 percent.

Assets show strong growth
Modern Woodmen assets of nearly $5.6 billion increased 9 percent over 2001, a gain of almost $470 million. Assets are primarily in high-quality, low-risk corporate and government bonds.

Surplus allows for growth
Net gain from operations after dividends reached almost $39 million in 2002. Net gain from operations adds to surplus, enhancing Modern Woodmen’s strength and stability.

Total surplus and special reserves remained stable at $770 million. Surplus and special reserves ensure Modern Woodmen’s ability to meet unforeseen contingencies and provides funds for future growth.

Modern Woodmen’s wholly owned, full service broker-dealer completed its first year of operation in 2002. Through MWA Financial Services, Inc.,* Modern Woodmen offers variable universal life insurance, variable annuities, mutual funds and securities.

MWABank, a wholly owned subsidiary of Modern Woodmen, was formed in 2002, and opened in late January 2003. An FDIC-insured bank, MWABank is targeted to Modern Woodmen members and their families nationwide, to help them meet their banking needs simply and affordably. Services include checking and savings accounts, certificates of deposit, consumer loans and credit cards. As a direct bank, MWABank primarily offers services online (at www.MWABank.com, a site under construction), through mail, via ATM and by phone.

Modern Woodmen’s ability to meet obligations
Life insurance and annuity certificate reserves, which are funds held to guarantee future benefits to members, increased 14 percent to $4.6 billion.

Modern Woodmen’s solvency ratio of 116 percent means that for every $100 of liabilities, Modern Woodmen has $116 of assets.

Two independent rating services verified Modern Woodmen’s financial strength in 2002. A.M. Best rates Modern Woodmen in the Superior category, based on financial strength, operating performance and market profile. Fitch rates Modern Woodmen’s financial strength in the Very Strong category, 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 $83 million in 2002. Life insurance and annuity certificate benefits to members (including death benefits, annuity benefits and surrender benefits) reached almost $300 million.

Fraternal programs serve families and communities
Modern Woodmen has a nationwide membership of 765,000. The dollars Modern Woodmen allocates to fraternal programs and services for members’ families and their communities are even more important to our country as federal and state resources are stretched.

Fraternal expenditures in support of Modern Woodmen’s family-oriented member benefits (including grief assistance, disaster relief funds, college scholarships and more), social and community service programs by member chapters (called camps) nationwide, and educational programs for schools and youth groups were more that $19 million, a 2.6 percent increase over 2001.

An example of community service programs includes fund-raising projects to meet local needs in member communities nationwide. Matching Fund projects, conducted by some of Modern Woodmen’s 2,230 adult camps and 700 youth clubs, resulted in $ 5.2 million contributed.

Modern Woodmen of America is a fraternal life insurance organization based in Rock Island, Ill. Modern Woodmen serves members nationwide, offering life insurance, annuity and investment* products, along with fraternal member benefits for families and their communities.

For additional information, contact Kim Woodward; (309) 793-5660