Citizens(CIA) - 2022 Q1 - Quarterly Report

Revenue and Premiums - Total premium revenue increased by $0.3 million, or 0.9%, for the three months ended March 31, 2022, compared to the same period in 2021, driven by higher renewal premiums in both segments [138]. - Total insurance issued increased by 2.5% from $94.99 million in the first three months of 2021 to $97.35 million in 2022, primarily driven by the Home Service Insurance segment [133]. - Premium revenue in the Home Service Insurance segment increased by 3.9% to $12.433 million in Q1 2022 compared to $11.969 million in Q1 2021, driven by higher renewal year premiums [173]. - Total revenues for the Life Insurance segment increased slightly to $39,697,000 in Q1 2022 from $39,466,000 in Q1 2021 [161]. - Total revenues for the Home Service Insurance segment slightly decreased to $15.435 million in Q1 2022 from $15.539 million in Q1 2021 [173]. Investment Performance - Total investments amounted to $1.5 billion, with fixed maturity securities comprising 89.6% of total investments as of March 31, 2022 [127]. - Net investment income increased by $0.2 million from the 2021 period to $15.487 million in the 2022 period, attributed to a growing asset base and positive returns from middle market private equity investments [122]. - The average annualized yield on average invested assets was 4.20% for the three months ended March 31, 2022, slightly down from 4.21% in the prior year [140]. - Annualized net investment income increased to $47,883,000 in Q1 2022 from $46,393,000 in Q1 2021, with an annualized yield of 4.22% [166]. - The carrying value of fixed maturity securities decreased to $1.355 billion as of March 31, 2022, from $1.471 billion at December 31, 2021, reflecting interest rate sensitivity [181]. Claims and Benefits - Death claims decreased in the first quarter of 2022 compared to the same period in 2021, contributing to a net loss reduction of $2.2 million, from $3.6 million to $1.3 million [128]. - Total insurance benefits paid or provided decreased to $36,356,000 in Q1 2022 from $37,127,000 in Q1 2021, a decline of 2.1% [145]. - Death claim benefits decreased by 21.5% to $7,017,000 in Q1 2022 compared to $8,940,000 in Q1 2021, with Life Insurance segment claims down 63.1% [148]. - Surrender benefits decreased by 4.3% to $12,259,000 in Q1 2022 from $12,807,000 in Q1 2021 [149]. - Total claims and surrenders in Q1 2022 amounted to $28,434,000, down from $30,589,000 in Q1 2021, a decrease of 7.0% [148]. Expenses and Management - Operating expenses decreased by $0.4 million in 2022 compared to 2021, reflecting improved cost management [126]. - Total benefits and expenses in the Home Service Insurance segment increased to $16.675 million in Q1 2022 from $16.297 million in Q1 2021 [173]. - The loss before federal income tax expense in the Home Service Insurance segment increased to $1.240 million in Q1 2022 from a loss of $0.758 million in Q1 2021 [173]. Financial Position - Total stockholders' equity stood at $0.2 billion as of March 31, 2022, with no debt reported [127]. - The company’s cash and invested assets totaled $1.533 billion as of March 31, 2022, with 88.4% invested in fixed maturity securities [178]. - Cash and cash equivalents decreased to $21.298 million as of March 31, 2022, from $27.294 million at December 31, 2021, primarily due to reinvestment in higher interest rate securities [182]. - The company anticipates meeting its short-term and long-term cash needs through cash generated by its insurance operations and invested assets [194]. Market and Economic Conditions - The company continues to monitor the impact of the COVID-19 pandemic on its operations, with uncertainties regarding future claims and premium revenues [130]. - Death claims have decreased to normal levels in 2022 after being high in 2021 due to COVID-19 [204]. - The interest rate of the ten-year U.S. Treasury bond increased to 2.32% at March 31, 2022, from 1.52% at December 31, 2021 [211]. Capital and Liquidity - The company has a Credit Facility with Regions Bank, which provides additional liquidity for short-term and long-term needs, although no funds have been drawn as of March 31, 2022 [197]. - For the three months ended March 31, 2022, the company generated $12.1 million in net cash from operations [199]. - Net cash used in investing activities totaled $19.8 million for the three months ended March 31, 2022 [200]. - Cash provided by financing activities was $1.7 million during the same period, primarily from the issuance of shares under the SIP [201].