Citizens(US:CIA)2020-05-07 19:44Financial Performance - Citizens, Inc. reported a net loss of $3.6 million for Q1 2020, an improvement from a net loss of $3.8 million in the same period last year, resulting in a $0.01 per share improvement [127]. - Total revenues decreased by 11% year-over-year to $55.7 million in Q1 2020, primarily due to realized investment losses compared to a one-time gain in the prior year [127]. - Total revenues for the three months ended March 31, 2020, were $55,722,000, a decrease of 10.5% compared to $62,406,000 for the same period in 2019 [132]. - Total revenue for Q1 2020 was $42,558 thousand, down from $46,723 thousand in Q1 2019, reflecting a decrease in premiums and realized investment gains [162]. - Total benefits and expenses for Q1 2020 were $57,957,000, a decrease of 4.8% from $60,398,000 in Q1 2019 [139]. Insurance Premiums and Claims - Insurance premiums declined by 2.7% in Q1 2020, totaling $41.3 million, with first-year premiums in the Life Insurance segment increasing by 19.4% [127]. - Life insurance premiums decreased by 2.5% to $39,946,000 in Q1 2020 from $40,980,000 in Q1 2019, while first-year premiums in the Life Insurance segment increased by 19.4% [132]. - Claims and surrenders expense increased by 14.8% in Q1 2020, primarily due to higher surrender benefits and matured endowments in the Life Insurance segment [127]. - Claims and surrenders increased by 15.5% to $26,449,000 in Q1 2020 compared to $23,033,000 in Q1 2019 [141]. - Claims and surrenders increased by 17.4% in Q1 2020, totaling $20,160 thousand compared to $17,162 thousand in Q1 2019, with a notable 27.4% rise in surrender benefits [169]. Investment Income and Performance - Net investment income increased by 10.0% year-over-year to $15.2 million, driven by a growing asset base and improved cash management [127]. - Net investment income for the first quarter of 2020 was $15,169,000, an increase of 9.9% from $13,796,000 in Q1 2019 [134]. - Net investment income for Q1 2020 was $11,480 thousand, an increase from $10,169 thousand in Q1 2019, attributed to growth in average invested assets [162]. - The average yield on the consolidated portfolio was an annualized rate of 4.31% for Q1 2020, compared to 4.08% in the same period of 2019 [127]. - The annualized yield on average invested assets was 4.31% for Q1 2020, compared to 4.08% for the same period in 2019 [134]. - The annualized yield on average invested assets improved to 4.48% in Q1 2020 from 4.36% in Q1 2019 [185]. Asset Management and Securities - Citizens, Inc. had approximately $1.7 billion in assets and $4.7 billion in direct insurance in force as of March 31, 2020 [120]. - The total carrying value of the company's securities was $1,356,244, a decrease of 1.5% from $1,377,959 as of December 31, 2019 [199]. - The company held 37.0% of its securities rated AA, down from 37.2% in the previous period, while AAA rated securities decreased from 4.1% to 3.5% [199]. - The total fair value of municipal fixed maturity securities was $503,295, with 54.5% rated AA and 31.0% rated A [204]. - The investment portfolio consists of 92.7% marketable fixed maturity securities classified as available-for-sale, with a significant portion maturing in the next several years [210]. Operational and Strategic Initiatives - General expenses decreased by 18.8% in Q1 2020, reflecting the execution of strategic cost-saving initiatives [127]. - The company expects to maintain sufficient liquidity to meet its operational needs despite potential impacts from the COVID-19 pandemic [208]. - The company closely monitors credit ratings for potential downgrades due to the COVID-19 pandemic [200]. - The company has not experienced increased surrenders due to the COVID-19 pandemic, but continues to monitor early withdrawals [211]. Tax and Compliance - The effective tax rate for Q1 2020 was (60.3)%, significantly lower than 289.3% for the same period in 2019, influenced by prior gains [145]. - As of March 31, 2020, the company established a liability of $10.0 million for probable liabilities and expenses related to a tax compliance matter [213].