EX-99.2 3 sya-20150630exhibit992supp.htm EXHIBIT 99.2 SYA-2015.06.30 Exhibit 99.2 Supplement


Exhibit 99.2
 
 
 
 
 
  
July 30, 2015
 
SECOND QUARTER 2015
 
Symetra Financial Corporation (SYA)
Financial Supplement
All financial information in this document is unaudited

































Symetra Financial Corporation
Financial Supplement
Table of Contents
June 30, 2015
 
 
 
 
Page        
Financial Highlights
1
 
 
Consolidated Results
 
Consolidated Income Statement Data
2
Consolidated Balance Sheet Data
3
Segment Income Statement Data
4
 
 
Segment Results
 
Benefits Division
5
Retirement Division:
 
Deferred Annuities
6
Income Annuities
7
Individual Life Division
8
Other
9
 
 
Additional Financial Data
 
Deferred Policy Acquisition Costs (DAC) Roll Forward
10
Deferred Sales Inducements (DSI) Roll Forward
11
Account Values and Reserves Roll Forwards
12
Overview of Liabilities and Associated Unrealized Gains
13
Investments Summary
14
Investments Income Statement Data
15
Sales by Segment and Product
16
Book Value, Adjusted Book Value and Statutory Book Value per Share
17
ROE and Operating ROAE
18
 
 




Symetra Financial Corporation
2Q 2015 Financial Supplement
Financial Highlights
(In millions, except per share or percentage data)
 
  
 
For the Three Months Ended
For the Six Months Ended
  
 
Jun 30,
2015
 
Mar 31,
2015
 
Dec 31,
2014
 
Sep 30,
2014
 
Jun 30,
2014
Jun 30,
2015
Jun 30,
2014
Net income
$
31.2

 
$
38.8

 
$
67.6

 
$
36.0

 
$
71.5

$
70.0

$
150.8

Net income per common share 1
 
 
 
 
 
 
 
 
 
 
 
 
Basic
$
0.27

 
$
0.33

 
$
0.58

 
$
0.31

 
$
0.62

$
0.60

$
1.29

 
Diluted
$
0.27

 
$
0.33

 
$
0.58

 
$
0.31

 
$
0.62

$
0.60

$
1.29

Weighted-average number of common shares outstanding:
 
 
 
 
 
 
 
 
 
 
 
 
Basic
116.127

 
115.900

 
115.923

 
115.904

 
115.961

116.014

116.706

 
Diluted
116.130

 
115.903

 
115.925

 
115.907

 
115.964

116.017

116.710

Cash dividend declared per common share
$
0.11

 
$
0.11

 
$
1.40

 
$
0.10

 
$
0.10

$
0.22

$
0.20

Non-GAAP Financial Measures 2
 
 
 
 
 
 
 
 
 
 
 
Adjusted operating income
$
49.6

 
$
42.7

 
$
60.7

 
$
45.5

 
$
55.3

$
92.3

$
121.0

Adjusted operating income per common share: 1
 
 
 
 
 
 
 
 
 
 
 
 
Basic
$
0.43

 
$
0.37

 
$
0.52

 
$
0.39

 
$
0.48

$
0.80

$
1.04

 
Diluted
$
0.43

 
$
0.37

 
$
0.52

 
$
0.39

 
$
0.48

$
0.80

$
1.04

  
 
As of
  
 
Jun 30,
2015
 
Mar 31,
2015
 
Dec 31,
2014
 
Sep 30,
2014
 
Jun 30,
2014
Consolidated Balance Sheet Data
 
 
 
 
 
 
 
 
 
Total investments
$
31,443.6

 
$
31,413.0

 
$
30,634.3

 
$
30,274.0

 
$
29,632.2

Total assets
34,069.1

 
33,847.9

 
33,001.7

 
32,634.5

 
31,943.6

Notes payable
697.4

 
697.3

 
697.2

 
697.0

 
449.6

Accumulated other comprehensive income (net of taxes) (AOCI)
751.7

 
1,152.8

 
990.6

 
911.1

 
990.6

Total stockholders' equity
3,170.2

 
3,550.7

 
3,360.6

 
3,375.3

 
3,428.6

U.S. Statutory Financial Information:
 
 
 
 
 
 
 
 
 
Statutory capital and surplus
$
2,070.1

 
$
2,085.4

 
$
2,078.3

 
$
1,951.2

 
$
1,944.7

Asset valuation reserve (AVR)
303.4

 
304.5

 
299.2

 
315.4

 
312.3

Statutory book value 3
$
2,373.5

 
$
2,389.9

 
$
2,377.5

 
$
2,266.6

 
$
2,257.0

Common shares outstanding, end of period
116.134

 
116.114

 
115.797

 
115.913

 
115.895

Book value per common share
$
27.30

 
$
30.58

 
$
29.02

 
$
29.12

 
$
29.58

Debt to capital ratio
18.0
%
 
16.4
%
 
17.2
%
 
17.1
%
 
11.6
%
Non-GAAP Financial Measures 2
 
 
 
 
 
 
 
 
 
Adjusted book value (stockholders' equity excluding AOCI)
$
2,418.5

 
$
2,397.9

 
$
2,370.0

 
$
2,464.2

 
$
2,438.0

Adjusted book value per common share 4
20.83

 
20.65

 
20.47

 
21.26

 
21.04

Statutory book value per common share 5
20.44

 
20.58

 
20.53

 
19.55

 
19.47

Debt to capital ratio, excluding AOCI 6
22.4
%
 
22.5
%
 
22.7
%
 
22.0
%
 
15.6
%
  
 
For the Twelve Months Ended
  
 
Jun 30,
2015
 
Mar 31,
2015
 
Dec 31,
2014
 
Sep 30,
2014
 
Jun 30,
2014
ROE
5.1
%
 
6.3
%
 
7.8
%
 
7.9
%
 
8.3
%
Non-GAAP Financial Measure 2
 
 
 
 
 
 
 
 
 
Operating ROAE 7
8.2
%
 
8.5
%
 
9.5
%
 
9.1
%
 
9.4
%
1

Basic net income and adjusted operating income per common share include all participating securities using the two-class method. Diluted net income and adjusted operating income per common share include the dilutive impact of non-participating securities, based on the application of the treasury stock method. Shares included in these calculations are weighted for the portion of the period they were outstanding. Antidilutive awards were excluded from the computation of diluted earnings per share.
2

Management considers these non-GAAP measures to be a useful supplement to their most comparable GAAP measure in evaluating financial performance and condition. Non-GAAP measures including adjusted operating income and the corresponding basic and diluted per share amounts, adjusted book value and the corresponding per share amounts, statutory book value per share amounts and operating ROAE have been reconciled to their most directly comparable GAAP measures on pages 2, 17, and 18, respectively.
3

June 30, 2015 statutory book value is an estimate.
4

Adjusted book value per common share is calculated as adjusted book value divided by common shares outstanding.
5

Statutory book value per common share is calculated based on statutory book value divided by common shares outstanding.
6

Debt to capital ratio, excluding AOCI is calculated as notes payable divided by the sum of notes payable and adjusted book value.
7

Operating ROAE (return on average equity) is calculated based on adjusted operating income divided by average adjusted book value.


1




Symetra Financial Corporation
2Q 2015 Financial Supplement
Consolidated Income Statement Data
(In millions, except per share data)
 
 
 
 
For the Three Months Ended
 
For the Six Months Ended
 
 
 
Jun 30,
2015
 
Mar 31,
2015
 
Dec 31,
2014
 
Sep 30,
2014
 
Jun 30,
2014
 
Jun 30,
2015
 
Jun 30,
2014
Revenues:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Premiums
$
178.8

 
$
180.3

 
$
161.0

 
$
159.6

 
$
154.7

 
$
359.1

 
$
308.5

 
Net investment income
330.4

 
324.0

 
358.6

 
318.5

 
319.0

 
654.4

 
643.4

 
Policy fees, contract charges and other
54.4

 
51.6

 
50.0

 
45.7

 
48.1

 
106.0

 
94.7

 
Net realized gains (losses):
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total other-than-temporary impairment losses on securities
(3.8
)
 
(9.0
)
 
(12.2
)
 
(1.6
)
 
(1.4
)
 
(12.8
)
 
(2.5
)
 
 
Less: portion recognized in other comprehensive income
1.2

 
1.0

 
2.2

 
—

 
—

 
2.2

 
—

 
 
Net impairment losses on securities recognized in earnings
(2.6
)
 
(8.0
)
 
(10.0
)
 
(1.6
)
 
(1.4
)
 
(10.6
)
 
(2.5
)
 
Other net realized gains (losses)
(26.0
)
 
1.8

 
21.2

 
(13.2
)
 
26.7

 
(24.2
)
 
48.5

 
Total net realized gains (losses)
(28.6
)
 
(6.2
)
 
11.2

 
(14.8
)
 
25.3

 
(34.8
)
 
46.0

Total revenues
535.0

 
549.7

 
580.8

 
509.0

 
547.1

 
1,084.7

 
1,092.6

Benefits and expenses:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Policyholder benefits and claims
138.2

 
142.1

 
120.7

 
113.9

 
110.1

 
280.3

 
211.3

 
Interest credited
242.9

 
235.2

 
246.1

 
237.2

 
236.3

 
478.1

 
470.5

 
Other underwriting and operating expenses
100.0

 
99.2

 
93.7

 
92.8

 
92.6

 
199.2

 
180.5

 
Interest expense
11.0

 
11.2

 
11.0

 
10.2

 
8.3

 
22.2

 
16.5

 
Amortization of deferred policy acquisition costs
22.7

 
21.6

 
24.0

 
17.6

 
16.6

 
44.3

 
36.5

Total benefits and expenses
514.8

 
509.3

 
495.5

 
471.7

 
463.9

 
1,024.1

 
915.3

Income from operations before income taxes
20.2

 
40.4

 
85.3

 
37.3

 
83.2

 
60.6

 
177.3

Provision (benefit) for income taxes:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Current
7.5

 
6.5

 
26.2

 
10.8

 
17.4

 
14.0

 
27.5

 
Deferred
(18.5
)
 
(4.9
)
 
(8.5
)
 
(9.5
)
 
(5.7
)
 
(23.4
)
 
(1.0
)
Total provision (benefit) for income taxes
(11.0
)
 
1.6

 
17.7

 
1.3

 
11.7

 
(9.4
)
 
26.5

Net income
$
31.2

 
$
38.8

 
$
67.6

 
$
36.0

 
$
71.5

 
$
70.0

 
$
150.8

Net income per common share:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Basic
$
0.27

 
$
0.33

 
$
0.58

 
$
0.31

 
$
0.62

 
$
0.60

 
$
1.29

 
Diluted
$
0.27

 
$
0.33

 
$
0.58

 
$
0.31

 
$
0.62

 
$
0.60

 
$
1.29

Weighted-average number of common shares outstanding:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Basic
116.127

 
115.900

 
115.923

 
115.904

 
115.961

 
116.014

 
116.706

 
Diluted
116.130

 
115.903

 
115.925

 
115.907

 
115.964

 
116.017

 
116.710

Cash dividends declared per common share
$
0.11

 
$
0.11

 
$
1.40

 
$
0.10

 
$
0.10

 
$
0.22

 
$
0.20

Non-GAAP Financial Measures:
 
 
 
 
 
 
 
 
 
 
 
 
 
Adjusted operating income 1
$
49.6

 
$
42.7

 
$
60.7

 
$
45.5

 
$
55.3

 
$
92.3

 
$
121.0

Adjusted operating income per common share:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Basic
$
0.43

 
$
0.37

 
$
0.52

 
$
0.39

 
$
0.48

 
$
0.80

 
$
1.04

 
Diluted
$
0.43

 
$
0.37

 
$
0.52

 
$
0.39

 
$
0.48

 
$
0.80

 
$
1.04

Reconciliation to net income:
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income
$
31.2

 
$
38.8

 
$
67.6

 
$
36.0

 
$
71.5

 
$
70.0

 
$
150.8

 
Less: Excluded realized gains (losses) (net of taxes)
(18.4
)
 
(3.9
)
 
6.9

 
(9.5
)
 
16.2

 
(22.3
)
 
29.8

Adjusted operating income 1
$
49.6

 
$
42.7

 
$
60.7

 
$
45.5

 
$
55.3

 
$
92.3

 
$
121.0


1

Adjusted operating income is calculated as net income, excluding after-tax net realized gains (losses) that are not reflective of the performance of the company’s insurance operations. The company excludes gains (losses) associated with the following: investment sales or disposals, investment impairments, changes in the fair value of mark-to-market investments and derivative investments (except for certain S&P 500 options), and changes in the fair value of embedded derivatives related to our fixed indexed annuity products.



2



Symetra Financial Corporation
2Q 2015 Financial Supplement
Consolidated Balance Sheet Data
(In millions)
 
 
 
 
As of
 
 
 
Jun 30,
2015
 
Mar 31,
2015
 
Dec 31,
2014
 
Sep 30,
2014
 
Jun 30,
2014
Assets
 
 
 
 
 
 
 
 
 
Investments:
 
 
 
 
 
 
 
 
 
 
Available-for-sale securities:
 
 
 
 
 
 
 
 
 
 
 
Fixed maturities, at fair value
$
25,938.4

 
$
26,030.7

 
$
25,379.4

 
$
25,316.6

 
$
24,849.2

 
 
Marketable equity securities, at fair value
92.4

 
118.3

 
120.5

 
122.7

 
126.6

 
Trading securities:
 
 
 
 
 
 
 
 
 
 
 
Marketable equity securities, at fair value
538.7

 
546.4

 
532.0

 
467.9

 
483.0

 
Mortgage loans, net
4,431.1

 
4,222.9

 
4,130.1

 
3,921.0

 
3,747.8

 
Policy loans
60.0

 
60.8

 
61.9

 
61.0

 
62.0

 
Investments in limited partnerships
280.1

 
296.1

 
309.9

 
307.9

 
291.8

 
Other invested assets
102.9

 
137.8

 
100.5

 
76.9

 
71.8

Total investments
31,443.6

 
31,413.0

 
30,634.3

 
30,274.0

 
29,632.2

Cash and cash equivalents
300.1

 
231.5

 
158.8

 
109.2

 
118.0

Accrued investment income
304.6

 
304.4

 
304.9

 
309.2

 
298.3

Reinsurance recoverables
341.3

 
333.0

 
328.7

 
324.4

 
312.9

Deferred policy acquisition costs
490.8

 
385.6

 
395.1

 
364.9

 
311.2

Receivables and other assets
255.6

 
226.3

 
230.1

 
300.7

 
276.8

Separate account assets
933.1

 
954.1

 
949.8

 
952.1

 
994.2

Total assets
$
34,069.1

 
$
33,847.9

 
$
33,001.7

 
$
32,634.5

 
$
31,943.6

Liabilities and stockholders' equity
 
 
 
 
 
 
 
 
 
 
Funds held under deposit contracts
$
27,824.4

 
$
27,103.2

 
$
26,602.6

 
$
26,150.2

 
$
25,603.3

 
Future policy benefits
424.4

 
418.4

 
415.9

 
408.2

 
405.3

 
Policy and contract claims
167.6

 
148.9

 
141.8

 
156.6

 
156.7

 
Other policyholders' funds
134.8

 
139.7

 
115.7

 
121.3

 
117.6

 
Notes payable
697.4

 
697.3

 
697.2

 
697.0

 
449.6

 
Deferred income tax liabilities, net
244.6

 
479.1

 
396.7

 
362.3

 
414.7

 
Other liabilities
472.6

 
356.5

 
321.4

 
411.5

 
373.6

 
Separate account liabilities
933.1

 
954.1

 
949.8

 
952.1

 
994.2

Total liabilities
30,898.9

 
30,297.2

 
29,641.1

 
29,259.2

 
28,515.0

Preferred stock
—

 
—

 
—

 
—

 
—

Common stock
1.2

 
1.2

 
1.2

 
1.2

 
1.2

Additional paid-in-capital
1,474.3

 
1,472.1

 
1,469.5

 
1,469.9

 
1,468.0

Treasury stock
(134.6
)
 
(134.6
)
 
(134.6
)
 
(134.6
)
 
(134.6
)
Retained earnings
1,077.6

 
1,059.2

 
1,033.9

 
1,127.7

 
1,103.4

Accumulated other comprehensive income, net of taxes
751.7

 
1,152.8

 
990.6

 
911.1

 
990.6

Total stockholders' equity
3,170.2

 
3,550.7

 
3,360.6

 
3,375.3

 
3,428.6

Total liabilities and stockholders' equity
$
34,069.1

 
$
33,847.9

 
$
33,001.7

 
$
32,634.5

 
$
31,943.6



3



Symetra Financial Corporation
2Q 2015 Financial Supplement
Segment Income Statement Data
(In millions)
 
 
 
 
For the Three Months Ended
 
For the Six Months Ended
 
 
 
Jun 30,
2015
 
Mar 31,
2015
 
Dec 31,
2014
 
Sep 30,
2014
 
Jun 30,
2014
 
Jun 30,
2015
 
Jun 30,
2014
Operating revenues:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Benefits Division
$
180.9

 
$
181.7

 
$
162.2

 
$
160.0

 
$
155.8

 
$
362.6

 
$
309.7

 
Retirement Division:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Deferred Annuities
167.7

 
158.9

 
178.0

 
157.5

 
152.0

 
326.6

 
307.8

 
 
Income Annuities
94.9

 
92.1

 
96.0

 
93.8

 
96.0

 
187.0

 
193.2

 
Individual Life Division
124.0

 
120.7

 
120.4

 
113.9

 
115.6

 
244.7

 
231.5

 
Other
(4.2
)
 
2.3

 
13.6

 
(1.5
)
 
2.7

 
(1.9
)
 
4.5

Operating revenues 1
563.3

 
555.7

 
570.2

 
523.7

 
522.1

 
1,119.0

 
1,046.7

 
Add: Excluded realized gains (losses)
(28.3
)
 
(6.0
)
 
10.6

 
(14.7
)
 
25.0

 
(34.3
)
 
45.9

Revenues
$
535.0

 
$
549.7

 
$
580.8

 
$
509.0

 
$
547.1

 
$
1,084.7

 
$
1,092.6

Segment pre-tax adjusted operating income (loss):
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Benefits Division
$
19.3

 
$
18.5

 
$
21.6

 
$
20.6

 
$
19.9

 
$
37.8

 
$
47.7

 
Retirement Division:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Deferred Annuities
30.5

 
28.4

 
40.8

 
30.7

 
27.4

 
58.9

 
57.6

 
 
Income Annuities
2.4

 
1.3

 
0.9

 
2.1

 
3.5

 
3.7

 
12.9

 
Individual Life Division
11.7

 
7.2

 
9.1

 
10.7

 
13.6

 
18.9

 
25.9

 
Other
(15.4
)
 
(9.0
)
 
2.3

 
(12.1
)
 
(6.2
)
 
(24.4
)
 
(12.7
)
Pre-tax adjusted operating income 2
48.5

 
46.4

 
74.7

 
52.0

 
58.2

 
94.9

 
131.4

 
Add: Excluded realized gains (losses)
(28.3
)
 
(6.0
)
 
10.6

 
(14.7
)
 
25.0

 
(34.3
)
 
45.9

Income from operations before income taxes
$
20.2

 
$
40.4

 
$
85.3

 
$
37.3

 
$
83.2

 
$
60.6

 
$
177.3

1

Operating revenues is a non-GAAP measure, calculated as total revenues less excluded realized gains (losses). It also represents the cumulative total of segment operating revenue, which at the segment level is a GAAP measure. Total revenues is the most directly comparable measure to operating revenues.
2

Pre-tax adjusted operating income is a non-GAAP measure, calculated as adjusted operating income on a pre-tax basis. It also represents the cumulative total of segment pre-tax adjusted operating income, which at the segment level is a GAAP measure. Income from operations before income taxes is the most directly comparable measure to pre-tax adjusted operating income.



4




Symetra Financial Corporation
2Q 2015 Financial Supplement
Benefits Division
(In millions, except percentage data)
 
 
 
 
For the Three Months Ended
 
For the Six Months Ended
 
 
 
Jun 30,
2015
 
Mar 31,
2015
 
Dec 31,
2014
 
Sep 30,
2014
 
Jun 30,
2014
 
Jun 30,
2015
 
Jun 30,
2014
Operating revenues:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Premiums
 
$
170.7

 
$
171.7

 
$
153.1

 
$
150.9

 
$
146.3

 
$
342.4

 
$
291.3

 
Net investment income
 
5.7

 
5.2

 
5.4

 
5.4

 
5.2

 
10.9

 
10.2

 
Policy fees, contract charges and other
 
4.5

 
4.8

 
3.7

 
3.7

 
4.3

 
9.3

 
8.2

Total operating revenues
 
180.9

 
181.7

 
162.2

 
160.0

 
155.8

 
362.6

 
309.7

Benefits and expenses:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Policyholder benefits and claims
 
113.1

 
114.1

 
96.7

 
94.7

 
91.7

 
227.2

 
174.5

 
Other underwriting and operating expenses
 
48.1

 
48.7

 
43.6

 
44.6

 
44.0

 
96.8

 
87.2

 
Amortization of deferred policy acquisition costs
 
0.4

 
0.4

 
0.3

 
0.1

 
0.2

 
0.8

 
0.3

Total benefits and expenses
 
161.6

 
163.2

 
140.6

 
139.4

 
135.9

 
324.8

 
262.0

Segment pre-tax adjusted operating income
 
$
19.3

 
$
18.5

 
$
21.6

 
$
20.6

 
$
19.9

 
$
37.8

 
$
47.7

Operating Metrics:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Loss ratio 1
 
66.3
%
 
66.4
%
 
63.2
%
 
62.7
%
 
62.7
%
 
66.4
%
 
59.9
%
Expense ratio 2
 
27.3
%
 
27.6
%
 
28.4
%
 
29.4
%
 
30.0
%
 
27.4
%
 
29.8
%
Combined ratio 3
 
93.6
%
 
94.0
%
 
91.6
%
 
92.1
%
 
92.7
%
 
93.8
%
 
89.7
%
Medical stop-loss - loss ratio 4
 
65.0
%
 
67.1
%
 
61.9
%
 
63.6
%
 
60.9
%
 
66.1
%
 
58.4
%
Total sales 5
 
$
19.5

 
$
136.7

 
$
33.9

 
$
34.8

 
$
26.1

 
$
156.2

 
$
98.0

Premiums:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Medical stop-loss
 
$
140.2

 
$
141.3

 
$
126.4

 
$
124.0

 
$
122.9

 
$
281.5

 
$
244.6

 
Limited benefit medical
 
11.4

 
11.8

 
12.8

 
12.7

 
12.3

 
23.2

 
25.6

 
Group life & disability and other
 
19.1

 
18.6

 
13.9

 
14.2

 
11.1

 
37.7

 
21.1

Total premiums earned
 
$
170.7

 
$
171.7

 
$
153.1

 
$
150.9

 
$
146.3

 
$
342.4

 
$
291.3

 
5 Year Historical Loss Ratio: 1
 
For the Three Months Ended
 
For the Year
Ended
 
 
1Q
 
2Q
 
3Q
 
4Q
 
 
2014
 
57.1
%
 
62.7
%
 
62.7
%
 
63.2
%
 
61.5
%
2013
 
68.5
%
 
66.2
%
 
67.3
%
 
64.0
%
 
66.5
%
2012
 
61.6
%
 
65.5
%
 
65.5
%
 
67.7
%
 
65.1
%
2011
 
67.6
%
 
62.4
%
 
63.6
%
 
59.6
%
 
63.1
%
2010
 
68.9
%
 
63.8
%
 
66.5
%
 
60.5
%
 
64.9
%
1

 Loss ratio represents policyholder benefits and claims incurred divided by premiums earned.
2

Expense ratio is equal to other underwriting and operating expenses of our insurance operations divided by premiums earned.
3

Combined ratio is equal to the sum of the loss ratio and the expense ratio.
4

Medical stop-loss loss ratio represents medical stop-loss policyholder benefits and claims incurred divided by medical stop-loss premiums earned.
5

Total sales represents annualized first-year premiums net of first year policy lapses.



5




Symetra Financial Corporation
2Q 2015 Financial Supplement
Retirement Division — Deferred Annuities
(In millions, except percentage data)
 
 
For the Three Months Ended
 
For the Six Months Ended
 
 
Jun 30,
2015
 
Mar 31,
2015
 
Dec 31,
2014
 
Sep 30,
2014
 
Jun 30,
2014
 
Jun 30,
2015
 
Jun 30,
2014
Operating revenues:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net investment income
$
162.1

 
$
154.0

 
$
171.8

 
$
152.0

 
$
145.8

 
$
316.1

 
$
295.9

 
Policy fees, contract charges and other
5.9

 
5.1

 
5.6

 
5.6

 
5.9

 
11.0

 
11.8

 
Certain realized gains (losses)
(0.3
)
 
(0.2
)
 
0.6

 
(0.1
)
 
0.3

 
(0.5
)
 
0.1

Total operating revenues
167.7

 
158.9

 
178.0

 
157.5

 
152.0

 
326.6

 
307.8

Benefits and expenses:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Policyholder benefits and claims
0.2

 
0.2

 
0.1

 
—

 
0.1

 
0.4

 
0.2

 
Interest credited
92.8

 
89.2

 
92.9

 
87.6

 
86.9

 
182.0

 
174.4

 
Other underwriting and operating expenses
25.0

 
23.9

 
24.0

 
23.6

 
22.9

 
48.9

 
44.0

 
Amortization of deferred policy acquisition costs
19.2

 
17.2

 
20.2

 
15.6

 
14.7

 
36.4

 
31.6

Total benefits and expenses
137.2

 
130.5

 
137.2

 
126.8

 
124.6

 
267.7

 
250.2

Segment pre-tax adjusted operating income
$
30.5

 
$
28.4

 
$
40.8

 
$
30.7

 
$
27.4

 
$
58.9

 
$
57.6

Operating Metrics:
 
 
 
 
 
 
 
 
 
 
 
 
 
Fixed account values, excluding FIA - General account
$
11,195.0

 
$
11,117.8

 
$
11,064.9

 
$
11,074.0

 
$
10,992.8

 
$
11,195.0

 
$
10,992.8

 
Interest spread 1
1.85
%
 
1.81
%
 
2.33
%
 
1.91
%
 
1.81
%
 
1.83
%
 
1.90
%
 
Base earned yield 2
4.24
%
 
4.32
%
 
4.40
%
 
4.43
%
 
4.44
%
 
4.28
%
 
4.48
%
 
Base credited rate 2
2.60
%
 
2.60
%
 
2.69
%
 
2.70
%
 
2.73
%
 
2.60
%
 
2.74
%
 
Base interest spread 2
1.64
%
 
1.72
%
 
1.71
%
 
1.73
%
 
1.71
%
 
1.68
%
 
1.74
%
Fixed account values, FIA - General account
$
4,318.9

 
$
3,730.3

 
$
3,313.8

 
$
2,907.2

 
$
2,463.3

 
$
4,318.9

 
$
2,463.3

 
FIA interest spread 3, 8
1.40
%
 
1.45
%
 
1.59
%
 
1.26
%
 
1.28
%
 
1.42
%
 
1.28
%
 
FIA base earned yield 4, 8
3.42
%
 
3.54
%
 
3.51
%
 
3.43
%
 
3.37
%
 
3.47
%
 
3.35
%
 
FIA base credited rate 4
2.10
%
 
2.08
%
 
2.17
%
 
2.14
%
 
2.09
%
 
2.09
%
 
2.07
%
 
FIA base interest spread 4, 8
1.32
%
 
1.46
%
 
1.34
%
 
1.29
%
 
1.28
%
 
1.38
%
 
1.28
%
Variable account values - Separate account
$
759.4

 
$
790.6

 
$
794.9

 
$
805.3

 
$
843.7

 
$
759.4

 
$
843.7

Total sales 5
933.9

 
655.6

 
642.3

 
759.3

 
650.3

 
1,589.5

 
1,277.8

Fixed Account Values - General Account by Contract Minimum Interest Guarantees as of June 30, 2015:
 
 
 
 
Contract Minimum Interest Guarantee 7
 
 
 
 
 
 
 


<= 3.5%


 
 
 
 
 
 
 
> 3.5% 6

> 1.5%

<= 1.5%
 
 
 
 
Fixed account values - General account (including FIA)
$
1,033.0


$
869.6


$
13,546.0

 
 
 
 
Credited rates in all spread metrics reflect interest that is credited on a daily basis, and therefore quarters with more/less days of interest reduce/increase interest spreads and base interest spreads.
1

Interest spread excludes FIA and is the difference between the net investment yield and the credited rate to policyholders. The net investment yield is the approximate yield on invested assets. The credited rate is the approximate rate credited on policyholder fixed account values. Interest credited is subject to contractual terms, including minimum guarantees.
2

Base interest spread excludes FIA and is the interest spread adjusted to exclude items that can vary significantly from period to period due to a number of factors and, therefore, may contribute to results that are not indicative of the underlying trends. This is primarily the impact of asset prepayments, such as bond make-whole premiums net of related deferred sales inducement amortization and the MBS prepayment speed adjustment.
3

FIA interest spread is the difference between the net investment yield and the credited rate to policyholders. The net investment yield is the approximate yield on invested assets, excluding derivative assets. The credited rate represents amounts recorded in interest credited related to FIA contracts.
4

FIA base interest spread is the FIA interest spread adjusted to exclude items that can vary significantly from period to period due to a number of factors and, therefore, may contribute to results that are not indicative of the underlying trends. This is primarily the impact of asset prepayments,such as bond make-whole premiums and the MBS prepayment speed adjustment, and the impact of reserve adjustments on interest credited.
5

Total sales represents deposits for new policies net of first year policy lapses and/or surrenders.
6

The maximum interest is 4.5% on a $110.4 block of business.
7

Excludes standard non-forfeiture impacts.
8

Prior period FIA interest spread, base earned yield and base interest spread have been restated to exclude from invested assets the cash collateral held on behalf of derivative counterparties. 

6



Symetra Financial Corporation
2Q 2015 Financial Supplement
Retirement Division—Income Annuities
(In millions, except percentage data)
 
 
 
 
For the Three Months Ended
 
For the Six Months Ended
 
 
 
Jun 30,
2015
 
Mar 31,
2015
 
Dec 31,
2014
 
Sep 30,
2014
 
Jun 30,
2014
 
Jun 30,
2015
 
Jun 30,
2014
Operating revenues:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net investment income
 
$
94.6

 
$
91.9

 
$
95.8

 
$
93.4

 
$
95.8

 
$
186.5

 
$
192.8

 
Policy fees, contract charges and other
 
0.3

 
0.2

 
0.2

 
0.4

 
0.2

 
0.5

 
0.4

Total operating revenues
 
94.9

 
92.1

 
96.0

 
93.8

 
96.0

 
187.0

 
193.2

Benefits and expenses:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Interest credited
 
86.4

 
84.0

 
88.9

 
85.3

 
85.9

 
170.4

 
167.9

 
Other underwriting and operating expenses
 
4.6

 
5.2

 
4.9

 
5.1

 
5.5

 
9.8

 
10.3

 
Amortization of deferred policy acquisition costs
 
1.5

 
1.6

 
1.3

 
1.3

 
1.1

 
3.1

 
2.1

Total benefits and expenses
 
92.5

 
90.8

 
95.1

 
91.7

 
92.5

 
183.3

 
180.3

Segment pre-tax adjusted operating income
 
$
2.4

 
$
1.3

 
$
0.9

 
$
2.1

 
$
3.5

 
$
3.7

 
$
12.9

Operating Metrics:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Reserves 1
 
$
6,474.0

 
$
6,484.2

 
$
6,487.7

 
$
6,494.8

 
$
6,516.6

 
$
6,474.0

 
$
6,516.6

Interest spread 2
 
0.56
%
 
0.30
%
 
0.57
%
 
0.46
%
 
0.48
%
 
0.43
%
 
0.50
%
Base earned yield 3
 
5.91
%
 
5.86
%
 
5.95
%
 
5.89
%
 
5.89
%
 
5.88
%
 
5.89
%
Base credited rate 3
 
5.35
%
 
5.39
%
 
5.39
%
 
5.36
%
 
5.44
%
 
5.37
%
 
5.46
%
Base interest spread 3
 
0.56
%
 
0.47
%
 
0.56
%
 
0.53
%
 
0.45
%
 
0.51
%
 
0.43
%
Mortality gains (losses) 4
 
$
(1.2
)
 
$
1.9

 
$
(3.0
)
 
$
0.2

 
$
0.8

 
$
0.7

 
$
6.1

Total sales 5
 
78.4

 
60.9

 
80.0

 
62.3

 
89.0

 
139.3

 
176.5

Marketable equity securities, at fair value
 
588.6

 
596.8

 
585.3

 
530.5

 
547.2

 
588.6

 
547.2

Realized gains (losses) on marketable equity securities 6
 
(11.5
)
 
8.4

 
27.7

 
(10.0
)
 
20.5

 
(3.1
)
 
39.7


5 Year Historical Mortality Gains (Losses): 4
 
For the Three Months Ended
 
For the Year Ended
 
 
1Q
 
2Q
 
3Q
 
4Q
 
 
2014
 
$
5.3

 
$
0.8

 
$
0.2

 
$
(3.0
)
 
$
3.3

2013
 
1.0

 
4.5

 
1.1

 
1.5

 
8.1

2012
 
5.4

 
6.4

 
2.0

 
(0.9
)
 
12.9

2011
 
0.7

 
4.9

 
(1.4
)
 
(3.9
)
 
0.3

2010
 
(0.1
)
 
(1.8
)
 
(0.1
)
 
(0.6
)
 
(2.6
)

5 Year Historical Gains (Losses) on Marketable Equity Securities 6
 
 
 
 
 
 
 
 
 
 
 
 
2014
 
 
 
 
 
 
 
 
 
$
57.4

 
 
2013
 
 
 
 
 
 
 
 
 
52.6

 
 
2012
 
 
 
 
 
 
 
 
 
26.6

 
 
2011
 
 
 
 
 
 
 
 
 
(4.9
)
 
 
2010
 
 
 
 
 
 
 
 
 
31.0

1

Reserves represents the present value of future income annuity benefits and assumed expenses, discounted by the assumed interest rate. This metric represents the amount of our in-force book of business.
2

Interest spread is the difference between the net investment yield and the credited rate to policyholders. The net investment yield is the approximate yield on invested assets, excluding equities, attributed to the segment. The credited rate is the approximate rate credited on policyholder reserves.
3

Base interest spread is the interest spread adjusted to exclude items that can vary significantly from period to period due to a number of factors and, therefore, may contribute to yields that are not indicative of the underlying trends. This is primarily the impact of asset prepayments, such as bond make-whole premiums and the MBS prepayment speed adjustment, and income on alternative investments.
4

Mortality gains (losses) represents the difference between actual and expected reserves released on our life contingent annuities.
5

Total sales represents deposits for new policies net of first year policy lapses and/or surrenders.
6

Realized gain (losses) on marketable equity securities include changes in the fair value of equities classified as trading and are not included in operating revenues.

7



Symetra Financial Corporation
2Q 2015 Financial Supplement
Individual Life Division
(In millions, except percentage data)
 
 
 
For the Three Months Ended
 
For the Six Months Ended
 
 
 
Jun 30,
2015
 
Mar 31,
2015
 
Dec 31,
2014
 
Sep 30,
2014
 
Jun 30,
2014
 
Jun 30,
2015
 
Jun 30,
2014
Operating revenues:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Premiums
 
$
8.1

 
$
8.6

 
$
7.9

 
$
8.7

 
$
8.4

 
$
16.7

 
$
17.2

 
Net investment income
 
72.7

 
71.1

 
72.4

 
69.6

 
70.1

 
143.8

 
141.0

 
Policy fees, contract charges and other
 
43.2

 
41.0

 
40.1

 
35.6

 
37.1

 
84.2

 
73.3

Total operating revenues
 
124.0

 
120.7

 
120.4

 
113.9

 
115.6

 
244.7

 
231.5

Benefits and expenses:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Policyholder benefits and claims
 
24.9

 
27.8

 
23.9

 
19.2

 
18.3

 
52.7

 
36.6

 
Interest credited
 
64.1

 
62.4

 
64.7

 
64.6

 
63.9

 
126.5

 
129.1

 
Other underwriting and operating expenses
 
21.5

 
20.8

 
20.5

 
18.8

 
19.2

 
42.3

 
37.4

 
Interest expense
 
0.2

 
0.1

 
—

 
—

 
—

 
0.3

 
—

 
Amortization of deferred policy acquisition costs
 
1.6

 
2.4

 
2.2

 
0.6

 
0.6

 
4.0

 
2.5

Total benefits and expenses
 
112.3

 
113.5

 
111.3

 
103.2

 
102.0

 
225.8

 
205.6

Segment pre-tax adjusted operating income
 
$
11.7

 
$
7.2

 
$
9.1

 
$
10.7

 
$
13.6

 
$
18.9

 
$
25.9

Operating Metrics:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Individual Insurance:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Insurance in force 1
 
$
36,094.4

 
$
35,738.6

 
$
35,471.6

 
$
35,168.0

 
$
35,125.5

 
$
36,094.4

 
$
35,125.5

 
Claims 2
 
12.0

 
15.3

 
15.8

 
14.3

 
12.7

 
27.3

 
27.5

 
Annualized mortality rate 3
 
0.13
%
 
0.17
%
 
0.18
%
 
0.16
%
 
0.14
%
 
0.15
%
 
0.16
%
 
UL account values
 
$
817.6

 
$
790.7

 
$
768.2

 
$
753.4

 
$
741.5

 
$
817.6

 
$
741.5

 
UL interest spread 4
 
1.53
%
 
1.19
%
 
1.51
%
 
1.36
%
 
1.35
%
 
1.36
%
 
1.42
%
 
UL base interest spread 5
 
0.93
%
 
0.97
%
 
1.07
%
 
1.17
%
 
1.25
%
 
0.94
%
 
1.28
%
 
Individual sales 6
 
$
15.1

 
$
13.1

 
$
12.7

 
$
8.3

 
$
9.1

 
$
28.2

 
$
17.0

Institutional Markets:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Insurance in force 1
 
$
13,087.6

 
$
12,982.0

 
$
12,836.1

 
$
12,842.6

 
$
12,844.8

 
$
13,087.6

 
$
12,844.8

 
BOLI account values
 
4,963.5

 
4,931.7

 
4,902.4

 
4,868.1

 
4,834.2

 
4,963.5

 
4,834.2

 
BOLI ROA 7
 
0.83
%
 
0.84
%
 
0.82
%
 
0.96
%
 
1.10
%
 
0.84
%
 
1.04
%
 
BOLI base ROA 8
 
0.68
%
 
0.74
%
 
0.62
%
 
0.92
%
 
0.79
%
 
0.71
%
 
0.85
%
 
Decrease in BOLI PGAAP reserve 9
 
$
—

 
$
—

 
$
—

 
$
1.7

 
$
1.7

 
$
—

 
$
3.4

 
COLI sales 10
 
11.4

 
9.7

 
1.0

 
—

 
—

 
21.1

 
—

5 Year Historical Individual Claims:2
For the Three Months Ended
 
For the Year Ended
 
 
1Q
 
2Q
 
3Q
 
4Q
 
 
2014
 
$
14.8

 
$
12.7

 
$
14.3

 
$
15.8

 
$
57.6

2013
 
15.7

 
13.7

 
14.0

 
11.3

 
54.7

2012
 
15.7

 
15.1

 
13.9

 
16.3

 
61.0

2011
 
15.7

 
12.1

 
13.0

 
13.5

 
54.3

2010
 
13.9

 
13.5

 
12.0

 
11.3

 
50.7

1

Insurance in force represents dollar face amounts of policies without adjustment for reinsurance.
2

Individual claims represents incurred claims, net of reinsurance, on our term and universal life policies.
3

Annualized mortality rate is defined as annualized individual claims divided by insurance in force.
4

UL interest spread excludes single premium life (SPL) and is the difference between the net investment yield and the credited rate to policyholders. The net investment yield is the approximate yield on invested assets in the general account attributed to UL policies. The credited rate is the approximate rate credited on UL policyholder account values. Interest credited is subject to contractual terms, including minimum guarantees.
5

UL base interest spread excludes SPL and is UL interest spread adjusted to exclude items that can vary significantly from period to period due to a number of factors and, therefore, may contribute to results that are not indicative of the underlying trends. This is primarily the impact of asset prepayments, such as bond make-whole premiums net of related bonus interest amortization, the MBS prepayment speed adjustment, and reserve adjustments.
6

Individual sales represents annualized first year premiums for recurring premium products and 10% of new single premium deposits, net of first year policy lapses and/or surrenders.
7

BOLI ROA is a measure of the gross margin on our BOLI book of business. This metric is calculated as the difference between our BOLI revenue earnings rate and our BOLI policy benefits rate. The revenue earnings rate is calculated as revenues divided by average invested assets. The policy benefits rate is calculated as total policy benefits divided by average account values. The policy benefits used in this metric do not include expenses.
8

BOLI base ROA is BOLI ROA adjusted to exclude items that can vary significantly from period to period due to a number of factors and, therefore, may contribute to yields that are not indicative of the underlying trends. This is primarily the impact of asset prepayments, such as bond make-whole premiums, the MBS prepayment speed adjustment, and reserve adjustments.
9

The BOLI PGAAP (purchase accounting) reserve was released as a decrease to policyholder benefits according to the pattern of profitability of the book of business of policies in force at the purchase accounting date, August 2, 2004. This reserve was released over a 10 year period ending August 2014. This represents the reduction of policyholder benefits expense related to the change in this reserve.
10

COLI sales represents deposits for new policies.

8



Symetra Financial Corporation
2Q 2015 Financial Supplement
Other
(In millions)
 
 
 
 
For the Three Months Ended
 
For the Six Months Ended
 
 
 
Jun 30,
2015
 
Mar 31,
2015
 
Dec 31,
2014
 
Sep 30,
2014
 
Jun 30,
2014
 
Jun 30,
2015
 
Jun 30,
2014
Operating revenues:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net investment income (loss) 1
 
$
(4.7
)
 
$
1.8

 
$
13.2

 
$
(1.9
)
 
$
2.1

 
$
(2.9
)
 
$
3.5

 
Policy fees, contract charges and other
 
0.5

 
0.5

 
0.4

 
0.4

 
0.6

 
1.0

 
1.0

Total operating revenues
 
(4.2
)
 
2.3

 
13.6

 
(1.5
)
 
2.7

 
(1.9
)
 
4.5

Benefits and expenses:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Interest credited
 
(0.4
)
 
(0.4
)
 
(0.4
)
 
(0.3
)
 
(0.4
)
 
(0.8
)
 
(0.9
)
 
Other underwriting and operating expenses
 
0.8

 
0.6

 
0.7

 
0.7

 
1.0

 
1.4

 
1.6

 
Interest expense
 
10.8

 
11.1

 
11.0

 
10.2

 
8.3

 
21.9

 
16.5

Total benefits and expenses
 
11.2

 
11.3

 
11.3

 
10.6

 
8.9

 
22.5

 
17.2

Segment pre-tax adjusted operating income (loss)
 
$
(15.4
)
 
$
(9.0
)
 
$
2.3

 
$
(12.1
)
 
$
(6.2
)
 
$
(24.4
)
 
$
(12.7
)

 
 
 
For the Three Months Ended
 
For the Six Months Ended
 
 
 
Jun 30,
2015
 
Mar 31,
2015
 
Dec 31,
2014
 
Sep 30,
2014
 
Jun 30,
2014
 
Jun 30,
2015
 
Jun 30,
2014
1

Detail of net investment income (loss)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Amortization of tax credit investments
 
$
(8.1
)
 
$
(7.1
)
 
$
(6.6
)
 
$
(8.1
)
 
$
(6.3
)
 
$
(15.2
)
 
$
(13.0
)
 
Alternative investments (primarily private equity/hedge funds)
 
(3.7
)
 
0.2

 
11.5

 
(2.5
)
 
(0.3
)
 
(3.5
)
 
(0.3
)
 
Investment income on fixed maturities and other investments
 
7.1

 
8.7

 
8.3

 
8.7

 
8.7

 
15.8

 
16.8

 
Net investment income (loss)
 
$
(4.7
)
 
$
1.8

 
$
13.2

 
$
(1.9
)
 
$
2.1

 
$
(2.9
)
 
$
3.5



9




Symetra Financial Corporation
2Q 2015 Financial Supplement
Deferred Policy Acquisition Costs (DAC) Roll Forward
(In millions) 
 
 
 
 
 
For the Three Months Ended
 
For the Six Months Ended
 
 
 
 
 
Jun 30,
2015
 
Mar 31,
2015
 
Dec 31,
2014
 
Sep 30,
2014
 
Jun 30,
2014
 
Jun 30,
2015
 
Jun 30,
2014
 
 
 
 
 
 
 
 
 
 
 
Summary -- Total Company
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Unamortized balance, beginning of period
 
$
541.7

 
$
513.9

 
$
487.1

 
$
464.2

 
$
441.3

 
$
513.9

 
$
419.9

 
 
Deferral of acquisition costs:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Commissions and premium-based taxes and fees
 
50.5

 
39.7

 
40.5

 
37.9

 
37.4

 
90.2

 
72.2

 
 
 
Other acquisition expenses
 
5.9

 
6.7

 
6.7

 
5.6

 
3.1

 
12.6

 
8.5

 
 
Total deferral of acquisition costs
 
56.4

 
46.4

 
47.2

 
43.5

 
40.5

 
102.8

 
80.7

 
 
Adjustments related to realized (gains) losses
 
(3.2
)
 
3.0

 
3.6

 
(3.0
)
 
(1.0
)
 
(0.2
)
 
0.1

 
 
 
Amortization
 
(20.8
)
 
(20.7
)
 
(19.3
)
 
(16.3
)
 
(15.9
)
 
(41.5
)
 
(31.4
)
 
 
 
Amortization related to prepayments
 
(1.9
)
 
(0.9
)
 
(4.7
)
 
(1.1
)
 
(0.7
)
 
(2.8
)
 
(5.1
)
 
 
 
Unlocking
 
—

 
—

 
—

 
(0.2
)
 
—

 
—

 
—

 
 
Total amortization
 
(22.7
)
 
(21.6
)
 
(24.0
)
 
(17.6
)
 
(16.6
)
 
(44.3
)
 
(36.5
)
 
 
Unamortized balance, end of period
 
572.2

 
541.7

 
513.9

 
487.1

 
464.2

 
572.2

 
464.2

 
 
Accum effect of net unrealized gains
 
(81.4
)
 
(156.1
)
 
(118.8
)
 
(122.2
)
 
(153.0
)
 
(81.4
)
 
(153.0
)
 
DAC balance, end of period
 
$
490.8

 
$
385.6

 
$
395.1

 
$
364.9

 
$
311.2

 
$
490.8

 
$
311.2

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Benefits Division
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Unamortized balance, beginning of period
 
$
3.5

 
$
2.0

 
$
1.7

 
$
1.3

 
$
1.5

 
$
2.0

 
$
—

 
 
Deferral of acquisition costs:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Other acquisition expenses
 
0.5

 
1.9

 
0.6

 
0.5

 
—

 
2.4

 
1.6

 
 
Total deferral of acquisition costs
 
0.5

 
1.9

 
0.6

 
0.5

 
—

 
2.4

 
1.6

 
 
Amortization
 
(0.4
)
 
(0.4
)
 
(0.3
)
 
(0.1
)
 
(0.2
)
 
(0.8
)
 
(0.3
)
 
 
Unamortized balance, end of period
 
3.6

 
3.5

 
2.0

 
1.7

 
1.3

 
3.6

 
1.3

 
DAC balance, end of period
 
$
3.6

 
$
3.5

 
$
2.0

 
$
1.7

 
$
1.3

 
$
3.6

 
$
1.3

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Retirement Division - Deferred Annuities
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Unamortized balance, beginning of period
 
$
337.6

 
$
325.5

 
$
316.0

 
$
305.8

 
$
295.5

 
$
325.5

 
$
285.9

 
 
Deferral of acquisition costs:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Commissions and premium-based taxes and fees
 
32.7

 
23.8

 
23.6

 
26.3

 
23.8

 
56.5

 
47.0

 
 
 
Other acquisition expenses
 
3.0

 
2.5

 
2.5

 
2.5

 
1.6

 
5.5

 
3.8

 
 
Total deferral of acquisition costs
 
35.7

 
26.3

 
26.1

 
28.8

 
25.4

 
62.0

 
50.8

 
 
Adjustments related to realized (gains) losses
 
(3.2
)
 
3.0

 
3.6

 
(3.0
)
 
(0.4
)
 
(0.2
)
 
0.7

 
 
 
Amortization
 
(17.4
)
 
(16.4
)
 
(15.6
)
 
(14.0
)
 
(14.0
)
 
(33.8
)
 
(26.6
)
 
 
 
Amortization related to prepayments
 
(1.8
)
 
(0.8
)
 
(4.6
)
 
(1.0
)
 
(0.7
)
 
(2.6
)
 
(5.0
)
 
 
 
Unlocking
 
—

 
—

 
—

 
(0.6
)
 
—

 
—

 
—

 
 
Total amortization
 
(19.2
)
 
(17.2
)
 
(20.2
)
 
(15.6
)
 
(14.7
)
 
(36.4
)
 
(31.6
)
 
 
Unamortized balance, end of period
 
350.9

 
337.6

 
325.5

 
316.0

 
305.8

 
350.9

 
305.8

 
 
Accum effect of net unrealized gains
 
(75.3
)
 
(145.1
)
 
(109.6
)
 
(112.8
)
 
(143.0
)
 
(75.3
)
 
(143.0
)
 
DAC balance, end of period
 
$
275.6

 
$
192.5

 
$
215.9

 
$
203.2

 
$
162.8

 
$
275.6

 
$
162.8

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Retirement Division - Income Annuities
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Unamortized balance, beginning of period
 
$
59.3

 
$
58.0

 
$
56.0

 
$
54.6

 
$
52.1

 
$
58.0

 
$
49.2

 
 
Deferral of acquisition costs:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Commissions and premium-based taxes and fees
 
3.0

 
2.7

 
3.1

 
2.4

 
3.5

 
5.7

 
7.2

 
 
 
Other acquisition expenses
 
0.2

 
0.2

 
0.2

 
0.3

 
0.1

 
0.4

 
0.3

 
 
Total deferral of acquisition costs
 
3.2

 
2.9

 
3.3

 
2.7

 
3.6

 
6.1

 
7.5

 
 
Amortization
 
(1.5
)
 
(1.6
)
 
(1.3
)
 
(1.3
)
 
(1.1
)
 
(3.1
)
 
(2.1
)
 
 
Unamortized balance, end of period
 
61.0

 
59.3

 
58.0

 
56.0

 
54.6

 
61.0

 
54.6

 
DAC balance, end of period
 
$
61.0

 
$
59.3

 
$
58.0

 
$
56.0

 
$
54.6

 
$
61.0

 
$
54.6

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Individual Life Division
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Unamortized balance, beginning of period
 
$
141.3

 
$
128.4

 
$
113.4

 
$
102.5

 
$
92.2

 
$
128.4

 
$
84.8

 
 
Deferral of acquisition costs:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Commissions and premium-based taxes and fees
 
14.8

 
13.2

 
13.8

 
9.2

 
10.1

 
28.0

 
18.0

 
 
 
Other acquisition expenses
 
2.2

 
2.1

 
3.4

 
2.3

 
1.4

 
4.3

 
2.8

 
 
Total deferral of acquisition costs
 
17.0

 
15.3

 
17.2

 
11.5

 
11.5

 
32.3

 
20.8

 
 
Adjustments related to realized (gains) losses
 
—

 
—

 
—

 
—

 
(0.6
)
 
—

 
(0.6
)
 
 
 
Amortization
 
(1.5
)
 
(2.3
)
 
(2.1
)
 
(0.9
)
 
(0.6
)
 
(3.8
)
 
(2.4
)
 
 
 
Amortization related to prepayments
 
(0.1
)
 
(0.1
)
 
(0.1
)
 
(0.1
)
 
—

 
(0.2
)
 
(0.1
)
 
 
 
Unlocking
 
—

 
—

 
—

 
0.4

 
—

 
—

 
—

 
 
Total amortization
 
(1.6
)
 
(2.4
)
 
(2.2
)
 
(0.6
)
 
(0.6
)
 
(4.0
)
 
(2.5
)
 
 
Unamortized balance, end of period
 
156.7

 
141.3

 
128.4

 
113.4

 
102.5

 
156.7

 
102.5

 
 
Accum effect of net unrealized gains
 
(6.1
)
 
(11.0
)
 
(9.2
)
 
(9.4
)
 
(10.0
)
 
(6.1
)
 
(10.0
)
 
DAC balance, end of period
 
$
150.6

 
$
130.3

 
$
119.2

 
$
104.0

 
$
92.5

 
$
150.6

 
$
92.5


10



Symetra Financial Corporation
2Q 2015 Financial Supplement
Deferred Sales Inducements (DSI) Roll Forward
(In millions) 

 
 
 
 
 
For the Three Months Ended
 
For the Six Months Ended
 
 
 
 
 
Jun 30,
2015
 
Mar 31,
2015
 
Dec 31,
2014
 
Sep 30,
2014
 
Jun 30,
2014
 
Jun 30,
2015
 
Jun 30,
2014
 
 
 
 
 
 
 
 
 
 
 
Total Company
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Unamortized balance, beginning of period
 
$
132.3

 
$
136.7

 
$
144.0

 
$
146.5

 
$
150.3

 
$
136.7

 
$
154.8

 
 
Capitalizations
 
5.3

 
6.5

 
7.0

 
7.2

 
7.6

 
11.8

 
17.2

 
 
Adjustments related to realized (gains) losses
 
0.3

 
0.2

 
0.5

 
0.2

 
(0.2
)
 
0.5

 
0.1

 
 
 
Amortization
 
(10.6
)
 
(10.4
)
 
(10.9
)
 
(10.0
)
 
(10.5
)
 
(21.0
)
 
(21.1
)
 
 
 
Amortization related to prepayments
 
(1.0
)
 
(0.7
)
 
(3.9
)
 
(0.9
)
 
(0.7
)
 
(1.7
)
 
(4.5
)
 
 
 
Unlocking
 
—

 
—

 
—

 
1.0

 
—

 
—

 
—

 
 
Total amortization
 
(11.6
)
 
(11.1
)
 
(14.8
)
 
(9.9
)
 
(11.2
)
 
(22.7
)
 
(25.6
)
 
 
Unamortized balance, end of period
 
126.3

 
132.3

 
136.7

 
144.0

 
146.5

 
126.3

 
146.5

 
 
Accum effect of net unrealized gains
 
(61.7
)
 
(88.0
)
 
(79.6
)
 
(85.4
)
 
(99.9
)
 
(61.7
)
 
(99.9
)
 
DSI balance, end of period 1
 
$
64.6

 
$
44.3

 
$
57.1

 
$
58.6

 
$
46.6

 
$
64.6

 
$
46.6

1
DSI balance is included in receivables and other assets on the consolidated balance sheet.



11



Symetra Financial Corporation
2Q 2015 Financial Supplement
Account Values and Reserves Roll Forwards
(In millions)
 
 
 
 
 
 
 
 
For the Three Months Ended
 
For the Six Months Ended
 
 
 
 
 
 
 
Jun 30,
2015
 
Mar 31,
2015
 
Dec 31,
2014
 
Sep 30,
2014
 
Jun 30,
2014
 
Jun 30,
2015
 
Jun 30,
2014
Retirement Division:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Deferred Annuities:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Fixed Account Values, excluding FIA
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Account values, beginning of period
 
$
11,117.8

 
$
11,064.9

 
$
11,074.0

 
$
10,992.8

 
$
10,951.2

 
$
11,064.9

 
$
10,874.7

 
 
 
 
Deposits
 
342.5

 
269.6

 
254.5

 
313.2

 
287.9

 
612.1

 
568.5

 
 
 
 
Withdrawals
 
(328.6
)
 
(293.2
)
 
(335.0
)
 
(306.4
)
 
(306.7
)
 
(621.8
)
 
(592.8
)
 
 
 
 
Net transfers
 
—

 
(0.4
)
 
(1.4
)
 
0.9

 
1.9

 
(0.4
)
 
0.3

 
 
 
 
 
Net flows
 
13.9

 
(24.0
)
 
(81.9
)
 
7.7

 
(16.9
)
 
(10.1
)
 
(24.0
)
 
 
 
 
Interest credited
 
66.8

 
67.4

 
70.0

 
71.0

 
71.2

 
134.2

 
144.6

 
 
 
 
Other
 
(3.5
)
 
9.5

 
2.8

 
2.5

 
(12.7
)
 
6.0

 
(2.5
)
 
 
 
Account values, end of period
 
$
11,195.0

 
$
11,117.8

 
$
11,064.9

 
$
11,074.0

 
$
10,992.8

 
$
11,195.0

 
$
10,992.8

 
 
Fixed Account Values, FIA
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Account values, beginning of period
 
$
3,730.3

 
$
3,313.8

 
$
2,907.2

 
$
2,463.3

 
$
2,084.4

 
$
3,313.8

 
$
1,712.0

 
 
 
 
Deposits
 
607.3

 
400.5

 
396.6

 
452.4

 
375.7

 
1,007.8

 
735.3

 
 
 
 
Withdrawals
 
(33.0
)
 
(23.7
)
 
(22.5
)
 
(19.3
)
 
(15.7
)
 
(56.7
)
 
(26.5
)
 
 
 
 
Net transfers
 
(0.7
)
 
(0.9
)
 
0.9

 
0.5

 
0.4

 
(1.6
)
 
1.6

 
 
 
 
 
Net flows
 
573.6

 
375.9

 
375.0

 
433.6

 
360.4

 
949.5

 
710.4

 
 
 
 
Interest credited
 
27.8

 
25.3

 
23.6

 
21.5

 
14.1

 
53.1

 
23.3

 
 
 
 
Other
 
(12.8
)
 
15.3

 
8.0

 
(11.2
)
 
4.4

 
2.5

 
17.6

 
 
 
Account values, end of period
 
$
4,318.9

 
$
3,730.3

 
$
3,313.8

 
$
2,907.2

 
$
2,463.3

 
$
4,318.9

 
$
2,463.3

 
Income Annuities:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Reserves
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Reserves, beginning of period
 
$
6,484.2

 
$
6,487.7

 
$
6,494.8

 
$
6,516.6

 
$
6,509.9

 
$
6,487.7

 
$
6,489.9

 
 
 
 
Deposits
 
74.6

 
59.7

 
76.6

 
58.8

 
88.2

 
134.3

 
170.4

 
 
 
 
Benefit payments
 
(172.7
)
 
(147.4
)
 
(168.4
)
 
(173.0
)
 
(162.0
)
 
(320.1
)
 
(307.3
)
 
 
 
 
 
Net flows
 
(98.1
)
 
(87.7
)
 
(91.8
)
 
(114.2
)
 
(73.8
)
 
(185.8
)
 
(136.9
)
 
 
 
 
Interest credited
 
89.9

 
90.6

 
90.7

 
91.1

 
91.6

 
180.5

 
183.5

 
 
 
 
Other
 
(2.0
)
 
(6.4
)
 
(6.0
)
 
1.3

 
(11.1
)
 
(8.4
)
 
(19.9
)
 
 
 
Reserves, end of period
 
$
6,474.0

 
$
6,484.2

 
$
6,487.7

 
$
6,494.8

 
$
6,516.6

 
$
6,474.0

 
$
6,516.6

 
Individual Life Division:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
BOLI Account Values
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Account values, beginning of period
 
$
4,931.7

 
$
4,902.4

 
$
4,868.1

 
$
4,834.2

 
$
4,834.6

 
$
4,902.4

 
$
4,798.1

 
 
 
 
Deposits
 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
 
 
 
Surrenders/claims
 
(5.4
)
 
(6.6
)
 
(4.8
)
 
(5.5
)
 
(38.8
)
 
(12.0
)
 
(42.5
)
 
 
 
 
 
Net flows
 
(5.4
)
 
(6.6
)
 
(4.8
)
 
(5.5
)
 
(38.8
)
 
(12.0
)
 
(42.5
)
 
 
 
 
Interest credited
 
54.5

 
53.1

 
55.8

 
55.8

 
55.3

 
107.6

 
111.7

 
 
 
 
Administrative charges and other
 
(17.3
)
 
(17.2
)
 
(16.7
)
 
(16.4
)
 
(16.9
)
 
(34.5
)
 
(33.1
)
 
 
 
Account values, end of period
 
$
4,963.5

 
$
4,931.7

 
$
4,902.4

 
$
4,868.1

 
$
4,834.2

 
$
4,963.5

 
$
4,834.2

 
 
UL Account Values
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Account values, beginning of period
 
$
790.7

 
$
768.2

 
$
753.4

 
$
741.5

 
$
734.1

 
$
768.2

 
$
726.2

 
 
 
 
Deposits
 
51.4

 
47.3

 
36.8

 
32.8

 
28.4

 
98.7

 
52.7

 
 
 
 
Surrenders/claims
 
(9.3
)
 
(10.8
)
 
(5.9
)
 
(7.2
)
 
(10.5
)
 
(20.1
)
 
(18.1
)
 
 
 
 
 
Net flows
 
42.1

 
36.5

 
30.9

 
25.6

 
17.9

 
78.6

 
34.6

 
 
 
 
Interest credited
 
8.7

 
8.4

 
8.4

 
8.2

 
7.8

 
17.1

 
15.6

 
 
 
 
Administrative charges and other
 
(23.9
)
 
(22.4
)
 
(24.5
)
 
(21.9
)
 
(18.3
)
 
(46.3
)
 
(34.9
)
 
 
 
Account values, end of period
 
$
817.6

 
$
790.7

 
$
768.2

 
$
753.4

 
$
741.5

 
$
817.6

 
$
741.5



12



Symetra Financial Corporation
2Q 2015 Financial Supplement
Overview of Liabilities and Associated Unrealized Gains
(In millions, except percentage data)
 
 
 
 
 
As of Jun 30, 2015
 
 
 
 
Policyholder Liability
 
% of Total
 
Unrealized gains 8
Illiquid: cannot be surrendered
 
 
 
 
 
 
Structured settlements & other single premium immediate annuities 1
 
$
6,515.0

 
23.1
%
 
$
593.9

 
 
 
 
 
 
 
 
 
Somewhat Liquid: can be surrendered with adjustments or charges of 3% or more
 
 
 
 
 
 
Deferred Annuities:
 
 
 
 
 
 
 
Surrender charges of 5% or higher
 
6,320.6

 
 
 
141.7

 
Surrender charges of 3 to 5%
 
476.8

 
 
 
10.7

 
MVA and surrender charges of 5% or higher 2
 
3,721.8

 
 
 
83.4

 
5 year payout provision or MVA 3
 
455.3

 
 
 
10.2

BOLI 4
 
5,064.7

 
 
 
228.5

Universal life
 
350.2

 
 
 
12.1

 
Total somewhat liquid
 
16,389.4

 
58.2
%
 
486.6

 
 
 
 
 
 
 
 
 
Liquid: can be surrendered with no adjustment or charges of less than 3%
 
 
 
 
 
 
Deferred Annuities:
 
 
 
 
 
 
 
No surrender charges 5
 
3,257.0

 
 
 
73.0

 
Surrender charges less than 3%
 
1,167.0

 
 
 
26.2

Universal life
 
485.4

 
 
 
16.6

 
Total liquid
 
4,909.4

 
17.5
%
 
115.8

 
 
 
 
 
 
 
 
 
Other
 
 
 
 
 
 
 
Other (net of reinsurance) 6
 
334.2

 
1.2
%
 
13.1

 
 
 
 
 
 
 
 
 
Assets supporting surplus portfolio
 
 
 
 
 
$
79.4

 
 
 
 
 
 
 
 
 
Total 7
 
$
28,148.0

 
100.0
%
 
$
1,288.8

 
 
 
 
 
 
 
 
 
Reconciliation of unrealized gains to AOCI:
 
 
 
 
 
 
Unrealized gains from above
 
 
 
 
 
$
1,288.8

Taxes on unrealized gains
 
 
 
 
 
(451.0
)
Adjustment for DAC and DSI valuation allowance, net of taxes
 
 
 
 
 
(95.4
)
Other
 
 
 
 
 
9.3

AOCI
 
 
 
 
 
$
751.7


The liabilities presented above have been aggregated based on contractual surrender charge schedules without adjustment for free partial withdrawals and guaranteed return of premium provisions, if applicable. The following footnotes may also be useful in evaluating the withdrawal characteristics of our liabilities:
1

The benefits are specified in the contracts as fixed amounts, primarily to be paid over the next several decades. Certain single premium immediate annuity contracts contain a liquidity feature that permits contract owners to make partial withdrawals once every 36 months within the life expectancy period. The withdrawals are based on prevailing market rates which limits our exposure to liquidity and interest rate risk.
2

The market value adjustment (MVA) adjusts the value of the contract at surrender based on current interest rates, subject to a guaranteed minimum account value specified in the contract.
3

The MVA adjusts the value of the contract at surrender based on current interest rates, subject to a guaranteed minimum account value specified in the contract. In a liquidity crisis situation, we could invoke the five-year payout provision so that the contract value with interest is paid out ratably over five years.
4

The biggest deterrent to surrender is the taxation on the gain within these contracts, which includes a 10% non-deductible penalty tax. Banks can exchange certain of these contracts with other carriers, tax-free. However, a significant portion of this business does not qualify for this tax-free treatment due to the employment status of the original covered employees and charges may be applicable.
5

Given the current interest rate environment, we do not expect significant changes in the persistency of this business.
6

Other represents the sum of the following: (a) our term life insurance policyholder liabilities, net of reinsurance recoverables. There is no surrender value related to these contracts; (b) incurred but not reported claim liabilities mainly related to our medical stop-loss business. The precise timing and amount of payment is unknown; and (c) reported claim liabilities for BOLI, term life insurance, medical stop-loss and group life policies.
7

Represents the sum of funds held under deposit contracts, future policy benefits and policy and contract claims in the consolidated balance sheets, excluding other policyholder related liabilities and reinsurance recoverables of $268.4 as of June 30, 2015.
8

Represents the pre-tax net unrealized gains of the investment portfolio supporting the related policyholder liability.


13



Symetra Financial Corporation
2Q 2015 Financial Supplement
Investments Summary
(In millions, except percentage data)
 
 
 
 
As of
 
 
 
 
Jun 30,
2015
 
%
 
Mar 31,
2015
 
%
 
Dec 31,
2014
 
%
 
Sep 30,
2014
 
%
 
Jun 30,
2014
 
%
Portfolio Composition:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Available-for-sale securities:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Fixed maturities, at fair value
 
$
25,938.4

 
82.5
 %
 
$
26,030.7

 
82.9
%
 
$
25,379.4

 
82.9
 %
 
$
25,316.6

 
83.6
%
 
$
24,849.2

 
83.9
 %
 
Marketable equity securities, at fair value
 
92.4

 
0.3
 %
 
118.3

 
0.4
%
 
120.5

 
0.4
 %
 
122.7

 
0.4
%
 
126.6

 
0.4
 %
Trading securities:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Marketable equity securities, at fair value
 
538.7

 
1.7
 %
 
546.4

 
1.7
%
 
532.0

 
1.7
 %
 
467.9

 
1.5
%
 
483.0

 
1.6
 %
Mortgage loans, net
 
4,431.1

 
14.1
 %
 
4,222.9

 
13.4
%
 
4,130.1

 
13.5
 %
 
3,921.0

 
13.0
%
 
3,747.8

 
12.6
 %
Policy loans
 
60.0

 
0.2
 %
 
60.8

 
0.2
%
 
61.9

 
0.2
 %
 
61.0

 
0.2
%
 
62.0

 
0.2
 %
Investments in limited partnerships
 
280.1

 
0.9
 %
 
296.1

 
1.0
%
 
309.9

 
1.0
 %
 
307.9

 
1.0
%
 
291.8

 
1.0
 %
Other invested assets
 
102.9

 
0.3
 %
 
137.8

 
0.4
%
 
100.5

 
0.3
 %
 
76.9

 
0.3
%
 
71.8

 
0.3
 %
 
 
Total investments
 
31,443.6

 
100.0
 %
 
31,413.0

 
100.0
%
 
30,634.3

 
100.0
 %
 
30,274.0

 
100.0
%
 
29,632.2

 
100.0
 %
Cash and cash equivalents
 
300.1

 
 
 
231.5

 
 
 
158.8

 
 
 
109.2

 
 
 
118.0

 
 
 
 
Total investments, cash and cash equivalents
 
$
31,743.7

 
 
 
$
31,644.5

 
 
 
$
30,793.1

 
 
 
$
30,383.2

 
 
 
$
29,750.2

 
 
Fixed Maturities Securities by Credit Quality: 1
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
1: AAA, AA, A
 
$
14,353.3

 
55.3
 %
 
$
14,789.9

 
56.8
%
 
$
14,491.2

 
57.1
 %
 
$
14,561.2

 
57.6
%
 
$
14,208.9

 
57.2
 %
2: BBB
 
10,442.2

 
40.3
 %
 
10,002.9

 
38.4
%
 
9,761.6

 
38.5
 %
 
9,527.0

 
37.6
%
 
9,389.2

 
37.8
 %
 
Total investment grade
 
24,795.5

 
95.6
 %
 
24,792.8

 
95.2
%
 
24,252.8

 
95.6
 %
 
24,088.2

 
95.2
%
 
23,598.1

 
95.0
 %
3: BB
 
601.3

 
2.3
 %
 
659.8

 
2.5
%
 
561.5

 
2.2
 %
 
626.4

 
2.5
%
 
643.2

 
2.6
 %
4: B
 
468.3

 
1.8
 %
 
507.6

 
2.0
%
 
492.3

 
1.9
 %
 
517.2

 
2.0
%
 
514.4

 
2.1
 %
5: CCC & lower
 
70.7

 
0.3
 %
 
66.7

 
0.3
%
 
66.9

 
0.3
 %
 
79.9

 
0.3
%
 
91.4

 
0.3
 %
6: In or near default
 
2.6

 
0.0
 %
 
3.8

 
0.0
%
 
5.9

 
0.0
 %
 
4.9

 
0.0
%
 
2.1

 
0.0
 %
 
Total below investment grade
 
1,142.9

 
4.4
 %
 
1,237.9

 
4.8
%
 
1,126.6

 
4.4
 %
 
1,228.4

 
4.8
%
 
1,251.1

 
5.0
 %
 
 
Total fixed maturities
 
$
25,938.4

 
100.0
 %
 
$
26,030.7

 
100.0
%
 
$
25,379.4

 
100.0
 %
 
$
25,316.6

 
100.0
%
 
$
24,849.2

 
100.0
 %
Fixed Maturities by Issuer Type:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
U.S. government and agencies
 
$
390.7

 
1.5
 %
 
$
592.1

 
2.3
%
 
$
409.9

 
1.6
 %
 
$
450.3

 
1.8
%
 
$
372.0

 
1.5
 %
State and political subdivisions
 
886.8

 
3.4
 %
 
845.9

 
3.2
%
 
829.2

 
3.3
 %
 
786.4

 
3.1
%
 
775.6

 
3.1
 %
Foreign governments
 
91.5

 
0.4
 %
 
94.5

 
0.4
%
 
94.9

 
0.4
 %
 
96.0

 
0.4
%
 
98.5

 
0.4
 %
Corporate securities
 
19,922.0

 
76.8
 %
 
19,644.3

 
75.5
%
 
19,192.5

 
75.6
 %
 
18,995.5

 
75.0
%
 
18,764.1

 
75.5
 %
Residential mortgage-backed securities
 
2,720.2

 
10.5
 %
 
2,922.2

 
11.2
%
 
2,921.4

 
11.5
 %
 
2,857.8

 
11.3
%
 
2,857.9

 
11.5
 %
Commercial mortgage-backed securities
 
1,203.3

 
4.6
 %
 
1,307.4

 
5.0
%
 
1,333.9

 
5.3
 %
 
1,401.7

 
5.6
%
 
1,484.5

 
6.0
 %
Collateralized loan obligations
234.3

 
0.9
 %
 
—

 
0.0
%
 
—

 
0.0
 %
 
—

 
0.0
%
 
—

 
0.0
 %
Other debt obligations
489.6

 
1.9
 %
 
624.3

 
2.4
%
 
597.6

 
2.3
 %
 
728.9

 
2.8
%
 
496.6

 
2.0
 %
 
 
Total fixed maturities
 
$
25,938.4

 
100.0
 %
 
$
26,030.7

 
100.0
%
 
$
25,379.4

 
100.0
 %
 
$
25,316.6

 
100.0
%
 
$
24,849.2

 
100.0
 %
Effective Duration
 
5.4

 
 
 
5.5

 
 
 
5.5

 
 
 
5.5

 
 
 
5.5

 
 
Weighted-average Investment Yield
 
4.41
%
 
 

 
4.43
%
 
 

 
4.71
%
 
 
 
4.62
%
 
 
 
4.69
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
For the Three Months Ended
 
 
 
 
Jun 30,
2015
 
%
 
Mar 31,
2015
 
%
 
Dec 31,
2014
 
%
 
Sep 30,
2014
 
%
 
Jun 30,
2014
 
%
Average Daily Cash and Cash Equivalent Balances:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Benefits Division
 
$
11.7

 
5.2
 %
 
$
10.2

 
5.8
%
 
$
15.6

 
10.1
 %
 
$
4.4

 
1.8
%
 
$
5.1

 
4.3
 %
Retirement Division:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Deferred Annuities
 
141.5

 
62.7
 %
 
84.0

 
47.6
%
 
61.8

 
40.1
 %
 
58.0

 
23.2
%
 
82.5

 
69.3
 %
 
Income Annuities
 
(1.8
)
 
(0.8
)%
 
5.0

 
2.8
%
 
(6.7
)
 
(4.3
)%
 
7.1

 
2.9
%
 
97.7

 
82.0
 %
Individual Life Division
 
46.8

 
20.8
 %
 
62.3

 
35.3
%
 
35.0

 
22.7
 %
 
11.0

 
4.4
%
 
24.8

 
20.8
 %
Other
 
27.3

 
12.1
 %
 
15.0

 
8.5
%
 
48.3

 
31.4
 %
 
169.0

 
67.7
%
 
(91.0
)
 
(76.4
)%
 
 
Total
 
$
225.5

 
100.0
 %
 
$
176.5

 
100.0
%
 
$
154.0

 
100.0
 %
 
$
249.5

 
100.0
%
 
$
119.1

 
100.0
 %

1

Credit quality is based on NAIC (National Association of Insurance Commissioners) designation with presentation of the S&P equivalent credit ratings.

14



Symetra Financial Corporation
2Q 2015 Financial Supplement
Investments Income Statement Data
(In millions)
 
 
 
 
For the Three Months Ended
 
For the Six Months Ended
 
 
 
 
Jun 30,
2015
 
Mar 31,
2015
 
Dec 31,
2014
 
Sep 30,
2014
 
Jun 30,
2014
 
Jun 30,
2015
 
Jun 30,
2014
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Prepayment-related income: 1
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Retirement Division - Deferred Annuities
 
$
7.9

 
$
3.2

 
$
21.4

 
$
5.5

 
$
3.3

 
$
11.1

 
$
13.5

 
Retirement Division - Income Annuities
 
1.8

 
0.3

 
3.4

 
0.8

 
0.7

 
2.1

 
2.3

 
Individual Life Division
 
3.7

 
1.8

 
3.5

 
0.9

 
1.3

 
5.5

 
3.2

 
Other
 
—

 
0.9

 
0.5

 
(0.1
)
 
0.4

 
0.9

 
0.2

Total
 
$
13.4

 
$
6.2

 
$
28.8

 
$
7.1

 
$
5.7

 
$
19.6

 
$
19.2

Prepayment-related income, net of DAC and DSI amortization:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Retirement Division - Deferred Annuities
 
$
5.1

 
$
1.7

 
$
12.9

 
$
3.6

 
$
1.9

 
$
6.8

 
$
4.0

 
Retirement Division - Income Annuities
 
1.8

 
0.3

 
3.4

 
0.8

 
0.7

 
2.1

 
2.3

 
Individual Life Division
 
3.6

 
1.7

 
3.4

 
0.8

 
1.3

 
5.3

 
3.1

 
Other
 
—

 
0.9

 
0.5

 
(0.1
)
 
0.4

 
0.9

 
0.2

Total
 
$
10.5

 
$
4.6

 
$
20.2

 
$
5.1

 
$
4.3

 
$
15.1

 
$
9.6

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
For the Three Months Ended
 
For the Six Months Ended
 
 
 
 
Jun 30,
2015
 
Mar 31,
2015
 
Dec 31,
2014
 
Sep 30,
2014
 
Jun 30,
2014
 
Jun 30,
2015
 
Jun 30,
2014
Net Realized Gains (Losses):
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Fixed maturities:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Gross gains on sales
 
$
3.5

 
$
4.4

 
$
6.6

 
$
1.5

 
$
10.8

 
$
7.9

 
$
19.5

 
 
Gross losses on sales
 
(10.2
)
 
(4.5
)
 
(1.1
)
 
(3.3
)
 
(0.6
)
 
(14.7
)
 
(2.4
)
 
 
Other-than-temporary impairments
 
(2.6
)
 
(8.0
)
 
(10.0
)
 
(1.6
)
 
(1.4
)
 
(10.6
)
 
(2.5
)
 
 
Other 2
 
(2.4
)
 
(0.1
)
 
(6.4
)
 
1.4

 
(1.2
)
 
(2.5
)
 
(2.4
)
 
Total fixed maturities
 
(11.7
)
 
(8.2
)
 
(10.9
)
 
(2.0
)
 
7.6

 
(19.9
)
 
12.2

 
 
Marketable equity securities, trading 3
 
(12.4
)
 
8.2

 
26.4

 
(12.0
)
 
21.6

 
(4.2
)
 
41.3

 
Investments in limited partnerships
 
(8.9
)
 
(3.7
)
 
(5.4
)
 
(4.5
)
 
(3.1
)
 
(12.6
)
 
(6.7
)
 
Other 4
 
7.3

 
(5.7
)
 
(3.1
)
 
6.6

 
0.4

 
1.6

 
(1.0
)
 
DAC/DSI adjustment
 
(2.9
)
 
3.2

 
4.2

 
(2.9
)
 
(1.2
)
 
0.3

 
0.2

 
Net realized gains (losses)
 
$
(28.6
)
 
$
(6.2
)
 
$
11.2

 
$
(14.8
)
 
$
25.3

 
$
(34.8
)
 
$
46.0

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
For the Three Months Ended
 
For the Six Months Ended
 
 
 
 
Jun 30,
2015
 
Mar 31,
2015
 
Dec 31,
2014
 
Sep 30,
2014
 
Jun 30,
2014
 
Jun 30,
2015
 
Jun 30,
2014
Tax Credit Investments Impact on Income
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Historical and estimated future impact
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Amortization related to tax credit investments, net of taxes
 
$
(5.3
)
 
$
(4.6
)
 
$
(4.3
)
 
$
(5.2
)
 
$
(4.2
)
 
$
(9.9
)
 
$
(8.5
)
 
 
Realized losses related to tax credit investments, net of taxes
 
(3.2
)
 
(2.4
)
 
(3.6
)
 
(3.0
)
 
(2.0
)
 
(5.6
)
 
(4.3
)
 
 
Tax credits
 
14.6

 
15.6

 
14.8

 
14.2

 
13.9

 
30.2

 
27.8

 
 
Impact to net income
 
$
6.1

 
$
8.6

 
$
6.9

 
$
6.0

 
$
7.7

 
$
14.7

 
$
15.0

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Carrying value of invested asset
 
$
223.1

 
$
230.5

 
$
238.4

 
$
244.6

 
$
249.8

 
$
223.1

 
$
249.8

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Future estimated impact of current holdings on net income:
 
 
 
 
 
 
 
 
 
2015
 
$
19.1

 
 
 
 
 
 
 
 
 
 
 
 
2016
 
15.8

 
 
 
 
 
 
 
 
 
 
 
 
2017 & beyond
 
35.3

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
$
70.2

Historical information
 
For the Years Ended
 
 
2014
 
2013
 
2012
 
2011
 
2010
Amortization related to tax credit investments, net of taxes
 
$
(18.0
)
 
$
(13.3
)
 
$
(13.9
)
 
$
(9.2
)
 
$
(6.3
)
Realized losses related to tax credit investments, net of taxes
 
(10.9
)
 
(4.4
)
 
(2.6
)
 
(2.0
)
 
—

Tax credits
 
56.8

 
41.2

 
33.5

 
17.4

 
10.9

Impact to net income
 
$
27.9

 
$
23.5

 
$
17.0

 
$
6.2

 
$
4.6

1

Prepayment-related income includes make-whole premiums and consent fees on early calls or tenders of fixed maturities, prepayment speed adjustments on structured securities, and prepayment fees on our commercial mortgage loans.
2

Includes net gains (losses) on calls and redemptions, and changes in the fair value of convertible fixed maturities.
3

Marketable equity securities, trading includes net gains (losses) on changes in fair value.
4

Includes net gains (losses) on derivatives not designated for hedge accounting and other instruments.

15



Symetra Financial Corporation
2Q 2015 Financial Supplement
Sales by Segment and Product
(In millions)
 
 
 
 
For the Three Months Ended
 
For the Six Months Ended
 
 
 
Jun 30,
2015
 
Mar 31,
2015
 
Dec 31,
2014
 
Sep 30,
2014
 
Jun 30,
2014
 
Jun 30,
2015
 
Jun 30,
2014
Benefits Division 1
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Medical stop-loss
 
$
16.1

 
$
111.1

 
$
20.7

 
$
27.7

 
$
19.7

 
$
127.2

 
$
65.3

 
Limited benefit medical
 
1.2

 
4.4

 
1.3

 
1.7

 
1.9

 
5.6

 
13.0

 
Group life & disability income
 
2.2

 
21.2

 
11.9

 
5.4

 
4.5

 
23.4

 
19.7

Total Benefits Division
 
$
19.5

 
$
136.7

 
$
33.9

 
$
34.8

 
$
26.1

 
$
156.2

 
$
98.0

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Retirement Division - Deferred Annuities 2
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Fixed annuities
 
$
325.6

 
$
253.4

 
$
242.2

 
$
299.7

 
$
271.9

 
$
579.0

 
$
536.2

 
Fixed indexed annuities
 
604.9

 
398.6

 
395.7

 
455.2

 
373.4

 
1,003.5

 
731.3

 
Variable annuities
 
3.4

 
3.6

 
4.4

 
4.4

 
5.0

 
7.0

 
10.3

Total
 
$
933.9

 
$
655.6

 
$
642.3

 
$
759.3

 
$
650.3

 
$
1,589.5

 
$
1,277.8

Retirement Division - Income Annuities 2
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
SPIA
 
$
78.4

 
$
60.9

 
$
80.0

 
$
62.3

 
$
89.0

 
$
139.3

 
$
176.5

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total Retirement Division
 
$
1,012.3

 
$
716.5

 
$
722.3

 
$
821.6

 
$
739.3

 
$
1,728.8

 
$
1,454.3

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Individual Life Division
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Term life 1
 
$
1.0

 
$
1.0

 
$
0.8

 
$
0.6

 
$
1.0

 
$
2.0

 
$
1.9

 
Universal life 1
 
13.8

 
11.7

 
11.3

 
7.0

 
7.6

 
25.5

 
14.4

 
Single premium life 3
 
0.3

 
0.4

 
0.6

 
0.7

 
0.5

 
0.7

 
0.7

Individual sales
 
15.1

 
13.1

 
12.7

 
8.3

 
9.1

 
28.2

 
17.0

 
COLI 4
 
11.4

 
9.7

 
1.0

 
—

 
—

 
21.1

 
—

Institutional markets
 
$
11.4

 
$
9.7

 
$
1.0

 
$
—

 
$
—

 
$
21.1

 
$
—


1

Represents annualized first-year premiums net of first year policy lapses.
2

Represents deposits for new policies net of first year policy lapses and/or surrenders.
3

Represents 10% of new deposits net of first year policy lapses and/or surrenders.
4

Represents deposits for new policies.



16




Symetra Financial Corporation
2Q 2015 Financial Supplement
Book Value, Adjusted Book Value and Statutory Book Value per Share
(In millions, except per share amounts)
 
 
 
 
 
As of
 
 
 
 
Jun 30,
2015
 
Mar 31,
2015
 
Dec 31,
2014
 
Sep 30,
2014
 
Jun 30,
2014
Book value per common share 1
$
27.30

 
$
30.58

 
$
29.02

 
$
29.12

 
$
29.58

 
 
 
 
 
 
 
 
 
 
 
 
 
Non-GAAP Financial Measures:
 
 
 
 
 
 
 
 
 
 
 Adjusted book value per common share 2
$
20.83

 
$
20.65

 
$
20.47

 
$
21.26

 
$
21.04

 
 Statutory book value per common share 3
$
20.44

 
$
20.58

 
$
20.53

 
$
19.55

 
$
19.47

 
 
 
 
 
 
 
 
 
 
 
 
 
Numerator:
 
 
 
 
 
 
 
 
 
Total stockholders' equity
$
3,170.2

 
$
3,550.7

 
$
3,360.6

 
$
3,375.3

 
$
3,428.6

AOCI
751.7

 
1,152.8

 
990.6

 
911.1

 
990.6

Adjusted book value
$
2,418.5

 
$
2,397.9

 
$
2,370.0

 
$
2,464.2

 
$
2,438.0

 
 
 
 
 
 
 
 
 
 
 
 
 
Total stockholders' equity
$
3,170.2

 
$
3,550.7

 
$
3,360.6

 
$
3,375.3

 
$
3,428.6

Stockholders' equity of non-insurance entities
(488.2
)
 
(474.8
)
 
(469.5
)
 
(609.1
)
 
(360.0
)
Statutory and other adjustments
(611.9
)
 
(990.5
)
 
(812.8
)
 
(815.0
)
 
(1,123.9
)
Asset valuation reserve (AVR)
303.4

 
304.5

 
299.2

 
315.4

 
312.3

Statutory book value 4
$
2,373.5

 
$
2,389.9

 
$
2,377.5

 
$
2,266.6

 
$
2,257.0

 
 
 
 
 
 
 
 
 
 
 
 
 
Denominator:
 
 
 
 
 
 
 
 
 
Common shares outstanding
116.134

 
116.114

 
115.797

 
115.913

 
115.895

 
 
 
 
For the Three Months Ended
 
 
 
 
Jun 30,
2015
 
Mar 31,
2015
 
Dec 31,
2014
 
Sep 30,
2014
 
Jun 30,
2014
Share repurchases:
 
 
 
 
 
 
 
 
 
 
Shares purchased as part of publicly announced plans or programs 5
—

 
—

 
—

 
—

 
0.749

 
Other shares repurchased 6
—

 
—

 
0.137

 
—

 
0.001

 
Total shares repurchased
—

 
—

 
0.137

 
—

 
0.750

 
 Average price paid per share
$
—

 
$
—

 
$
23.05

 
$
—

 
$
19.66

 
Total cost of share repurchases
$
—

 
$
—

 
$
3.1

 
$
—

 
$
14.7

 
 
 
 
As of
 
 
 
 
Jun 30,
2015
 
Mar 31,
2015
 
Dec 31,
2014
 
Sep 30,
2014
 
Jun 30,
2014
Tangible book value:
 
 
 
 
 
 
 
 
 
 
Total stockholders' equity
$
3,170.2

 
$
3,550.7

 
$
3,360.6

 
$
3,375.3

 
$
3,428.6

 
 
Less:
 
 
 
 
 
 
 
 
 
 
 
 
Deferred policy acquisition costs
490.8

 
385.6

 
395.1

 
364.9

 
311.2

 
 
 
Goodwill and other
115.8

 
96.5

 
108.9

 
111.2

 
99.4

 
Tangible book value 7
$
2,563.6

 
$
3,068.6

 
$
2,856.6

 
$
2,899.2

 
$
3,018.0


1

Book value per common share is calculated as stockholders’ equity divided by common shares outstanding.
2

Adjusted book value per common share is calculated as adjusted book value divided by common shares outstanding.
3

Statutory book value per common share is calculated based on statutory book value divided by common shares outstanding.
4

June 30, 2015 statutory book value is an estimate.
5

As of June 30, 2015, 6.947 shares remained available under the current repurchase authorization.
6

Shares repurchased to satisfy employee income tax withholding on vesting of restricted stock.
7

Tangible book value is a non-GAAP financial measure calculated as stockholders’ equity excluding deferred policy acquisition costs, goodwill, intangible assets and certain other non-tangible assets. Stockholders’ equity is the most directly comparable GAAP measure to tangible book value.


17



Symetra Financial Corporation
2Q 2015 Financial Supplement
ROE and Operating ROAE
(In millions, except percentage data)
 
 
 
 
Twelve Months Ended
 
 
 
Jun 30,
2015
 
Mar 31,
2015
 
Dec 31,
2014
 
Sep 30,
2014
 
Jun 30,
2014
ROE:
 
 
 
 
 
 
 
 
 
 
Net income for the twelve months ended 1
 
$
173.6

 
$
213.9

 
$
254.4

 
$
251.2

 
$
260.5

Average stockholders' equity 2
 
3,377.1

 
3,382.1

 
3,260.3

 
3,190.8

 
3,123.7

ROE
 
5.1
%
 
6.3
%
 
7.8
%
 
7.9
%
 
8.3
%
 
 
 
 
 
 
 
 
 
 
 
 
Operating ROAE:
 
 
 
 
 
 
 
 
 
 
Adjusted operating income for the twelve months ended 1
 
$
198.5

 
$
204.2

 
$
227.2

 
$
216.5

 
$
219.8

Average adjusted book value 3
 
2,417.7

 
2,412.2

 
2,402.3

 
2,387.1

 
2,345.7

Operating ROAE
 
8.2
%
 
8.5
%
 
9.5
%
 
9.1
%
 
9.4
%

Calculation of average stockholders' equity:
The following data can be used to recalculate the average stockholders' equity and average adjusted book value amounts used in the calculation of ROE and operating ROAE.
 
 
 
As of
 
 
2015
 
2014
 
2013
Stockholders' Equity
 
 
 
 
 
 
 
Dec 31
$
—

 
$
3,360.6

 
$
2,941.9

 
Sep 30
—

 
3,375.3

 
3,012.8

 
Jun 30
3,170.2

 
3,428.6

 
3,040.1

 
Mar 31
3,550.7

 
3,195.3

 
3,604.2

AOCI
 
 
 
 
 
 
 
Dec 31
$
—

 
$
990.6

 
$
593.6

 
Sep 30
—

 
911.1

 
719.0

 
Jun 30
751.7

 
990.6

 
782.6

 
Mar 31
1,152.8

 
804.3

 
1,293.1

Reconciliation of adjusted operating income:
The following data together with other data found throughout the supplement can be used to recalculate adjusted operating income for the twelve months ended December 31, 2014, September 30, 2014 and June 30, 2014.
 
 
 
 
Three Months Ended
 
 
 
Mar 31,
2014
 
Dec 31,
2013
 
Sep 30,
2013
Net income
 
$
79.3

 
$
64.4

 
$
45.3

 
Less: Excluded realized gains (losses) (net of taxes)
 
13.6

 
14.4

 
(3.5
)
Adjusted operating income
 
$
65.7

 
$
50.0

 
$
48.8



1

The twelve months ended information is derived by adding the four most recent quarters of net income or adjusted operating income.
2

Average stockholders’ equity is derived by averaging ending stockholders' equity for the most recent five quarters.
3

Average adjusted book value is derived by averaging ending stockholders' equity less AOCI, for the most recent five quarters.


18