Segment and Other Operating Information

12 Months Ended

Dec. 31, 2021

Segment Reporting [Abstract]

Segment and Other Operating Information

SEGMENT AND OTHER OPERATING INFORMATION

(A)  Operating Segment Information

The Company defines its reportable operating segments as domestic life insurance, international life insurance, annuities, and ONL and Affiliates (previously referred to as "Acquired Businesses"). These segments are organized based on product types, geographic marketing areas, and business groupings. Ozark National and NIS have been combined into the segment given its inter-related marketing and sales approach which consists of a coordinated sale of a non-participating whole life insurance product (Ozark National) and a mutual fund investment product (NIS). A fifth category "All Others" primarily includes investments and earnings of non-operating subsidiaries as well as other remaining investments and assets not otherwise supporting specific segment operations. In accordance with GAAP guidance for segment reporting, the Company excludes or segregates realized investment gains and losses.

A summary of segment information is provided below.

	Domestic Life Insurance		International Life Insurance	Annuities	ONL & Affiliates	All Others	Totals
	(In thousands)
2021:
Selected Balance Sheet Items:
Deferred transaction costs	$	150,688	152,340	423,318	165,814	—	892,160
Total segment assets	1,791,017		975,942	9,187,610	1,115,380	356,716	13,426,665
Future policy benefits	1,537,482		749,537	6,843,457	782,511	—	9,912,987
Other policyholder liabilities	20,950		14,268	82,650	16,470	—	134,338
Funds withheld liability	—		—	1,485,267	—	—	1,485,267
Condensed Income Statements:
Premiums and contract revenues	$	51,294	79,085	16,809	77,109	—	224,297
Net investment income	90,006		52,227	368,234	26,989	25,074	562,530
Other revenues	105		95	5,374	12,654	4,086	22,314
Total revenues	141,405		131,407	390,417	116,752	29,160	809,141
Life and other policy benefits	24,416		26,481	67,515	69,165	—	187,577
Amortization of deferred transaction costs	9,580		(11,118)	61,881	9,118	—	69,461
Universal life and annuity contract interest	77,246		31,696	104,242	—	—	213,184
Other operating expenses	26,959		19,679	53,817	20,244	5,913	126,612
Federal income taxes	656		13,249	21,094	3,675	4,762	43,436
Total expenses	138,857		79,987	308,549	102,202	10,675	640,270
Segment earnings	$	2,548	51,420	81,868	14,550	18,485	168,871

	Domestic Life Insurance		International Life Insurance	Annuities	ONL & Affiliates	All Others	Totals
	(In thousands)
2020:
Selected Balance Sheet Items:
Deferred transaction costs	$	94,100	124,480	302,397	170,756	—	691,733
Total segment assets	3,242,794		1,034,280	7,976,588	1,117,509	382,149	13,753,320
Future policy benefits	1,337,174		798,952	7,028,860	768,433	—	9,933,419
Other policyholder liabilities	16,378		11,086	94,049	16,967	—	138,480
Funds withheld liability	—		—	1,697,591	—	—	1,697,591
Condensed Income Statements:
Premiums and contract revenues	$	53,834	88,167	17,025	78,921	—	237,947
Net investment income	54,516		27,273	290,576	26,383	18,454	417,202
Other revenues	58		67	43	10,118	8,236	18,522
Total revenues	108,408		115,507	307,644	115,422	26,690	673,671
Life and other policy benefits	18,471		14,084	31,043	67,739	—	131,337
Amortization of deferred transaction costs	17,661		24,929	87,133	10,780	—	140,503
Universal life and annuity contract interest	44,782		(2,087)	163,555	—	—	206,250
Other operating expenses	25,730		17,829	36,870	18,454	5,701	104,584
Federal income taxes (benefit)	265		9,143	(1,649)	4,413	3,159	15,331
Total expenses	106,909		63,898	316,952	101,386	8,860	598,005
Segment earnings (loss)	$	1,499	51,609	(9,308)	14,036	17,830	75,666

 

	Domestic Life Insurance		International Life Insurance	Annuities	ONL & Affiliates	All Others	Totals
	(In thousands)
2019:
Selected Balance Sheet Items:
Deferred transaction costs	$	127,557	209,858	486,553	142,434	—	966,402
Total segment assets	1,399,818		1,153,105	8,198,730	978,243	362,900	12,092,796
Future policy benefits (1)	1,198,103		870,461	7,366,894	706,513	—	10,141,971
Other policyholder liabilities	18,016		14,903	80,002	14,686	—	127,607
Condensed Income Statements:
Premiums and contract revenues	$	45,709	99,417	20,317	74,526	—	239,969
Net investment income	77,672		47,004	380,357	22,593	27,866	555,492
Other revenues	313		86	(34)	8,445	8,676	17,486
Total revenues	123,694		146,507	400,640	105,564	36,542	812,947
Life and other policy benefits	18,948		17,064	41,487	59,843	—	137,342
Amortization of deferred transaction costs	11,797		17,593	79,064	8,348	—	116,802
Universal life and annuity contract interest	69,849		48,561	176,920	—	—	295,330
Other operating expenses	20,376		19,447	35,699	17,056	11,980	104,558
Federal income taxes	561		9,024	13,888	3,700	5,056	32,229
Total expenses	121,531		111,689	347,058	88,947	17,036	686,261
Segment earnings	$	2,163	34,818	53,582	16,617	19,506	126,686

(1) Revised for an adjustment to reserve liabilities of $15.0 million. Refer to Note (1).

Reconciliations of segment information to the Company's Consolidated Financial Statements are provided below.

	Years Ended December 31,
	2021		2020	2019
	(In thousands)
Premiums and Other Revenue:
Premiums and contract revenues	$	224,297	237,947	239,969
Net investment income	562,530		417,202	555,492
Other revenues	22,314		18,522	17,486
Realized gains on investments	14,950		21,071	6,241
Total consolidated premiums and other revenue	$	824,091	694,742	819,188

	Years Ended December 31,
	2021		2020	2019
	(In thousands)
Federal Income Taxes:
Total segment Federal income taxes	$	43,436	15,331	32,229
Taxes on realized gains on investments	3,140		4,425	1,311
Total consolidated Federal income taxes	$	46,576	19,756	33,540

	Years Ended December 31,
	2021		2020	2019
	(In thousands)
Net Earnings:
Total segment earnings	$	168,871	75,666	126,686
Realized gains on investments, net of taxes	11,810		16,646	4,930
Total consolidated net earnings	$	180,681	92,312	131,616

	December 31,
	2021		2020	2019
	(In thousands)
Assets:
Total segment assets	$	13,426,665	13,753,320	12,092,796
Other unallocated assets	903,524		894,950	460,651
Total consolidated assets	$	14,330,189	14,648,270	12,553,447

(B)  Geographic Information

A portion of the Company's premiums and contract revenues are from international policies with residents of countries other than the United States. Premiums and contract revenues detailed by country are provided below.

	Years Ended December 31,
	2021		2020	2019
	(In thousands)
United States	$	156,614	165,233	156,330
Brazil	20,535		22,190	24,975
Taiwan	10,954		11,433	12,054
Peru	8,635		9,167	10,127
Venezuela	8,560		9,949	11,763
Colombia	6,505		7,313	8,110
Other foreign countries	37,330		36,348	40,229
Revenues, excluding reinsurance premiums	249,133		261,633	263,588
Reinsurance premiums	(24,836)		(23,686)	(23,619)
Total premiums and contract revenues	$	224,297	237,947	239,969

Premiums and contract revenues are attributed to countries based on the location of the policyholder. All premiums from international policies are renewal premiums. The Company has no significant assets, other than certain limited financial instruments, located in countries other than the United States.

(C)  Major Agency Relationships

A portion exceeding 10% of National Western's annual annuity sales has been sold through one or more of its top independent marketing agencies in recent years. Business from three top agencies accounted for approximately 11%, 11%, and 10%, respectively, of annuity sales in 2021. In 2021, one domestic independent marketing agency exceeded 10% of total Domestic Life sales accounting for 58%. Ozark National did not have a single distributor accounting for 10% or more of its sales in 2021.