Segment and Other Operating Information

12 Months Ended

Dec. 31, 2022

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 a separate segment given their 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)
2022:
Selected Balance Sheet Items:
Deferred transaction costs	$	233,460	270,035	584,158	161,354	—	1,249,007
Total segment assets	1,737,992		958,699	8,521,636	1,008,004	335,343	12,561,674
Future policy benefits	1,533,155		678,103	6,409,784	797,292	—	9,418,334
Other policyholder liabilities	25,596		15,560	118,615	15,318	—	175,089
Funds withheld liability	—		—	1,333,036	—	—	1,333,036
Condensed Income Statements:
Premiums and contract revenues	$	59,379	76,115	15,353	76,033	—	226,880
Net investment income	17,671		1,681	229,324	29,198	21,766	299,640
Other revenues	93		71	6,777	11,539	7,042	25,522
Total revenues	77,143		77,867	251,454	116,770	28,808	552,042
Life and other policy benefits	25,090		20,777	48,029	65,574	—	159,470
Amortization of deferred transaction costs	18,968		19,643	73,926	8,861	—	121,398
Universal life and annuity contract interest	758		(3,840)	18,760	—	—	15,678
Other operating expenses	31,046		20,146	58,799	19,579	6,247	135,817
Federal income taxes	251		4,139	10,169	4,580	4,417	23,556
Total expenses	76,113		60,865	209,683	98,594	10,664	455,919
Segment earnings	$	1,030	17,002	41,771	18,176	18,144	96,123

	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

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

	Years Ended December 31,
	2022		2021	2020
	(In thousands)
Premiums and Other Revenues:
Premiums and contract revenues	$	226,880	224,297	237,947
Net investment income	299,640		562,530	417,202
Other revenues	25,522		22,314	18,522
Realized gains on investments	6,355		14,950	21,071
Total consolidated premiums and other revenues	$	558,397	824,091	694,742

	Years Ended December 31,
	2022		2021	2020
	(In thousands)
Federal Income Taxes:
Total segment Federal income taxes	$	23,556	43,436	15,331
Taxes on realized gains on investments	1,334		3,140	4,425
Total consolidated Federal income taxes	$	24,890	46,576	19,756

	Years Ended December 31,
	2022		2021	2020
	(In thousands)
Net Earnings:
Total segment earnings	$	96,123	168,871	75,666
Realized gains on investments, net of taxes	5,021		11,810	16,646
Total consolidated net earnings	$	101,144	180,681	92,312

	December 31,
	2022		2021	2020
	(In thousands)
Assets:
Total segment assets	$	12,561,674	13,426,665	13,753,320
Other unallocated assets	538,553		903,524	894,950
Total consolidated assets	$	13,100,227	14,330,189	14,648,270

(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,
	2022		2021	2020
	(In thousands)
United States	$	163,733	156,614	165,217
Brazil	21,043		20,535	22,190
Taiwan	11,566		10,954	11,433
Peru	8,543		8,635	9,167
Venezuela	8,090		8,560	9,949
Haiti	7,519		4,453	4,708
Other foreign countries	32,866		39,382	38,969
Revenues, excluding reinsurance premiums	253,360		249,133	261,633
Reinsurance premiums	(26,480)		(24,836)	(23,686)
Total premiums and contract revenues	$	226,880	224,297	237,947

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 one top agency accounted for approximately 13% of annuity sales in 2022. In 2022, one domestic independent marketing agency exceeded 10% of total Domestic Life sales accounting for 54%. Ozark National did not have a single distributor accounting for 10% or more of its sales in 2022.