Profile: American National Insurance Co (ANAT.O)
6 Dec 2013
American National Insurance Company is engaged in life insurance, annuities and property and casualty insurance. The Company also offers pension services and limited health insurance. It provides personalized service to approximately eight million policyholders throughout the United States, the District of Columbia, Puerto Rico, Guam, and American Samoa. Its family of companies includes six life insurance companies, eight property and casualty insurance companies, and numerous non-insurance subsidiaries. The Company operates in five business segments: Life, Annuity, Health, Property and Casualty, and Corporate and Other. During the year ended December 31, 2011, the Company sold a portfolio of directly owned industrial real estate and its interests in partnerships of similar industrial real estate.
The Company ‘s products under its Life segment include Individual and group life insurance products, including whole life, term life, variable universal life and universal life, and Credit life insurance. Whole life products provide a guaranteed benefit upon the death of the insured in return for the periodic payment of a fixed premium over a predetermined period. Premium payments may be required for the entire life of the contract period, to a specified age or period, or may be level or change in accordance with a predetermined schedule. Whole life insurance includes policies that provide a participation feature in the form of dividends. Policyholders may receive dividends in cash or apply them to increase death benefits, increase cash values available upon surrender, or reduce the premiums required to maintain the contract in-force. Because the use of dividends is specified by the policyholder, this group of products provides flexibility to individuals to tailor the product to suit their specific needs and circumstances, while at the same time providing guaranteed benefits.
Term life products provide a guaranteed benefit upon the death of the insured for a specified time period in return for the periodic payment of premiums. Coverage periods range from one year to thirty years, but in no event are they longer than the period over which premiums are paid. Universal life products provide insurance coverage through a contract that gives the policyholder flexibility in premium payments and coverage amounts. Universal life products may allow the insured, within certain limits, to increase or decrease the amount of death benefit coverage over the term of the contract and the owner to adjust the frequency and amount of premium payments. Universal life products are interest rate sensitive. Premiums (net of cost of insurance and contractual expense charges) and interest are credited to an account maintained for the policyholder.
Variable universal life products provide insurance coverage on the same basis as universal life, except that premiums, and the resulting accumulated balances, are held in a separate account. Variable universal life products allow the policyholder to direct its premiums and account balances into a range of separate accounts or to its general account. In the separate accounts, the policyholder bears the investment risk. The Company collects specified fees for the management of these investment accounts and any net return is credited directly to the policyholder’s account. With some products, policyholders may have the advantage of guarantees that may protect the death benefit from adverse investment experience. Credit life insurance products are sold in connection with a loan or other credit account and are designed to make payments to the lender for the borrower, if the borrower is unable to make payments. Credit life insurance products pay off the borrower’s remaining debt on a loan or credit account if the borrower dies during the coverage period.
The Company distributes the products under its Annuity segment, both to individuals and small businesses: Deferred Annuity and Single Premium Immediate Annuity (SPIA). Deferred annuity is an asset accumulation product. Deposits are received either as a single payment, in case of a Single Premium Deferred Annuity, or as multiple payments, in case of a Flexible Premium Deferred Annuity. Deposits are credited with interest at the Company’s determined rates, subject to policy minimums. Deferred annuities usually have surrender charges that apply beginning at issue and grade off over time. Deferred annuities may also have market value adjustments that can have a positive or negative effect on any surrender value, depending on the relationship of interest rates when the product was sold compared to interest rates when the policy is surrendered. A type of deferred annuity is an equity-indexed deferred annuity.
Equity-indexed deferred annuity is credited with interest at minimum rates established by state insurance law. Any additional interest credited is tied to the performance of a particular stock market index, such as the S&P 500. Caps and participation rates prescribed by a particular product define the relationship between annuity rates credited compared to the performance of the index and may limit additional interest credited. SPIA is an annuity purchased by one premium payment, providing guaranteed periodic (usually monthly or annual) income payment to the annuitant for a specified period, such as for the remainder of the annuitant’s life. Return of the original deposit may not be guaranteed, depending on the terms of the annuity contract purchased. Annuity payments are usually fixed for the payment period, although they may increase at a predetermined rate, depending upon the terms of the contract.
The Company’s Health segment products include Medicare Supplement, Supplemental Insurance, Medical Expense, Stop-Loss and Credit Disability. Medicare Supplement insurance is a type of private health insurance designed to supplement or pick up the costs of certain medical services not covered by Medicare. Supplemental insurance is designed to provide supplemental coverage for specific events or illnesses, such as cancer, and accidental injury or death. Medical expense insurance covers most health expenses, including hospitalization, surgery and outpatient services (excluding dental and vision costs).
Stop-loss coverage is used by employers to limit their exposure under self-insurance medical plans. There are two coverage types available, which are usually offered concurrently: Specific Stop-Loss and Aggregate Stop-Loss. Specific stop loss coverage is initiated when claims for an individual reach the threshold selected by the employer. After the threshold is reached, a stop-loss policy reimburses claims paid by the employer up to the lifetime limit per individual. Aggregate stop-loss coverage is designed to reimburse the employer once the group’s total paid claims reach the stipulated threshold. Credit disability (also called credit accident and health) insurance pays a limited number of monthly payments on a loan or credit account if the borrower becomes disabled during the coverage period.
Property and Casualty Segment
The Company’s product under its Property and Casualty segment include personal lines and commercial lines. Personal lines include insurance policies issued to individuals for personal auto, homeowners and other personal exposures. Personal auto insurance is issued to individuals and covers specific risks involved in owning and operating an automobile, such as bodily injury, property damage, fire, theft and vandalism. Homeowner insurance provides coverage that protects the insured’s property against loss from perils, such as wind and hail, fire, theft and liability. Other personal insurance provides coverage for property, such as boats, motorcycles and Recreational Vehicles. Agribusiness insurance comprised the majority of its commercial lines. This includes property and casualty coverage tailored for a farm, ranch or other agricultural business operations, contractors, and targeted business within the rural and suburban markets. Commercial auto insurance is issued in conjunction with the sale of its agribusiness insurance and covers specific risks involved in owning and operating an automobile, such as bodily injury, property damage, fire, theft and vandalism. Other commercial insurance is also sold along with its agribusiness policy and encompasses property coverage, liability coverage and workers’ compensation coverage.
Through the Property and Casualty segment, it offers Collateral Protection Insurance (CPI) and Guaranteed Auto Protection or Guaranteed Asset Protection (GAP). CPI provides insurance against loss, expense to recover, or damage to personal property (typically automobiles) pledged as collateral resulting from fire, burglary, collision, or other loss occurrence that would either impair a creditor’s interest or adversely affect the value of the collateral. The coverage is purchased according to the terms of the credit obligation when the borrower fails to provide the required insurance. GAP insures the excess of the outstanding indebtedness over the primary property insurance benefits that may occur in the event of a total loss to or an unrecovered theft of the collateral. GAP can be written on a range of assets that are used as collateral to secure credit; however, it is most commonly written on automobiles.
Corporate and Other Segment
The Company’s Corporate and Other business segment consists primarily of its invested assets that are not used to support its insurance activities. It also includes its non-insurance subsidiaries, such as investment advisory products and services. This segment provides investment services to each of its other segments and to its non-insurance subsidiaries.
American National Insurance Co
ONE MOODY PLAZA
14TH FL, SEC UNIT - 8TH FLOOR
GALVESTON TX 77550