Every Step of the Way 2016 Annual Report

Taking Steps to Retain Employees
Taking Steps to Protect Your Livelihood
Message from the President
Taking Steps to Protect Your Family
Taking Steps to Enable Agent Success

Every Step of the Way 2016 Annual Report

Every Step of the Way

Belief is the word that comes to my mind when I reflect back on 2016.

No matter how much success the Company experienced during his leadership, my father, Mike McCord, believed our best days were ahead and that we must charge forward into those best days. I share that same unwavering belief and confidence he had in our company and our team, as it is belief like this that is the beginning of any accomplishment, and our team’s 2016 accomplishments certainly demonstrated this.

The strength and perseverance of our team was evident in 2016 when, among other successes, Illinois Mutual achieved the long-term strategic objective of A.M. Best upgrading the Company's Financial Strength Rating to A- (Excellent).

Additionally, the Company finished stronger than ever in 2016 with growth in our business, Company surplus and our overall Company assets. We also invested more in our company through leadership development, employee education, technology advancements, underwriting improvements and new product development. Yes, 2016 was a year of many accomplishments.

In 2017 we will continue to charge ahead to create an even brighter future with a focus on deepening our customer insights and innovations while we further grow our sales and financial position. We will continue listening to the needs of the consumer and seeking agent feedback to create new products like the LifeAid™ Accelerated Benefits Rider introduced in 2016.

While we are focused on growth, we maintain our company’s 107-year commitment of being there every step of the way. We will continue supporting our agents as they grow and develop their business. We will continue fulfilling our promises to our policyowners to be there for them and their families when they need us, based on the products they’ve purchased.

As we move onward into 2017, I look forward to the successes that I know are ahead of us!

Katie M. Jenkins
President & Chairperson

2016 at Illinois Mutual

Volunteering and giving is an integral part of the culture at Illinois Mutual. Almost all employees participate in giving financially, and many also donate their time. In 2016, Illinois Mutual was again named a local top 20 United Way company, with an employee giving participation rate of 99 percent. A number of Illinois Mutual employees also participated in Relay for Life, qualifying our team for the Team Excellence Award for the State of Illinois for the second year in a row. Employees also participated in Race for the Cure, Junior Achievement, Salvation Army charitable efforts, and elementary school tutoring and mentoring, among other worthwhile causes.

“Our employees really dig deep and work hard when it comes to giving back to the community.” — Amy Epkins, Human Resources
LifeAid™ Accelerated Benefit Rider Launch
A.M. Best A- Rating
Disability Income Insurance - PERKS
Combined Billing for Worksite groups

In 2016, Illinois Mutual introduced our LifeAid™ Accelerated Benefit Rider, which is now automatically included with Illinois Mutual’s Path Protector® Whole Life where available, at no additional premium, if you meet established underwriting criteria. Read More

LifeAid™ Accelerated Benefit Rider

In addition to providing necessary life protection with a guaranteed death benefit, Illinois Mutual’s Path Protector® Whole Life insurance now includes our LifeAid™ Accelerated Benefit Rider.1 This rider gives you the flexibility to accelerate the payment of your policy’s death benefits if you become chronically or terminally ill.

Accelerated benefits for a chronic illness are available when a licensed physician certifies that you are permanently unable to perform, without substantial assistance from another individual, two or more activities of daily living for a period of at least the last 90 consecutive days due to a loss of functional capacity; or that you require substantial supervision to protect you from threats to health and safety due to permanent severe cognitive impairment.

Accelerated benefits for a terminal illness are available when a licensed physician diagnoses you with a medical condition that is expected to result in death within 24 months of the date we receive due proof.

Learn more about the LifeAid™ Accelerated Benefit Rider and see how Illinois Mutual can help empower you with a flexible policy that lets you choose when you use your benefits!

Insured must be 65 or younger at time of application and meet established underwriting criteria to qualify for the LifeAid™ Accelerated Benefit Rider. A rider providing accelerated benefits for terminal illness only will be available to individuals who do not qualify. Payments made under these riders are intended to qualify for favorable tax treatment under the Internal Revenue Code. Illinois Mutual recommends that you consult a qualified tax advisor prior to purchasing the policy or accelerating benefits. Accelerated Death Benefit Payments may affect eligibility for or the amount of certain state or federal government benefits such as Medicaid or Supplemental Security Income (SSI). These riders are not intended to be a substitute for long term care insurance, health insurance, or nursing home insurance. Certain charges accrue when an Accelerated Death Benefit is paid. Acceleration of death benefits creates a lien that reduces (and may terminate) the policy’s death benefit and the cash available for loans, withdrawals, and nonforfeiture options. Interest continues to accumulate after the payment date. Only one benefit for chronic illness may be paid during any 12-month period. Policy Form 617, Whole Life Insurance To Age 121 Policy
Policy Form 5738, Chronic and Terminal Illness Accelerated Death Benefit Rider
Policy Form 5739WL, Terminal Illness Accelerated Death Benefit Rider
Not available in AK, DC, HI, MT or NY. Coverage and availability may vary in other states.
For policy costs and details of coverage, limitations, exclusions and terms, contact Illinois Mutual.

Illinois Mutual is pleased to report that A.M. Best has upgraded Illinois Mutual’s Financial Strength Rating to A- (Excellent) and the Long-Term Issuer Credit Rating to “a-“. The outlook on both of these ratings is Stable.

A.M. Best notes, among other factors, that the rating upgrades reflect improvement in topline growth and maintenance of absolute capital and strong risk adjusted capitalization. The A.M. Best report also highlights Illinois Mutual’s diverse business profile, its solid overall net operating performance, and the diversification and improved risk profile of Illinois Mutual’s investment portfolio.

Illinois Mutual introduced PERKSSM in 2016; this campaign introduced DI to small business owners. We know the right combination of Individual Disability Income (DI) for personal expenses like a mortgage, utilities and groceries, combined with Business Expense (BE) protection to cover eligible business expenses*, can protect a business owner and his or her business.

*Eligible Business Expenses Include: Employee Salaries, Lease/Rent, Mortgage/Loan Interest, Maintenance, Utilities, Operational Expenses, Taxes: Property & Payroll, Professional Expenses, Facility Expenses

Combined Billing was introduced in 2016 to help business owners take the complexity out of offering multiple carriers’ products to their employees.

Vision Financial, an experienced third party administrator, works behind the scenes to reconcile changes in the deductions and premiums due for employees’ benefits selections and channels the premium payments to the proper carriers. This limits a company’s involvement in the time-consuming process of benefits administration at no cost to employers or employees. Employers can offer as many voluntary products as they want with minimal impact on their resources. Read More

What is Combined Billing?

Combined Billing can help business owners take the complexity out of offering multiple carriers’ products to their employees.

Here’s how it works: Vision Financial, an experienced third party administrator, works behind the scenes to reconcile changes in the deductions and premiums due for your employees’ benefits selections and channels the premium payments to the proper carriers. This limits your company’s involvement in the time-consuming process of benefits administration at no cost to you or your employees.

The Benefits of Combined Billing

  • Your payroll department does not have to reconcile each monthly bill that an insurance company sends. You simply send the deduction register, in an electronic format of your choice, to Vision Financial’s secure FTP site. Vision Financial then reconciles each insurance company’s bill and pays the premium to the carriers.
  • There is minimal impact on your accounts payable or human resources department. You simply electronically transfer (ACH) the premium deductions made for the month to the third party administrator’s lock box.
  • Upon notification by the insurer of any benefit changes or employee changes, Vision Financial automatically adjusts the amount that is to be deducted and sends the deduction change information securely to your payroll department.

You can offer your employees as many voluntary products as you want with minimal impact on your resources.

Just one more way Illinois Mutual is making doing business with us Fast, Simple, Seamless®!

Taking Steps to Protect Your Family

Nothing is more important to Long Nguyen than family. When he and his wife had difficulty starting a family, they sold their business and moved to a smaller house to be able to finance having their son. Life insurance is a meaningful and powerful gift of love that Long has selected to protect what he cherishes the most — family. Agent Jimmy Vu walked him through the steps to insure he had the right amount and type of life insurance. Long has also given himself a gift: peace of mind. He says he can sleep better at night knowing that if something happens to him, his family will be able to stay in their home and the hopes and dreams he has for his son will not be jeopardized.

“If something happens to me I know my son, my family will be taken care of... I can sleep better at night.” — Long Nguyen, Policyowner

Taking Steps to Protect Your Livelihood

Sean Cresap has a lot of people depending on him, including his wife, children and his employees at Cresap Orthotics and Prosthetics. In the Wenatchee, Washington area, many children and adults also count on Sean’s business to create the braces and prosthetics they need for daily living. “I saw the writing on the wall in terms of the importance of being able to provide for my family and my employees, too,” said Sean. Disability insurance made perfect sense to Sean and his agent, Todd Radwick, who guided him through the process. Sean’s family and business are ready for the unexpected because he has disability income protection along with disability business overhead expense protection.

“Disability insurance, protecting your income is the single most critically important area for risk protection, yet oftentimes the most overlooked.” — Todd Radwick, Agent

Taking Steps to Retain Employees

Bone & Joint offers Illinois Mutual Worksite benefits as part of its strategy to attract and retain its valuable employees. Voluntary benefits provide solutions to meet employees' supplemental insurance coverage needs. Agent Joe Jurgensmier noted after helping the clinic switch to Illinois Mutual, employees' premiums dropped and participation increased.

Bone & Joint CEO Terry Lawrence feels a family atmosphere is something that his business and Illinois Mutual have in common. Terry summed up his experience as “very personal with outstanding customer service.”

“If you care about your employees you will go the extra distance for them.” — Terry Lawrence, CEO, Bone & Joint 

Taking Steps to Enable Agent Success

Illinois Mutual agents agree the family feeling, experienced staff and individualized service they receive contribute to their success. “There are distinct advantages in having a smaller, but strong, highly-rated company where the agent has more direct contact,” according to agent Todd Radwick, president and CEO of Radwick Financial Group.

Our agents have direct access to underwriting, policy services and other areas critical to their clients’ needs. Educational opportunities offered to agents include one-on-one coaching from regional managers. Calls to Illinois Mutual’s sales support team are answered in about 60 seconds by team members who have an average of 15 years of experience.

“Their back-end service is amazing. If I have a problem I can call them and it gets fixed immediately.” — Joe Jurgensmier, Agent

2016 Financial Report

Investment Portfolio by Asset Class

 54.8%Corporate Bonds
 23.7%Mortgage-Backed Securities
 13.4%Government Bonds
 3.8%Common Stock
 1.4%Policy Loans
 0.9%Other Invested Assets
 1.7%Commercial Mortgages
 0.2%Real Estate

Assets

($ in Millions)
2006
2011
2016
1,235.0
1,227.9
1,434.3

Surplus

($ in Millions)
2006
2011
2016
147.2
115.6
226.0

Total Net Revenue

($ in Millions)
2006
2011
2016
239.2
176.0
160.8

Gross Investment Income

($ in Millions)
2006
2011
2016
84.8
67.5
51.0
Assets 2016 2015
Cash and Short-Term Investments 7,842,179 9,311,361
Bonds 1,195,800,691 1,165,569,998
Preferred Stocks 0 11,668,339
Common Stocks 49,532,539 41,309,957
Mortgage Loans 21,844,422 11,102,824
Real Estate 2,936,082 2,697,678
Other Invested Assets 12,130,567 11,259,575
Policy Loans 17,782,528 17,499,256
Total Cash and Invested Assets 1,307,869,008 1,270,418,988
Other Assets 71,956,618 63,413,892
Separate Accounts 54,498,155 55,102,050
Total Assets 1,434,323,781 1,388,934,930
Liabilities and Surplus 2016 2015
Life Reserves 703,060,907 691,328,394
Health Reserves 354,165,323 352,817,965
Other Policy Reserves 26,474,821 16,137,187
Investment Reserves 48,296,591 41,464,445
Other Liabilities 21,876,838 20,429,613
Separate Accounts 54,498,155 55,102,050
Total Liabilities 1,208,372,635 1,177,279,654
Surplus 225,951,146 211,655,276
Total Liabilities and Surplus 1,434,323,781 1,388,934,930

Board of Directors

  • Katie M. Jenkins
  • Thomas P. Jenkins
  • Robert D. Bollegar
  • Melissa Metternich
  • Judith K. McCord
Officers
  • Katie M. JenkinsPresident and Chairperson
  • Erin K. CallahanVice President
  • Christopher A. ConnorVice President
  • Louis S. KanowskyVice President, Treasurer and Controller
  • Elizabeth A. MartinVice President
  • Maureen T. MulvilleSecretary, Vice President and General Counsel
  • Craig A. ParrVice President
  • Susan M. ReitzVice President and Chief Actuary
  • Jeffrey L. WannVice President
 
  • Jeffrey D. BrownellAssistant Vice President
  • Christine M. CaseAssistant Vice President
  • Kevin R. ChristensenAssistant Vice President
  • Mary L. GenselAssistant Vice President
  • Ellen J. GormanAssistant Vice President
  • John A. LaFolletteAssistant Vice President
  • Kevin T. LarkinAssistant Vice President
  • Lynn M. RathbunAssistant Vice President
  • David Y. RatnarajAssistant Vice President
  • Jennifer E. SchulzeAssistant Vice President