To Our Stockholders - National Western Life

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To Our Stockholders - National Western Life
Financial Highlights
Corporate Information
(In thousands except per share data)
2001
2000
1999
1998
1997
Income Statement
Insurance revenues
Index options
Realized gains (losses) on investments
Total revenues
$
343,691
(13,539)
(27,046)
303,106
344,225
(32,268)
(19,242)
292,715
336,283
10,719
4,481
351,483
323,173
8,057
2,384
333,614
313,844
18
(1,588)
312,274
Earnings from continuing operations
Cumulative effect of change in
accounting principle
Losses from discontinued operations
Net earnings
$
44,585
28,540
59,225
49,018
42,572
2,134
–
46,719
–
–
28,540
–
–
59,225
–
(14,125)
34,893
–
(1,000)
41,572
$ 3,809,472
3,250,084
559,388
3,693,820
3,193,714
500,106
3,678,738
3,203,216
475,522
3,513,601
3,075,236
438,365
3,220,590
2,819,727
400,863
17.55
(4.96)
12.59
11.66
(3.55)
8.11
15.96
0.82
16.78
13.43
0.44
13.87
12.38
(0.29)
12.09
0.60
–
13.19
–
–
8.11
–
–
16.78
–
(4.00)
9.87
–
(0.28)
11.81
159.15
111.20
142.71
103.06
135.84
68.63
Balance Sheet
Total assets
Total liabilities
Total stockholders’ equity
Diluted Earnings Per Share
$111.20
$68.63
$103.06
$117.50
Market Price of
Class A Common Stock
$101.50
$114.80
114.80
101.50
2001
2000
1999
1998
1997
2001
2000
1999
1998
1997
1999
1998
1997
2001
2000
1999
1998
$313,844
$323,173
125.31
117.50
$159.15
$343,691
2001
Book Value Per Share
$142.71
$344,225
$336,283
$3,809,472
$3,693,820
$3,678,738
$3,513,601
2000
Insurance Revenues
Total Assets
1997 $3,220,5900
$
$135.84
Stock Values Per Share
Book value
Market price of Class A common stock
$125.31
Earnings from continuing operations:
$
Continuing operations
Net realized gains (losses) on investments
Earnings from continuing operations
Cumulative effect of change in
accounting principle
Losses from discontinued operations
$
Net earnings
F INANCIAL H IGHLIGHTS
1
To Our Stockholders
To Our Stockholders
“The year 2001
will be forever
remembered for the
tragic events of
September 11th...
the words “united
we stand” have never
meant more than
they have since that
d a y .”
2
he year 2001 will be forever
T
remembered for the tragic events of
September 11th and the changes that
day brought to our lives as a result.
Despite the invasion of terrorism into
the daily fabric of our society, never
was the strength and resiliency of a
nation more boldly demonstrated by
the subsequent efforts of people coming together to help each other and
stand up against that which would
threaten the basic foundations of freedom and justice. The words “united
we stand” have never meant more
than they have since that day.
2001 was also a year in which
National Western continued to build
upon its foundation of strength and
stability by taking actions for growing
profitably and efficiently, enhancing
value for stockholders and providing
products and services to satisfy the
needs of our customers. Although the
economy created a backdrop for a
challenging year, we invested a signif-
N ATIONAL W ESTERN L IFE I NSURANCE C OMPANY 2001 A NNUAL R EPORT
icant amount of time and resources
for delivering on our commitments as
well as preparing for the future.
Financial Highlights
National Western made strong gains
in financial performance in 2001 as
evidenced by net earnings of $46.7
million, earnings per share of $13.19,
and total assets in excess of $3.8 billion. In addition, the Company
reached a significant milestone at
year-end 2001 by surpassing $10 billion of life insurance coverage in
force, a testament to the loyalty and
hard work of both the agents representing National Western and our
home office staff.
Net earnings in 2001 increased nearly
64% over the net earnings recorded in
2000 of $28.5 million. While 2000
net earnings were depressed as a
result of the precipitous fall in the
stock market and its impact upon the
profitability of the Company’s equity-
indexed annuity products,
2001 earnings reflect
improvements across the
board in the economic fundamentals of the Company’s
business. Improvements in
mortality experience, product
persistency, expense management, and investment spread
margins all contributed to the
positive direction of reported
earnings.
The year was not without
challenges however. Most of
2001 was spent in the midst
of an economic recession
which saw interest rates
methodically decline to levels
not seen in the past forty
years. The migration to lower
interest rates combined with a
lackluster stock market produced a difficult selling environment for National
Western’s fixed interest rate
and equity-indexed products.
Impacted even more so was
the credit quality of the
Company’s fixed income portfolio as the economic recession, the events of September
11th, and revelations of inappropriate financial reporting
practices of major corporations combined to create a crisis of confidence in corporate
credit quality. As a result,
investments held by the
Company in debt securities of
several well-known companies
were written down to fair
value reflecting an other than
temporary decline in value of
the securities. Net realized
losses on investments in 2001
of $27.0 million primarily
reflect the losses associated
with investment holdings of
these entities.
Despite the challenges presented, earnings per share
increased 63% from $8.11
per share in 2000 to $13.19
per share in 2001. Our strategy has been to keep building
through organic growth and
reinvestment of earnings into
operations. Consequently, the
book value per share of
National Western’s stock
increased to $159.15 at the
end of 2001 from $142.71 at
year-end 2000. While broad
based market indices like the
Dow Jones Industrial Average,
the Standard & Poor’s 500
Index, and the NASDAQ
produced negative returns in
2001 of 7%, 13% and 21%,
respectively, the market value
of National Western’s Class A
common stock increased
nearly 8% from $103.06 at
December 31, 2000 to
$111.20 at December 31,
2001.
Operational Highlights
Our strategy focuses on leveraging the financial strengths
of the Company for developing products that meet the
protection and wealth management needs of our customers, providing quality
service that meets the expectations of our independent
agency distribution, and continuing to invest in technology and people. 2001 was a
year of progress as we continued to execute our strategy in
each of these areas by focusing on core protection and
wealth management products,
attracting new sources of distribution, and expanding our
presence in various markets.
Domestically, we secured certificates of authority in three
additional states
(Massachusetts, New Jersey,
and Vermont) bringing the
total states authorized to conduct business in to forty-six.
Distributing products through
independent marketing companies and agents, we actively
recruited and attracted twenty-two new national marketing organizations (NMO) in
2001 to represent National
Western and its products
bringing the total number of
NMO’s to over eighty. These
NMO’s have well developed
agent networks and proven
success in marketing life
insurance and annuity
products.
Internationally, National
Western’s longstanding reputation for products and service to residents of Central
and South America, the
Caribbean, and the Pacific
Rim produced dividends in
bringing a significant number
of new independent brokeragents to the Company. The
number of international
agents contracted with
National Western increased
from 1,600 at year-end 2000
to nearly 2,600 at year-end
2001 with most of the additions occurring in the fourth
quarter of the year. Many of
these new agents were currently producing significant
amounts of business with
other carriers.
During 2001, we undertook
product development initiatives into new niche markets
where the Company had not
previously had a presence.
Domestically, we released a
new mortgage term product
providing coverage that pays
off an insured’s mortgage if
the insured passes away or
refunds all premiums paid at
the end of the mortgage term
if the insured is still alive.
Additional riders for disability, unemployment, and critical illness allow the insured
and the agent to customize
the protection needed for
each individual’s situation.
Internationally, we developed
our first equity-indexed universal life policy which provides an opportunity for the
insured to participate in the
upside potential of the
Standard & Poor’s 500 Index®
while maintaining insurance
protection coverage.
We made significant developments in our information
technology resources by
investing in new technologies
and beginning the process of
migrating from “legacy” systems. In 2001, we implemented automated workflow
processes into our back office
administration areas to move
toward a “paperless” environment where paperwork previously passed from area to
area, desk to desk, is now
moved through the appropriate processing areas electronically via images scanned and
routed to personal desk top
computers. Such technologies
allow us to be more flexible
and competitive as unit operating costs are reduced. Our
objective ultimately is to augment our ability to provide
personal and expedited service to our policyholders and
independent agents.
Building for the Future
We recognize that change
caused by consolidation, the
blurring of financial service
providers, technology
advances, economic forces,
legislation and regulation all
combine to make the future
operating framework difficult
to predict or control. We
intend to keep growing efficiently and profitably leveraging our financial strengths
and competitive advantages in
niche markets. By attracting
and retaining talented individuals and providing them
with the right tools and technology, we are confident that
we will be able to improve
our business processes to
readily meet the needs of our
customers cost efficiently.
Our thanks and appreciation
go to our Board of Directors,
our management and staff,
and our independent marketing organizations and agents
for their hard work and support behind the success of
National Western. Their combined efforts and talents have
positioned us well for the
future.
TO OUR STOCKHOLDERS
3
A Nuestros Accionistas y Dueños de Pólizas
A Nuestrros Accionistas y Dueños de Pólizas
Puntos Sobresalientes Financieros
En el 2001 National Western logró
grandes mejoras en su desempeño
financiero como se evidencia de sus
ganancias netas de $46,7 millones,
ganancias por acción de $13,19, y
activos totales en exceso a $3,8 mil
millones. Adicionalmente, la
Compañía alcanzó un hito significativo
al sobrepasar los $10 mil millones de
seguro de vida en vigor al final del año
2001, una certificación de la lealtad y
del arduo trabajo de ambos los agentes
que representan a National Western
Life y al el personal de la Casa Matriz.
“El año 2001 siempre será recordado
por los trágicos
eventos del 11 de
septiembre y los
cambios que como
resultado ese día
trajo a nuestras
vidas.
Las palabras
“unidos estamos”
nunca han tenido un
significado más
p r o f u n d o .”
4
l año 2001 siempre será recordaE
do por los trágicos eventos del 11 de
septiembre y como resultado los cambios que como resultado ese día trajo
a nuestras vidas. A pesar de la
invasión del terrorismo en la vida
cotidiana de nuestra sociedad, nunca
se ha demostrado la fuerza y poder de
recuperación de una nación como se
ha sido visto en los subsiguientes
esfuerzos de la unión de la gente al
unirse para ayudarse entre si y
enfrentar aquello que amenazaría la
fundación básica de la libertad y la
justicia. Las palabras “unidos estamos” nunca han tenido un significado
más profundo.
El 2001 también fue el año en el cual
National Western continuó construyendo sobre su base de fuerza y
estabilidad al tomar pasos acciones
para crecer rentablemente y eficientemente, mejorando el valor para los
accionistas y ofreciendo productos y
servicios para satisfacer las necesidades
de nuestros clientes. Aunque la
economía creó un telón de fondo para
un año lleno de retos, invertimos gran
cantidad de tiempo y recursos para
cumplir con nuestros compromisos
así como para prepararnos para el
futuro.
N ATIONAL W ESTERN L IFE I NSURANC E C O M P A N Y 2001 A N N U A L R EPORT
Las ganancias netas en 2001 aumentaron casi un 64% sobre las ganancias
netas registradas de $28,5 millones en
el 2000 de $28,5 millones. Mientras
las ganancias netas del 2000 estuvieron deprimidas como resultado de
la descomunal caída de la bolsa de valores y su impacto sobre la rentabilidad
de los productos de anualidades indexados a valores de la Compañía, las
ganancias del 2001 reflejan mejoras en
todos los renglones de los fundamentos económicos de los negocios de la
Compañía. Mejoras en la experiencia
de mortalidad, persistencia de los productos, administración de los gastos, y
márgenes de ganancia en las inversiones todas contribuyeron a la dirección positiva de las ganancias reportadas.
Sin embargo, el año no estuvo sin sus
retos. La mayor parte del 2001 transcurrió en medio de una recesión
económica que vió bajar las tasas de
interés a un nivel no visto en los últimos cuarenta años. La tendencia hacia
tasas de interés más bajas combinada
con una bolsa de valores sin brillo,
crearon un ambiente difícil ambiente
de ventas para los productos de interés
fijo e indexados a valores de National
Western. La calidad crediticia de la
cartera de interés fijo de la Compañía
fue impactada aún más, ante los eventos del 11 de septiembre, y las revelaciones de las prácticas financieras no
inapropiadas de corporaciones importantes, las cuales se combinaron para
crear una crisis de confianza en la cali-
dad crediticia corporativa.
Como resultado, las inversiones en valores de varias
bien conocidas empresas
mantenidas por la Compañía
fueron descontadas a un valor
propicio apropiado reflejando
una caída de índole permanmente en su valor. Pérdidas
netas en inversiones en 2001
de $27,0 millones reflejan las
pérdidas asociadas principalmente con inversiones mantenidas con esas empresas.
A pesar de estos retos, las
ganancias por acción aumentaron en un 63% de $8,11 por
acción en el 2000 a $13,19
por acción en el 2001.
Nuestra estrategia ha sido la
de seguir construyendo por
intermedio del crecimiento
orgánico y la reinversión de
las ganancias en nuestras
operaciones. A consecuencia
de esto, el valor en libro del
precio por acción de National
Western aumentó a $159,15
al final de 2001 de un valor de
$142,71 al final del año 2000.
Mientras índices con una base
amplia como el Dow Jones
Industrial Average, el Indice
de Standard and Poor’s 500, y
el NASDAQ produjeron resultados negativos en el 2001 de
7%, 13% y 21% respectivamente en 2001, la acción
común Clase A de National
Western aumentó casi 8% de
$103,06 al 31 de diciembre
del 2000 a $111,20 al 31 de
diciembre de 2001.
Puntos Sobresalientes de
las Operaciones
Nuestra estrategia se dirige a
está enfocada en aprovechar la
fuerza financiera de la
Compañía para y en desarrollar productos que cumplen
con las necesidades de protección y administración de capital de nuestros clientes,
dando servicio de calidad que
alcance las expectativas de
nuestra distribución de agencia independiente, y en continuar invirtiendo nuestra
inversión en tecnología y la
gente en personal. El 2001
fue un año de progreso mien-
tras continuamos a la ejecución de nuestra estrategia en
cada una de esos renglones al
enfatizar productos de base y
de administración de capital,
atrayendo nuevas fuentes de
distribución, y expandiendo
nuestra presencia en diversos
mercados.
Nacionalmente
Domesticamente, logramos
conseguir certificados de
autorización autoridad en tres
estados más (Massachusetts,
New Jersey y Vermont), elevando a cuarenta y seis el
número de estados en los
cuales tenemos autorización
para conducir negocios a
cuarenta y seis.
Distribuyendo productos por
intermedio de compañías y
agentes de mercadeo independientes, activamente
reclutamos y atraimos veintidos organizaciones de mercadeo nacionales nuevas
(NMO) en el 2001 para representar a National Western y
sus productos, llevando el
número de NMOs a casi
noventa. Estos NMOs tienen
redes de distribución bien
desarrolladas y comprobado
éxito comprobado en el mercadeo de productos de seguro
de vida y anualidades.
Internacionalmente, la reputación de National Western
por sus productos y servicio a
los residentes de Centro y Sur
América, el Caribe, y la
Cuenca del Pacífico produjeron dividendos al atraer a la
Compañía a un número
importante de nuevos corredores-agentes independientes
nuevos. El número de
agentes bajo contrato con
National Western aumentó de
1.600 al final del año 2000, a
casi 2.600 al final del año
2001, siendo la gran mayoría
de este aumento las adiciones
en el último trimestre del
año. Muchos de estos agentes
estaban produciendo grandes
cantidades de negocios con
otras empresas.
Durante 2001, tomamos iniciativas de desarrollo de productos a nuevos mercados
especializados donde la
Compañía no había tenido
presencia. Nacionalmente
Domésticamente, introducimos un nuevo seguro a término hipotecario dando
cobertura que paga cancela la
hipoteca de un asegurado si el
asegurado fallece o reembolsa
las primas al final del período
hipotecario si el asegurado
aún vive. Suplementos adicionales para la incapacidad,
el desempleo, y enfermedades
críticas le permiten al asegurado y al agente adaptar la
protección necesaria para la
situación de cada individuo.
Internacionalmente, desarrollamos nuestra primera póliza
de vida universal indexada
que le dáa la oportunidad al
asegurado de participar en la
el potencial de subida del
Indice de Standard and Poor’s
500 mientras mantiene la
cobertura de protección de
seguro.
Logramos avances importantes en nuestros recursos de
tecnología informativa por
medio de la inversión en
nuevas tecnologías y al
comenzar la migración desde
los sistemas “legacy”. En el
2001, implementamos procesos automatizados del flujo de
trabajo a nuestras áreas
administrativas en las oficinas
departamentales para llevarnos hacia un ambiente “sin
papeles” donde la documentación que hasta ahora
pasaba de área en área,
escritorio a escritorio, ahora
se mueve electrónicamemte a
través del área de procesamiento correspondiente por
medio de imágenes
escaneadas y encaminadas a
computadoras personales de
escritorio. Tales tecnologías
nos permiten ser más flexibles
y competitivos ya que se
reducen los costos operativos
por unidad. Ultimadamente
nuestro objetivo es el de
aumentar nuestra habilidad de
proveer servicio personal y
rápido a nuestros dueños de
pólizas y agentes independientes.
Construyendo para el
Futuro
Reconocemos que los cambios causados por las consolidacioónes, la reputación
empañada indefinición de los
proveedores de servicios
financieros, los adelantos en
tecnología, las fuerzas
económicas, legislación y regulación se combinan todas
para hacer que el esquema
operativo del futuro sea difícil
de predecir o controlar.
Nuestra intención es de seguir
creciendo eficientemente y
rentablemente aprovechando
nuestras fuerzas financieras y
ventajas competitivas en mercados especializados. Por
medio de la atracción y retención de individuos talentosos
y de proveerles las herramientas y tecnologías adecuadas,
tenemos la confianza que
podremos mejorar nuestros
procesos de negocios para
lograr cumplir con las necesidades de nuestros clientes con
prontitud y de manera eficiente económica.
Nuestras gracias y aprecioación van a nuestra Junta
Directiva, a nuestra gerencia y
personal, y a nuestras organizaciones de mercadeo independientes y agentes por su
arduo trabajo y apoyo que
están detrás del éxito de
National Western. Sus conbinados esfuerzos y talentos
combinados nos han puesto
en una buena posición para el
futuro.
Robert L. Moody
Chairman of the Board and
Chief Executive Officer
Presidente de la Junta Directiva y
Funcionario Ejecutivo Principal
Ross R. Moody
President and
Chief Operating Officer
Presidente y Funcionario
Operativo Principal
A NUESTROS ACCIONISTAS
5
Financial Management
M
Financial Management
6
N ATIONAL W ESTERN L IFE I NSURANCE C OMPANY 2001 A NNUAL R EPORT
559
500
476
438
401
2001
• to maintain adequate liquidity for cash flow needs.
2000
• to maximize yield, and
1999
• to achieve security of
principal
1998
Investments
Our investment management
strategy emphasizes the prudent handling of stockholders’
and policyholders’ funds:
Growth in Stockholders’
Equity ($ mil)
1997
Debt Securities
Mortgage Loans
Policy Loans
Other
The Company maintains a
high quality and diversified
portfolio of fixed income
securities whose credit quality
is actively monitored through
continual analysis of company
credit, industry outlook,
financial strength, effectiveness of management, and
event risks. This past year
demonstrated how critical this
oversight function is given the
number and magnitude of
company defaults in the U.S.
during 2001. While we did
experience some impairment
writedowns in our corporate
bond portfolio, our exposure
was minimized due to our
strong credit risk management
disciplines. Over 66% of our
investment portfolio at
December 31, 2001 was still
353
89.1%
5.6%
2.9%
2.4%
30.8% AAA ratings and
U.S. Government
6.9% AA ratings
28.5% A ratings
29.8% BBB ratings
4.0% BB ratings and below
Capitalization
Capital strength is important
for the protection of stockholders and policyholders. It
also ensures that the Company
maintains its strong credit ratings while allowing us to take
advantage of profitable opportunities. Although sufficient
capital is necessary to meet the
requirements of regulators, we
have taken the approach of
maximizing our capital position substantially above the
amounts prescribed by regulators in order to provide the
stability and reliability that our
stockholders and policyholders
have come to expect from
National Western.
1996
Allocation of Investments
Securities Credit Quality
rated “A” quality or better by
nationally recognized credit
rating organizations with only
4% rated below investment
grade quality.
312
mitment to a conservative
investment approach and utilization of operating strategies
that produce superior capitalization. These disciplines serve
to provide reliable protection
for our policyholders in meeting our benefit obligations and
enhanced value for our stockholders. Independent rating
agencies have recognized our
prudent perspective on financial management and have
shown their agreement
through their financial
strength ratings of National
Western. Standard & Poor’s
has rated National Western
“A+ (Strong)” and A.M. Best
Company has conveyed an “A(Excellent)” rating on the
Company.
In order to achieve these
objectives, we invest primarily
in investment grade debt securities with lesser amounts
applied to mortgage loans and
other investments. These holdings, coupled with strong
asset/liability matching strategies, provide safety and financial strength for the Company.
1995
ur financial management
O
style is illustrated by our com-
Marketing
Marketing
s a global provider of
A
life insurance products,
National Western maintains a
home office staff possessing
multi-lingual skills to efficiently and effectively serve its
independent agents and policyholders around the world.
Given the specialization needed to service such a diverse
population, operations are
organized along geographic
marketing areas directed by
domestic and international
divisions within National
Western. The Company’s marketing expanse covers over
twenty different countries
which allows us to diversify
our business risks and balance
operating results as market
conditions vary from region to
region around the world. At
December 31, 2001, we
maintained over $10 billion of
life insurance in force distributed as shown in the following graph:
Distribution of Life Insurance
In Force
51%
29%
8%
12%
Latin America
U.S.
Caribbean
Pacific Rim
ance, and traditional life insurance (term and whole life
products) on an individual
basis. The majority of domestic sales have historically been
the Company’s annuity products which include single and
flexible premium deferred
annuities, single premium
immediate annuities, and
equity-indexed annuities on
both a tax qualified or nonqualified basis.
Domestic products are marketed and distributed through
national marketing organizations (NMO) who recruit and
contract independent agents
with National Western and
provide ongoing supervision
and sales support. During
2001, the Company placed an
emphasis upon increasing sales
of life insurance in order to
build up this segment of the
Company’s operations. In
order to attract life insurance
distributors, we developed a
new mortgage protection life
insurance product and revitalized existing universal life
products by adding innovative
features. Even though substantial attention was directed
toward developing life insurance business, we continue to
manufacture new fixed and
indexed annuity products to
provide the choices and features required by our distribution and policyholders.
National Western’s domestic
operations focus on marketing
annuities, universal life insur-
For approximately thirty-five
years, National Western has
accepted applications from
foreign nationals around the
globe. Many of the independent broker-agents in these
countries have been associated
with the Company for twenty
or more years. Our reputation
for commitment and service
in international markets was
never more evident than during 2001 when the number of
independent agents contracted
with National Western
increased over 60%. Brand
recognition of the Company
has become particularly strong
in many of these countries.
Our marketing strategy for
international operations incorporates traditional and universal life insurance products that
appeal to foreign nationals
with substantial financial
resources who desire the stability of the U.S. dollar over
their local currency.
Substantially all of the
Company’s products stipulate
payment of premiums and
policy benefits in U.S. dollars.
The demographics of this end
market results in larger policy
sizes with very favorable persistency characteristics.
national markets and have
continued to add home office
staff with the requisite skills,
ensuring that our agents and
policyholders continue to
receive the service to which
they have come to expect.
With the release of our first
equity-indexed universal life
product early in 2002, we
expect that the year-end
momentum of the international operations will continue
into the foreseeable future.
2001 Premiums and
Deposits by Market
77% Annuities
16% International Life Insurance
7% Domestic Life Insurance
We ended 2001 with strong
momentum in submitted policy applications from our inter-
Contracted Agents
Domestic
Domestic Operations
International Operations
International
Dec. 1999
7130
Dec. 2000
5770
Dec. 2001
6060
1640
1600
2570
F INANCIAL M ANAGEMENT / M ARKETING
7
Summary of Selected Financial Data
Summary of Selected Financial Data
(In thousands except per share data)
2001
2000
1999
1998
1997
14,013
17,615
18,423
19,685
20,968
75,026
234,866
6,247
(27,046)
82,742
210,654
946
(19,242)
76,655
242,980
8,944
4,481
76,649
233,844
1,052
2,384
75,094
217,446
354
(1,588)
303,106
292,715
351,483
333,614
312,274
31,715
35,078
32,456
32,441
35,285
Income Statement
Revenues
Life and annuity premiums
Universal life and investment annuity
contract revenues
Net investment income
Other income
Realized gains (losses) on investments
$
Total Revenues
Expenses
Policyholder benefits
Amortization of deferred policy
acquisition costs
Universal life and investment annuity
contract interest
Other operating expenses
27,424
47,948
39,148
40,415
39,934
144,516
31,681
137,711
29,427
162,302
27,764
158,889
35,504
145,200
27,560
Total Expenses
235,336
250,164
261,670
267,249
247,979
67,770
23,185
42,551
14,011
89,813
30,588
66,365
17,347
64,295
21,723
44,585
28,540
59,225
49,018
42,572
2,134
–
_
–
_
–
_
(14,125)
_
(1,000)
$
46,719
28,540
59,225
34,893
41,572
Earnings from continuing operations
Cumulative effect of change in
accounting principle
Losses from discontinued operations
$
12.59
8.11
16.78
13.87
12.09
0.60
–
–
–
–
–
–
(4.00)
–
(0.28)
Net Earnings
$
13.19
8.11
16.78
9.87
11.81
$ 3,809,472
3,250,084
559,388
3,693,820
3,193,714
500,106
3,678,738
3,203,216
475,522
3,513,601
3,075,236
438,365
3,220,590
2,819,727
400,863
Standard & Poor’s
A+
A+
A+
A+
A+
A.M. Best Company
A-
A-
A-
A-
A-
Earnings before Federal income taxes,
cumulative effect of change in accounting
principle and discontinued operations
Federal income taxes
Earnings from continuing operations
Cumulative effect of change in
accounting principle
Losses from discontinued operations
Net Earnings
Diluted Earnings Per Share
Balance Sheet
Total assets
Total liabilities
Stockholders’ equity
Financial Strength Ratings
8
N ATIONAL W ESTERN L IFE I NSURANCE C OMPANY 2001 A NNUAL R EPORT
Directors
Directors
Robert L. Moody
Charles D. Milos
Chairman of the Board, Chief
Executive Officer, National Western
Life Insurance Company
Galveston, Texas
NWL Director
1963 to present
Senior Vice President –
Investment Analyst,
National Western Life Insurance
Company
Galveston, Texas
NWL Director
1981 to present
Ross R. Moody
President, Chief Operating Officer,
National Western Life Insurance
Company
Austin, Texas
NWL Director
1981 to present
Arthur O. Dummer
President, The Donner Company
Salt Lake City, Utah
NWL Director
1980 to present
Frances A. Moody
Executive Director,
The Moody Foundation
Dallas, Texas
NWL Director
1990 to present
Russell S. Moody
Investments
Austin, Texas
NWL Director
1988 to present
Harry L. Edwards
Retired, Former President and Chief
Operating Officer, National Western
Life Insurance Company
Austin, Texas
NWL Director
1969 to present
Louis E. Pauls, Jr.
President, Louis Pauls & Company
Galveston, Texas
NWL Director
1971 to present
E.J. Pederson
E. Douglas McLeod
Executive Vice President,
The University of Texas
Medical Branch
Galveston, Texas
NWL Director
1992 to present
Director of Development,
The Moody Foundation
Galveston, Texas
NWL Director
1979 to present
S UMMARY
OF
S ELECTED F INANCIAL D ATA / D IRECTORS
9
Officers
Officers
Robert L. Moody
Carol Jackson
Chairman of the Board and
Chief Executive Officer
Vice President – Human Resources
ALHC, ACS, UND
Vice President – Policy Benefits
President and Chief
Operating Officer
Jo Nell Morris,
Charles P. Baley,
FLMI, CLU
Senior Vice President –
Information Services
Robert L. Busby, III,
CLU, ChFC
FLMI, ACS, AAPA
Vice President –
Policyowner Services
James R. Naiser,
CPA, FLMI,
Senior Vice President
FLMI
Vice President –
Systems Development
Al R. Steger,
FLMI, CLU, ChFC, FALU,
FLHC
Richard M. Edwards
Vice President – Risk Selection
Senior Vice President –
International Marketing
B. Ben Taylor,
Paul D. Facey,
Larry D. White,
FSA, MAAA, FCIA, FLMI
Senior Vice President – Chief Actuary
Rodney K. Foster
Senior Vice President –
Chief Marketing Officer
Charles D. Milos
Senior Vice President –
Investment Analyst
James P. Payne,
JD
Senior Vice President – Secretary
Brian M. Pribyl,
CPA, FLMI
Senior Vice President –
Chief Financial & Administrative
Officer and Treasurer
Patricia L. Scheuer,
CFA
Senior Vice President –
Chief Investment Officer
Scott E. Arendale
Vice President –
International Sales Development
Jay C. Bugg,
CLU, ChFC, LLIF
Vice President – Marketing
Mark K. Fisher
ASA, MAAA
Vice President – Actuarial Services
FLMI, AAPA
Vice President –
Policyowner Services
Larry E. Carson,
CPA, FLMI, ACS
Assistant Vice President –
Assistant Controller
Linda J. Diliplane,
FLMI, ACS, CLU
Assistant Vice President –
Risk Selection Administrative
Manager
Robin R. Hulsey,
FLMI, ACS
Assistant Vice President –
Administrative Services
Miguel A. Laborde,
FLMI, CLU, ChFC
Assistant Vice President –
International Sales Development
Ellen C. Otte
Assistant Secretary
Donna L. Richardson,
ACS, SILAF
FLMI, AIAA,
Assistant Vice President –
Agent Contracting & Licensing
Lura L. Rogers,
ACS
Vice President – Marketing
Assistant Vice President –
Domestic Marketing
Mark D. Gulas,
Margaret M. Simpson,
FSA, MAAA
Vice President – Associate Actuary
10
Doris Kruse,
Ross R. Moody
N ATIONAL W ESTERN L IFE I NSURANCE C OMPANY 2001 A NNUAL R EPORT
Assistant Secretary
ACS
Corporate Information
Corporate Information
Executive Offices
National Western Life
Insurance Company,
850 East Anderson Lane,
Austin, Texas 78752-1602,
Telephone: (512) 836-1010.
Will D. Davis,
Heath Davis & McCalla,
Attorneys at Law,
Austin, Texas.
Accountants
Subsidiaries
Deloitte & Touche LLP,
301 Commerce Street,
Suite 2950, Fort Worth,
Texas 76102.
Stock Information
General Counsel
Shares of National Western
Life Insurance Company are
traded on The Nasdaq Stock
Market under the symbol
NWLIA.
NWL 806 Main, Inc., Austin,
Texas.
NWL Investments, Inc.,
Austin, Texas.
NWL Properties, Inc., Austin,
Texas.
NWL Services, Inc., Reno,
Nevada.
NWL Financial, Inc., Austin,
Texas.
The Westcap Corporation,
Austin, Texas.
Stock Transfer Agent
Continental Stock Transfer &
Trust Company, 17 Battery
Place – 8th Floor, New York,
NY 10004
Telephone: (212) 509-4000.
Communications regarding
stock transfer requirements,
lost certificates, and change of
address should be directed to
the Transfer Agent or to the
Office of the Corporate
Secretary of National Western
Life Insurance Company.
Annual Stockholders’
Meeting
The annual meeting of stockholders will be at 9:30 a.m.
(CDT) on June 21, 2002, at
National Western Life
Insurance Company’s executive offices.
Form 10-K
National Western Life Insurance
Company’s 2001 Annual
Report on Form 10-K, as filed
with the Securities and
Exchange Commission, is
included in this annual report.
Additional copies are available
upon request without charge.
Investor Relations
Direct inquiries to Chief
Financial Officer, 850 East
Anderson Lane, Austin, Texas
78752-1602, Telephone:
(512) 719-2230.
Information on the
Internet
Information about National
Western Life Insurance
Company is available on
the internet. Visit our home
page at:
www.nationalwesternlife.com
O FFICERS / C ORPORATE I NFORMATION
11
Mission Statement
Mission Statement
National Western provides high quality insurance
products on a global basis to meet the financial
security needs of well-defined market segments.
We provide professional, friendly service to our
policyholders and agents and are responsive to the
needs of our employees, shareholders and the
community.
Statement of Principles
National Western Life Insurance Company:
• Develops and distributes customer-driven life
and annuity products on a global basis through
agents, brokers and independent marketing
organizations.
• Seeks to – in all ways and at all times – serve our
clients and communities at a level of integrity
and enthusiasm consistent with our position as
one of the world’s premier providers of personal
financial security.
• Provides professional, friendly service to our
policyholders and sales representatives.
• Recognizes the extraordinary stewardship
responsibilities we bear for policyholder assets
and stockholder resources placed in our care.
• Respects the dignity and appreciates the
contribution of each employee-member of
the NWL family.
12
N ATIONAL W ESTERN L IFE I NSURANCE C OMPANY 2001 A NNUAL R EPORT

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