To Our Stockholders - National Western Life
Transcripción
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