Overview
The Company’s operations over the last several years generally reflect three trends or events which the Company expects to continue to focus on: (i) increased attention to "niche" insurance products, such as the Company’s funeral plan policies and traditional whole life products; (ii) emphasis on cemetery and mortuary business; and (iii) capitalizing on an improving housing market by originating mortgage loans. The Company has adjusted its strategy to respond to the changing economic circumstances resulting from the COVID-19 pandemic. Insurance Operations The Company’s life insurance business includes funeral plans and interest-sensitive life insurance, as well as other traditional life, accident and health insurance products. The Company places specific marketing emphasis on funeral plans through pre-need planning. A funeral plan is a small face value life insurance policy that generally has face coverage of up to $25,000. The Company believes that funeral plans represent a marketing niche that is less competitive because most insurance companies do not offer similar coverage. The purpose of the funeral plan policy is to pay the costs and expenses incurred at the time of a person’s death. On a per thousand-dollar cost of insurance basis, these policies can be more expensive to the policyholder than many types of non-burial insurance due to their low face amount, requiring the fixed cost of the policy administration to be distributed over a smaller policy size, and the simplified underwriting practices that result in higher mortality costs. In response to the COVID-19 pandemic, the life insurance sales force has transitioned to virtual and tele sales processes and transitioned approximately 95% of office staff to work remotely.
The following table shows the condensed financial results of the insurance operations for three and six months ended June 30, 2021 and 2020. See Note 7 to the condensed consolidated financial statements.
Three months ended June 30 Six months ended June 30 (in thousands of dollars) (in thousands of dollars) % Increase % Increase 2021 2020 (Decrease) 2021 2020 (Decrease) Revenues from external customers Insurance premiums $ 24,959 $ 22,925 9 % $ 48,309 $ 45,216 7 % Net investment income 13,805 12,782 8 % 27,743 25,834 7 % Gains (losses) on investments and other assets 1,210 1,756 (31 %) 2,371 (789 ) (401 %) Other 684 325 110 % 1,177 734 60 % Total $ 40,658 $ 37,788 8 % $ 79,600 $ 70,995 12 % Intersegment revenue $ 1,750 $ 1,816 […]
