Financial Overview.
When choosing an insurance company to protect you and your family,
an important consideration is the financial stability of the organization
behind the policy. Federal Life Insurance Company (Mutual) is pleased to present to you an overview of our company's long-term financial stability.
Surplus/Assets Under Management
Year Ended December 31, 2007
In 2007 Federal Life's ratio of surplus to assets (excluding separate accounts) was 16.0%.
Our high ratio provides a substantial margin of safety for our policyholders.
In an uncertain economic environment it is important to be backed by a company
with financial strength. Federal Life provides that security.
Invested Assets Distribution
Year Ended December 31, 2007
The primary investment for Federal Life is in fixed income securities. Fixed income securities represent 85.5% of the company's invested
assets. Cash and other short-term investments represent 1.7% of the invested
assets. The only investment in commercial real estate is the company
owned home office building. Common stocks represent 6.2% of the
invested assets. The company has 5.3% of its invested assets in policy
loans. This investment is fully secured using the cash value of policies
issued by the company as collateral.
Fixed Income Quality Distribution
Year Ended December 31, 2007
The quality of the underlying assets must also be considered. Of our
fixed income securities, 75.0% are rated as a 1 (highest quality) by
the National Association of Insurance Commissioners (NAIC). United
States Government and Agency backed securities make up over 50% of
the securities in the NAIC 1 rating category.
Fixed Income Sector Diversification
Year Ended December 31, 2007
Federal Life invests in fixed income securities with the
objective of providing reasonable returns while limiting the exposure
to credit, liquidity and interest rate risk.
Fixed Income Investments Duration (Years)
Year Ended December 31, 2007
Matching the investment cash flows to the cash flow
demands of the benefits being paid out is an important
consideration in our investment strategy.
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