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ANNUAL REPORT 2023
Pan-American Life Insurance Group (PALIG) began earning the trust of millions of customers more than 110 years ago. Fueled by the power of momentum, and inspired by our commitment to promises kept, our foundation of financial strength means Pan-American Life can be there when our clients need us most.
EMPLOYEES
MEMBER COMPANIES
A NETWORK OF TRUSTED AGENTS AND BROKERS ACROSS THE AMERICAS
Serving more than 7 million Policyholders
As a leading provider of insurance and financial services, PALIG offers top-rated individual and group life, accident and health insurance, and financial services in 49 states, the District of Columbia (DC), Puerto Rico, the U.S. Virgin Islands, and throughout Latin America and the Caribbean.
Not all products are available in all locations. For a complete list of the Group’s affiliates and branches as well as the products and services offered, visit palig.com
Economic conditions remained a challenge in many of our markets in 2023. But, amid a welcome return to a more normal operating environment as the multiyear impact of the COVID-19 pandemic diminished, PALIG demonstrated positive momentum across its operations, laying the groundwork for future growth and value creation.
That momentum, stemming from our concerted focus on enhancing resilience, agility and innovation, was reflected in our results. Full-year operating revenue rose 7% to a record $1.31 billion while total premiums increased by 5% to a record $1.55 billion, representing 19 years of consecutive premium growth. Pre-tax operating income (PTOI) grew 14% to $77.2 million and net income for 2023 more than doubled to $68.9 million. Total GAAP Equity grew, and our financial strength was further underscored by our maintained “A” ratings and stable outlook from AM Best and Fitch Ratings.
The strength of our business in 2023 was broad-based with both our life and health businesses helping to drive growth and solid performance across geographies. Our ongoing initiatives to enhance operational efficiency, facilitate ease of doing business, promote flexibility and prioritize productivity coupled with prudent expense and financial management are bearing tangible results, ensuring continued momentum. We are leveraging technology and innovation to accelerate our digital transformation. From the launch of member portals in Latin America and the rollout of agent portals in the Caribbean to streamlined processes that eliminate paper applications and reduce underwriting turnaround times, we are improving the customer experience of our policyholders and enhancing our distribution capabilities across our regions.
Innovation is also what is driving PALIG’s expansion strategy as we continue to explore new insurance products and opportunities. In health, we introduced our Gap Supplemental Medical Expense Insurance in the United States, an employee benefits solution designed to help offset the out-of-pocket expenses that may be incurred under high deductible major medical plans. In individual life insurance, our focus is on innovative policy design and expanding distribution channels. That strategy capitalizes on the unique strengths and opportunities in different regions, from the Northern Triangle, Panama and Costa Rica to Colombia, Mexico and the Caribbean.
In a watershed year for our U.S. business, we entered 2023 having just completed the merger of Mutual Trust Life Insurance Company into Pan-American Life Insurance Company (PALIC) as the fully integrated Mutual Trust Life SolutionsSM division and ended the year by completing the acquisition and merger of Encova Life Insurance Company, further enhancing our scale, reach and investment portfolio in the U.S. The introduction of our new Indexed Universal Life (IUL) product in the U.S. is poised to be a significant driver of sales growth, while integration of former Encova Life agents into the PALIC team are further bolstering our market presence and sales capabilities.
Our progress and momentum are being recognized. PALIG was named a 2023 US Best Managed Company, a program sponsored by Deloitte Private and The Wall Street Journal that recognizes outstanding U.S. private companies and the achievements of their management teams. This is the third consecutive year Pan-American Life has been named a US Best Managed Company.
That is a testament to the quality and depth of our leadership team and structure, led by our three Presidents: Robert DiCianni, President Global Benefits; Bruce Parker, President Global Life; and Steven Friedman, President Finance and Investments, who in September also assumed the role of Chief Financial Officer. And to the expert oversight of our Board of Directors, to which we welcomed our newest member, Dr. Sandra Johnson, in September. As importantly, it reflects the commitment and dedication of our 2,100 employees across 22 countries who embody our mission and everyday live our values of authenticity, transparency, accountability, collaboration and integrity. We will continue to invest in our people and in technology as we build an organization and staffing model to support current and future growth.
Our progress and accomplishments in 2023 are the culmination of our steadfast commitment to growth, innovation, customer support and financial strength, all while fostering strong partnerships and efficient operations in a dynamic market environment. The power of that momentum will carry us forward to ever greater goals as we build on our 113-year heritage, ensure financial security and peace of mind for our customers and strive to be the leading insurance carrier in the Americas.
Sincerely,
José S. Suquet
Chairman of the Board & CEO
Pan-American Life Insurance Group
From the Global Life and Benefits divisions to Corporate Highlights and Investments, PALIG’s dynamic achievements in 2023 reflect a year of strategic growth and innovation – one which capitalized on emerging opportunities and navigated challenges with resilience, propelling the company forward with momentum and bolstering PALIG’s position in the evolving insurance landscape.
Recognized as the U.S. Best Managed Company for the third consecutive year
Introduced new products, successfully managed market realities, dynamic decisions and product innovation
Supported future growth through organizational development enhancing talent management, training, and recruitment initiatives
Completed New Orleans headquarters renovations and implemented our hybrid work program, Flexible Work @ PALIG
Further strengthened our enterprise risk management processes, cybersecurity controls and compliance infrastructure
Continued implementing innovative technologies that improve production and operational efficiency for better customer experiences
Executed our new general ledger solution as well as met new regulatory requirements
Focused on key sectors for mergers and acquisitions opportunities
Increased momentum with expansion of product development, including policy design; and expanded distribution channels and market reach
Private Client Life continues to serve high net worth international clients through innovative digital initiatives and continued growth of it market leading Global Assets IUL offering
Executed the Distribution Expansion Program in Latin America, contributing to 35% of sales in the region
Launched a new competitive Term product in the Caribbean to meet evolving customer needs
Successfully launched easy@pp (featuring digital features such as paperless applications and e-signatures) in Panama, Costa Rica and Honduras, achieving high adoption rates among producers
Improved processes and service for producers in Latin America
Completed acquisition of Encova Life business
Successfully implemented enhancements to the Whole Life Product suite
Developed a new Indexed Universal Life (IUL) product with innovative features and enhanced benefits
Successful introduction to the U.S. Hispanic market achieving top-10 agency status within nine months
Rapid expansion and growth momentum marked by higher demand in the health insurance industry; Doubled growth of International Major Medical and Individual Health lines of business in Panama, Guatemala, Honduras, Mexico, and El Salvador
Grew new annualized premium by 22 percent
Continued to manage increased medical trend in many of our international markets, including in Costa Rica, driven by a shift in patient utilization from the public sector to the private sector
Executed on a comprehensive cancer screening campaign in Latin America, and expanded Bwell, our chronic disease management program, to Panama and Honduras
Launched our mobile health clinic, Health on Wheels, in Panama
Delivered significant mass marketing results due to growth in Mexico, Honduras, Colombia, and Trinidad
Launched the re-branding initiative for Pan-American Accident & Health
Began to work on Minimum Value and Supplemental Gap products
Refreshing our PanaMed product to meet evolving market demands
Implemented a targeted segment approach focusing on specific sectors for enhanced client engagement
Initiated the development of a Salesforce-based Trucking Platform solution
Introduced new MGUs with a focus on Supplemental Medical and Accident & Health products
Led growth and diversification of MGUs and expanded product offerings
Began to refresh our Stop Loss product to better serve client needs
Developed international expansion strategy for key regions: Northern Triangle (Honduras, El Salvador and Guatemala), Costa Rica, Ecuador, Panama, Colombia, and Mexico
Implemented strategic initiatives, including member portals in Latin America, agent portals in the Caribbean, and digital transformation efforts to enhance customer service and streamline processes
Grand opening of new renovated headquarters for Panama featuring a collaborative working environment
Celebrated 95-year anniversary in El Salvador
Citing strong financial performance supported by historically stable earnings, Fitch Ratings and AM Best have maintained Pan-American Life’s ‘A’ (Strong) Insurance Financial Strength (IFS) rating and A (Excellent) rating both with stable outlook. This includes Pan-American Life Insurance Company (PALIC) and its wholly owned subsidiary, Pan-American Assurance Company (PAAC), Pan-American International Insurance Corp. (PAIIC) and INRECO International Reinsurance.
Among the key ratings drivers are PALIG’s strong leadership position in Latin America and Caribbean markets, including extensive distribution and provider networks and understanding of local markets and the Hispanic culture, along with a moderate business profile and very strong capitalization.
In 2023, PALIG's consolidated purchases achieved a "New Acquisition Yield" of 6.56%, surpassing the U.S. Corporate bond investment grade index average of 5.57%. Despite higher rates, PALIG maintained investment quality, with 60% of new acquisitions rated NAIC 1 or A- or higher. As of 12/31/23, PALIG's consolidated bond yield stood at 5.299%, marking an 18-bps increase from 12/31/22. This performance continues to exceed the Life Industry average, reported by SNL as 4.05% as of 12/31/22.
Since its inception in 1911, PALIG has established itself not only as one of the most financially strong insurers in the Americas but also as an employer that elevates and empowers female leaders throughout the U.S., Latin America and the Caribbean.
That’s extraordinary for many reasons, including the realities of women in the workforce in Latin America where less than 50% of women are employed, according to the International Labour Organization.
As we witness the unfolding tapestry of Latina influence at PALIG, it’s imperative to acknowledge and celebrate their diverse contributions and impact. In partnership with two of the top Hispanic/Latino business publications, Hispanic Executive Magazine and Latino Leaders Magazine, PALIG set to highlight the authentic voices of very deserving Latina leaders who are redefining the international business landscape.
The following Latina Leaders at PALIG have emerged as trailblazers in the insurance industry and their respective areas of expertise through notable achievements, building trust and mentorship. Their leadership is characterized by resilience, empathy and dedication, inspiring future generations.
In 2023, we announced exciting office enhancements and plans for the creation of inspiring workspaces at PALIG. The rollout included the inauguration of our new offices in Panama, the newly renovated headquarters in New Orleans and a series of office remodels throughout Latin America and Trinidad.
The renovated offices were inspired by and proudly portray the PALIG brand, mission, and values. The inviting settings features refreshed workspaces that cultivate collaboration within the hybrid and flexible work model. In the new spaces, colleagues and guests can choose between focus booths, collaboration and project spaces, creative nooks, learning and development rooms, and socialization hubs.
It was a highlight of our year, and true pleasure, opening our refreshed office spaces and capturing the delight of our colleagues. Click below to join us on a virtual open house tour of our newly appointed spaces.
In 2023, PALIG continued its commitment to supporting communities across the Americas, striving to create greater momentum towards tangible change. Through collaborative efforts with dedicated colleagues and strategic partnerships with nonprofits, we directed our resources towards communities in need.
Below is a list of organizations that we proudly supported in our collective mission to make a difference:
Greater Momentum Making a Difference -
Greater Momentum Making a Difference -
Greater Momentum Making a Difference -
Leveraging the power of momentum, PALIG leaders transform inspiration into an idea, an idea into a shared vision, and vision into successful action. This force fosters a culture of innovation and collaboration that propels the company. PALIG’s leaders have a clear vision for the Group’s future, and they uphold the company’s values with a collective dedication to the PALIG mission. Whether forging strategic partnerships, seizing opportunities, prioritizing customer needs, driving product innovation and service excellence, mitigating risks, or sustaining momentum during challenging times, PALIG’s leadership team powers the momentum that fuels the company’s purpose and progress.
Chairman of the Board and CEO
President – Global Benefits
President - Finance and Investments and CFO
President – Global Life
President & Chief Operating Officer Mutual Trust Life Solutions
Executive Vice President – International Markets
Executive Vice President – Operations and Technology
Senior Vice President – Corporate Finance
Senior Vice President – Investments
Senior Vice President - General Counsel and Corporate Secretary
Senior Vice President - Human Resources
Senior Vice President – Chief Technology Officer
Chief Actuary and Risk Officer
Senior Vice President – Sales and Marketing - Mutual Trust Life Solutions
Vice President - Private Client Life Sales and Operations
Vice President - Chief Compliance Officer
Vice President - Corporate Actuary
Vice President - Internal Audit
Vice President – U.S. Group Operations
Vice President – U.S. Group
Vice President – Chief Underwriter International Life
Vice President – Regional Health Operations
Vice President – Financial Reporting, Controller
Vice President - Corporate Administration
Vice President - Chief Information Security Officer
Vice President – Regional Country Management
Deputy Chief Human Resources Officer
Vice President - Corporate Marketing
Vice President – Global Benefits
Vice President – International Group
Vice President – Tax
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Country Manager – Honduras
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Country Manager – El Salvador
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Country Manager – Mexico
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Country Manager – Panama
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Country Manager – Guatemala
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CEO & Managing Director – Caribbean
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Country Manager – Costa Rica
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Country Manager – Colombia
From left to right: Stephen Batza, Carlos Mickan, Sandra K. Johnson, José Suquet, Suzanne T. Mestayer, William H. Hines, Patrick J. Quinlan, Carlos Palomares. Seated from left to right: José Antonio Villamil, Jerry Carlisle.
Member of the Board
since November 2015
Member of the Board
since February 2013
Chair – Organization & Compensation Committee
Member of the Board
since January 2023
Member of the Board
since June 2023
Member of the Board
since November 2017
Member of the Board
since July 2014
Chair – Audit Committee
Member of the Board
since October 2007
Chair - Finance Committee
Member of the Board
since November 2011
Lead Director
Member of the Board
since October 2004
Member of the Board
since November 2010
Chair – Nominating & Governance Committee
In 2023 PALIG welcomed two new Board Members, William “Bill” Hines in January and Dr. Sandra K. Johnson in June.
Mr. Hines is managing partner of Jones Walker, among the largest 135 law firms in the U.S. He is actively involved in the business, cultural, civic, and charitable communities in the New Orleans region.
Dr. Johnson is the Founder & CEO of SKJ Visioneering, a technology consulting company based in North Carolina. She is also a director on the Board of Directors for Regional Management Corporation.
These inspirational leaders are an asset to the PALIG Board, bringing extensive experience, innovative thinking, purpose-driven focus, and expert guidance to continue executing on the company’s growth strategy and preparing PALIG for the future.
Pan-American Life Mutual Holding Company
As of December 31, 2023, 2022, and 2021
$(000)
2023 reflects unaudited financials 2022, 2021 reflects audited financials.
| Revenues | 2023 | 2022 | 2021 |
|---|---|---|---|
| Premiums | 871,488 | 842,411 | 826,206 |
| Policy and contract fees | 150,450 | 124,668 | 109,601 |
| Net investment income | 282,758 | 254,997 | 260,948 |
| Other revenues | 5,815 | 6,509 | 7,665 |
| TOTAL REVENUES | 1,310,512 | 1,228,585 | 1,204,420 |
| Benefits and Expenses | 2023 | 2022 | 2021 |
|---|---|---|---|
| Policyholder benefits and interest credited | 778,912 | 755,404 | 781,397 |
| Underwriting, acquisition, insurance and other expenses | 413,597 | 361,931 | 341,551 |
| Amortization of deferred policy acquistion costs | 40,850 | 43,452 | 38,724 |
| TOTAL BENEFITS AND EXPENSES | 1,233,358 | 1,160,787 | 1,161,672 |
| Income from operations before taxes and noncontrolling interest | 77,154 | 67,798 | 42,748 |
| (Loss) income from discontinued operations net of tax | (2,204) | (28,209) | (4,247) |
| Net realized investment (losses) gains and unrealized losses on equity securities | 1,990 | (9,925) | 18,485 |
| Income tax expense | 8,000 | 10,949 | 8,967 |
| Income after taxes and before noncontrolling interest | 68,940 | 18,715 | 48,019 |
| Noncontrolling interest in income | - | 11 | 22 |
| Net Income | 68,940 | 18,704 | 47,997 |
|---|
Pan-American Life Mutual Holding Company
As of December 31, 2023, 2022, and 2021
$(000)
2023 reflects unaudited financials 2022, 2021 reflects audited financials.
| Assets | 2023 | 2022 | 2021 |
|---|---|---|---|
| Cash and invested assets | 5,426,716 | 5,170,860 | 5,943,645 |
| Deferred policy acquisition costs | 444,813 | 448,544 | 244,876 |
| Other assets | 888,333 | 765,814 | 677,552 |
| TOTAL ASSETS | 6,759,862 | 6,385,218 | 6,866,073 |
| Liabilities and Equity | 2023 | 2022 | 2021 |
|---|---|---|---|
| Future policy benefits and claims | 2,807,575 | 2,784,293 | 2,719,156 |
| Policyholder account balances and funds | 2,312,695 | 2,138,324 | 2,296,590 |
| Other liabilities | 535,425 | 438,973 | 471,809 |
| TOTAL LIABILITIES | 5,655,696 | 5,361,590 | 5,487,555 |
| Equity | 2023 | 2022 | 2021 |
|---|---|---|---|
| Non controlling interests in subsidiaries | (7) | (7) | 4 |
| Unassigned equity | 1,332,316 | 1,279,482 | 1,260,778 |
| Accumulated other comprehensive (loss) income | (228,143) | (255,847) | 117,736 |
| TOTAL EQUITY | 1,104,166 | 1,023,628 | 1,378,518 |
| Total Liabilities and Equity | 6,759,862 | 6,385,218 | 6,866,073 |
|---|
Total GAAP Equity increased 8% during 2023 as a result of Net Income growth as well as an increase in the fair value of investment portfolio.
The 7% growth in revenues during 2023 is the result of premium growth as well as higher Net Investment Income.
Pre-tax operating income in 2023 increased 14% due to higher Net Investment Income as well as improved mortality / morbidity, the latter benefitting from continued reductions in COVID-19 experience.
Net income grew 269% from 2022 to 2023 due to stronger operating earnings, increases in fair value of equity securities, as well as the non-recurrence of Hola Doctor liquidation charges that lowered Net income in 2022.
Our momentum in 2023 fueled our success across regions, lines of businesses and portfolios.
To our relentless leaders who inspired momentum among their teams and ensured it was directed to meet goals and exceed expectations.
To our dedicated colleagues who energized and elevated our work, took action, and kept the momentum going.
To our agents, brokers and business partners who worked together with our teams across the Americas to amplify our momentum.
Your collective efforts ignite, sustain and increase our powerful momentum.