Segment Information

9 Months Ended

Sep. 30, 2013

Segment Information

Segment Information

13.   Segment Information

The Company has three reportable segments: Individual Markets, Retirement Services and Other.

Individual Markets

The Individual Markets reporting and operating segment distributes life insurance, annuity and retirement products (including individual retirement accounts (“IRAs”)) to both individuals and businesses through various distribution channels.  Life insurance products in-force includes participating and non-participating term life, whole life, universal life and variable universal life.

Retirement Services

The Retirement Services reporting and operating segment provides various retirement plan products and investment options as well as comprehensive administrative and record-keeping services for financial institutions and employers, which include educational, advisory, enrollment and communication services for employer-sponsored defined contribution plans and associated defined benefit plans.

The retirement plan products and investment options offered by the Company include mutual funds and collective trusts, guaranteed interest rate investment products and variable annuity products designed to meet the specific needs of the customer.  In addition, the Company offers both customized annuity and non-annuity products.

Other

The Company’s Other reporting segment is substantially comprised of the assumption of reinsurance by Great-West Life & Annuity Insurance Company of South Carolina (“GWSC”) from CLAC (“the GWSC operating segment”), corporate items not directly allocated to the other operating segments and interest expense on long-term debt.

The accounting principles used to determine segment results are the same as those used in the consolidated financial statements.  The Company evaluates performance of its reportable segments based on their profitability from operations after income taxes.  Inter-segment transactions and balances have been eliminated in consolidation.  The Company’s operations are not materially dependent on one or a few customers, brokers or agents.

The following tables summarize segment financial information:

	Three months ended September 30, 2013
	Individual			Retirement
	Markets			Services			Other			Total
Revenue:
Premium income	$	120,489		$	1,484		$	15,428		$	137,401
Fee income	20,018			131,103			1,222			152,343
Net investment income	201,727			159,547			13,767			375,041
Realized investment gains (losses), net	(12,797		)	(43,023		)	—			(55,820		)
Total revenues	329,437			249,111			30,417			608,965
Benefits and expenses:
Policyholder benefits	261,716			53,201			19,547			334,464
Operating expenses	33,768			123,810			11,665			169,243
Total benefits and expenses	295,484			177,011			31,212			503,707
Income (loss) before income taxes	33,953			72,100			(795		)	105,258
Income tax expense (benefit)	10,716			22,866			(295		)	33,287
Net income (loss)	$	23,237		$	49,234		$	(500	)	$	71,971

	Three months ended September 30, 2012
	Individual		Retirement
	Markets		Services		Other			Total
Revenue:
Premium income	$	112,109	$	1,742	$	26,181		$	140,032
Fee income	17,909		113,083		1,210			132,202
Net investment income	184,977		102,831		11,867			299,675
Realized investment gains (losses), net	23,679		35,362		—			59,041
Total revenues	338,674		253,018		39,258			630,950
Benefits and expenses:
Policyholder benefits	250,666		52,392		30,664			333,722
Operating expenses	32,007		128,707		17,142			177,856
Total benefits and expenses	282,673		181,099		47,806			511,578
Income (loss) before income taxes	56,001		71,919		(8,548		)	119,372
Income tax expense	18,787		23,731		6,279			48,797
Net income (loss)	$	37,214	$	48,188	$	(14,827	)	$	70,575

	Nine months ended September 30, 2013
	Individual		Retirement
	Markets		Services			Other			Total
Revenue:
Premium income	$	303,073	$	2,669		$	76,338		$	382,080
Fee income	67,393		382,809			3,394			453,596
Other revenue	7,355		—			—			7,355
Net investment income	551,167		320,179			37,660			909,006
Realized investment gains (losses), net	3,957		(69,365		)	13			(65,395		)
Total revenues	932,945		636,292			117,405			1,686,642
Benefits and expenses:
Policyholder benefits	715,691		146,562			82,076			944,329
Operating expenses	107,178		385,039			48,184			540,401
Total benefits and expenses	822,869		531,601			130,260			1,484,730
Income (loss) before income taxes	110,076		104,691			(12,855		)	201,912
Income tax expense (benefit)	38,349		33,509			(4,699		)	67,159
Net income (loss)	$	71,727	$	71,182		$	(8,156	)	$	134,753

	Nine months ended September 30, 2012
	Individual		Retirement
	Markets		Services		Other			Total
Revenue:
Premium income	$	257,868	$	3,608	$	82,034		$	343,510
Fee income	54,806		335,864		3,635			394,305
Net investment income	547,791		309,635		35,516			892,942
Realized investment gains (losses), net	44,469		68,078		34			112,581
Total revenues	904,934		717,185		121,219			1,743,338
Benefits and expenses:
Policyholder benefits	685,510		154,770		88,209			928,489
Operating expenses	98,540		370,064		52,049			520,653
Total benefits and expenses	784,050		524,834		140,258			1,449,142
Income (loss) before income taxes	120,884		192,351		(19,039		)	294,196
Income tax expense	40,605		63,588		3,480			107,673
Net income (loss)	$	80,279	$	128,763	$	(22,519	)	$	186,523