Segment Information

6 Months Ended

Jun. 30, 2019

Management organizes the business into five operating segments:


•	Life—consists of whole, term, universal, indexed and variable life insurance. Products are primarily sold through career, multiple-line, and independent agents as well as direct marketing channels.


•	Annuity—consists of fixed, indexed, and variable annuity products. Products are primarily sold through independent agents, brokers, and financial institutions, along with multiple-line and career agents.


•	Health—consists of Medicare Supplement, stop loss, other supplemental health products and credit disability insurance. Products are typically distributed through independent agents and managing general underwriters.


•	Property and Casualty—consists of personal, agricultural and targeted commercial coverages and credit-related property insurance. Products are primarily sold through multiple-line and independent agents or managing general agents.


•	Corporate and Other—consists of net investment income from investments and certain expenses not allocated to the insurance segments and revenues and related expenses from non-insurance operations.

The accounting policies of the segments are the same as those described in Note 2 of American National’s 2018 annual report on Form 10-K. All revenues and expenses specifically attributable to policy transactions are recorded directly to the appropriate operating segment. Revenues and expenses not specifically attributable to policy transactions are allocated to each segment as follows:


•	Recurring income from bonds and mortgage loans is allocated based on the assets allocated to each line of business at the average yield available from these assets.


•	Net investment income from all other assets is allocated to the insurance segments in accordance with the amount of capital allocated to each segment, with the remainder recorded in the Corporate and Other segment.


•	Expenses are charged to segments through direct identification and allocations based upon various factors.

The results of operations measured as the income before federal income tax and other items by operating segments are summarized below (in thousands):



	Three months ended June 30, 2019
										Property			Corporate
	Life			Annuity			Health			& Casualty			& Other			Total
PREMIUMS AND OTHER REVENUES
Premiums	$	86,087		$	56,222		$	42,224		$	371,739		$	—		$	556,272
Other policy revenues	70,610			4,536			—			—			—			75,146
Net investment income	63,916			155,355			2,376			16,706			19,377			257,730
Net realized investment losses	—			—			—			—			(9,905		)	(9,905		)
Net gains on equity securities	—			—			—			—			67,060			67,060
Other income	469			574			5,534			2,830			967			10,374
Total premiums and other revenues	221,082			216,687			50,134			391,275			77,499			956,677
BENEFITS, LOSSES AND EXPENSES
Policyholder benefits	104,462			72,788			—			—			—			177,250
Claims incurred	—			—			26,708			271,608			—			298,316
Interest credited to policyholders’ account balances	15,197			108,490			—			—			—			123,687
Commissions for acquiring and servicing policies	40,881			23,139			8,692			68,583			—			141,295
Other operating expenses	46,669			13,349			10,707			49,681			9,127			129,533
Change in deferred policy acquisition costs	(9,205		)	(4,369		)	(146		)	(3,588		)	—			(17,308		)
Total benefits, losses and expenses	198,004			213,397			45,961			386,284			9,127			852,773
Income before federal income tax and other items	$	23,078		$	3,290		$	4,173		$	4,991		$	68,372		$	103,904



	Three months ended June 30, 2018
									Property			Corporate
	Life			Annuity			Health		& Casualty			& Other		Total
PREMIUMS AND OTHER REVENUES
Premiums	$	84,595		$	67,228		$	48,870	$	360,047		$	—	$	560,740
Other policy revenues	67,231			3,907			—		—			—		71,138
Net investment income	61,082			148,710			2,263		15,493			19,193		246,741
Net realized investment gains	—			—			—		—			5,007		5,007
Net gains on equity securities	—			—			—		—			57,162		57,162
Other income	512			631			6,809		2,264			1,067		11,283
Total premiums and other revenues	213,420			220,476			57,942		377,804			82,429		952,071
BENEFITS, LOSSES AND EXPENSES
Policyholder benefits	96,958			82,103			—		—			—		179,061
Claims incurred	—			—			32,310		280,126			—		312,436
Interest credited to policyholders’ account balances	21,046			84,685			—		—			—		105,731
Commissions for acquiring and servicing policies	39,391			30,355			9,126		70,865			—		149,737
Other operating expenses	48,189			11,853			10,090		45,166			8,649		123,947
Change in deferred policy acquisition costs	(7,249		)	(8,811		)	506		(4,562		)	—		(20,116		)
Total benefits, losses and expenses	198,335			200,185			52,032		391,595			8,649		850,796
Income (loss) before federal income tax and other items	$	15,085		$	20,291		$	5,910	$	(13,791	)	$	73,780	$	101,275



	Six months ended June 30, 2019
									Property			Corporate
	Life			Annuity			Health		& Casualty			& Other			Total
PREMIUMS AND OTHER REVENUES
Premiums	$	172,555		$	96,129		$	80,905	$	742,920		$	—		$	1,092,509
Other policy revenues	140,854			8,540			—		—			—			149,394
Net investment income	132,672			346,066			4,796		31,728			34,814			550,076
Net realized investment losses	—			—			—		—			(6,958		)	(6,958		)
Net gains on equity securities	—			—			—		—			273,437			273,437
Other income	1,145			1,263			10,919		5,552			3,033			21,912
Total premiums and other revenues	447,226			451,998			96,620		780,200			304,326			2,080,370
BENEFITS, LOSSES AND EXPENSES
Policyholder benefits	213,927			131,549			—		—			—			345,476
Claims incurred	—			—			52,475		509,752			—			562,227
Interest credited to policyholders’ account balances	35,516			229,405			—		—			—			264,921
Commissions for acquiring and servicing policies	78,623			50,005			15,570		135,742			—			279,940
Other operating expenses	95,647			25,823			21,699		101,566			18,408			263,143
Change in deferred policy acquisition costs	(14,040		)	(7,389		)	661		(3,171		)	—			(23,939		)
Total benefits, losses and expenses	409,673			429,393			90,405		743,889			18,408			1,691,768
Income before federal income tax and other items	$	37,553		$	22,605		$	6,215	$	36,311		$	285,918		$	388,602



	Six months ended June 30, 2018
									Property			Corporate
	Life			Annuity			Health		& Casualty			& Other		Total
PREMIUMS AND OTHER REVENUES
Premiums	$	165,971		$	137,844		$	89,885	$	712,020		$	—	$	1,105,720
Other policy revenues	134,962			7,515			—		—			—		142,477
Net investment income	118,850			262,190			4,617		31,354			38,399		455,410
Net realized investment gains	—			—			—		—			6,051		6,051
Net gains on equity securities	—			—			—		—			23,992		23,992
Other income	1,267			1,356			11,966		4,327			2,880		21,796
Total premiums and other revenues	421,050			408,905			106,468		747,701			71,322		1,755,446
BENEFITS, LOSSES AND EXPENSES
Policyholder benefits	195,504			166,849			—		—			—		362,353
Claims incurred	—			—			60,450		522,616			—		583,066
Interest credited to policyholders’ account balances	37,311			138,965			—		—			—		176,276
Commissions for acquiring and servicing policies	78,911			60,359			15,142		140,021			—		294,433
Other operating expenses	99,139			23,172			20,448		92,967			18,615		254,341
Change in deferred policy acquisition costs	(13,692		)	(17,684		)	1,594		(7,300		)	—		(37,082		)
Total benefits, losses and expenses	397,173			371,661			97,634		748,304			18,615		1,633,387
Income (loss) before federal income tax and other items	$	23,877		$	37,244		$	8,834	$	(603	)	$	52,707	$	122,059