- More than 100 years in business
- $2.3 billion in assets
- Rated A- (Excellent) by A.M. Best
- 4,150 full and regular part-time associates
- 2+ million members or plan participants
- 25+ offices nationwide
Overview of 2018 Consolidated Results*
2018 Consolidated Results
Trustmark generated $33.2 million in reported pretax earnings on consolidated operating revenue of $798.0 million, increases of $900,000 and $24.5 million over 2017, respectively. Revenue was driven by strong sales growth as well as excellent persistency among existing clients in Trustmark Voluntary Benefits, Trustmark Health Benefits and Trustmark Small Business Benefits. Earnings growth in Health Benefits and Small Business Benefits, which increased earnings year over year by 18 percent and 13 percent, respectively, helped offset higher technology project expenses and continued investment in Trustmark Health + Fitness, which launched a new, integrated, customer-facing health engagement platform at the end of 2018.
Consolidated sales totaled $168.0 million, up $24.2 million, or 17 percent, over the prior year, led by Voluntary Benefits, Health Benefits and Small Business Benefits. Sales in Voluntary Benefits increased by $6.2 million, to $90.0 million, representing growth of 7 percent over 2017. In Health Benefits, sales grew by $3.2 million, or 40 percent, to $11.2 million. And in Small Business Benefits, sales of $63.4 million grew by $17.4 million, or 38 percent over the prior year. Health + Fitness sales fell by $2.6 million, to $3.4 million, as prospective clients elected to wait for the introduction of the new engagement platform.
Revenue grew by $24.8 million, or 7 percent, in Voluntary Benefits due to solid sales and persistency. Health Benefits also recorded strong revenue growth, driven primarily by excellent persistency among existing clients and strong partnership revenue, which includes income earned as a percentage of claim savings passed on to clients. Health Benefits revenue of $149.2 million represents 8-percent growth over 2017. Small Business Benefits had an excellent year in terms of both sales and persistency; however, revenue fell by $5.7 million, to $175.6 million, due to an accounting change. Despite slow sales in Health + Fitness as that division focused on launching the new CaféWell health engagement technology platform, retention of current clients led to stable revenue of $102.6 million, down $3.4 million from the prior year.
As noted above, reported pretax earnings were up by nearly 3 percent, year over year, to $33.2 million, led by earnings growth in Health Benefits and Small Business Benefits. Pretax earnings in Voluntary Benefits totaled $25.1 million, down $2.6 million from the prior year, due largely to higher technology expenses. Earnings in these three businesses offset the cost of continued investment in Health + Fitness, ongoing measures to increase information security, including investments to comply with the New York Department of Financial Services Cybersecurity Regulation, and the accounting impact of record sales in Voluntary Benefits, where insurance company statutory accounting rules require that Trustmark deduct all sales acquisition costs in the year the policy is written.
To provide capital for Trustmark’s long-term enterprise technology projects and other investments, Trustmark Life Insurance Company paid a dividend of $17.3 million to Trustmark Insurance Group, Inc. This transaction received approval from the Director of Insurance of the State of Illinois.
Trustmark’s capital and surplus, a key measure of financial strength, increased by $13.0 million in 2018, from $730.7 million to $743.7 million, as strong overall operating results offset unrealized losses in the equity portion of Trustmark’s investment portfolio. The company maintains a conservative debt-to-capital ratio of 10.8 percent, and, as of year-end 2018, an NAIC Risk-based Capital level of 1,085 percent.
On March 13, 2018, independent rating agency A.M. Best affirmed Trustmark’s A- (Excellent) financial strength rating and stable outlook, noting that Trustmark’s ratings “reflect its balance sheet strength, which A.M. Best categorizes as very strong, as well as its adequate operating performance, neutral business profile and appropriate enterprise risk management.”
*All financials represent the consolidation of full-year Statutory Accounting (SAP) results for Trustmark’s insurance companies and Generally Accepted Accounting (GAAP) results for Trustmark’s non-insurance companies for the calendar year ending December 31, 2018.
1 Assets of Trustmark Mutual Holding Company and its insurance company subsidiaries as of Dec. 31, 2018:
– Trustmark Insurance Company: Assets - $1.585 billion; liabilities - $1.223 billion; Trustmark Life Insurance Company: Assets - $319.9 million; liabilities - $143.4 million; Trustmark Life Insurance Company
of New York: Assets - $10.3 million; liabilities - $3.2 million.
2 Capital and surplus of Trustmark Mutual Holding Company and its insurance company subsidiaries, including AVR, as of Dec. 31, 2018:
– Trustmark Insurance Company: Surplus - $362.4 million; assets pledged or on deposit - $63.3 million; Trustmark Life Insurance Company: Surplus - $176.5 million; assets pledged or on deposit -
$3.3 million; Trustmark Life Insurance Company of New York: Surplus - $7.1 million; assets pledged or on deposit - $400,000.