2015 Financial Highlights
Fraternal Expenditures
Dollars in millions
$20.5
$20.0
$19.20
$14.13
$13.5
$12.5
$18.0
$12.0
$17.5
$11.5
$37.27
$13.40
$37
$12.39
$11.51
$15.5
$10.0
$15.0
$9.5
$14.5
$9.0
$14.0
$34.26
$34
$33
$13.0
$8.0
$12.5
$7.5
2011 2012 2013 2014 2015
Fraternal expenditures for the year
reflect strong usage of benefits and
programs by members.
Adding value
$32
$8.5
$13.5
$35.53
$35
$10.5
$16.0
$36.32
$36
$11.0
$16.5
$38.07
$38
$13.0
$18.5
$17.0
Dollars in billions
$14.75
$14.0
$19.03
$19.0
Life Insurance in Force
Dollars in billions
$20.04
$19.72 $19.83
$19.5
Growth in Assets
$31
$30
2011 2012 2013 2014 2015
2011 2012 2013 2014 2015
Modern Woodmen’s increasing asset
base is a strength.
Life insurance in force shows
consistent growth and increased
protection for members.
7%
84
4%
%
Quality Investments
5%
Assets are invested primarily in high-quality, low-risk
investments. As of Dec. 31, 2015, approximately
99.5 percent of bonds were of high or medium quality.
Bonds
Certificate Loans, Cash and Other Assets
Mortgage Loans and Real Estate
Common Stocks
2015 ANNUAL REPORT
Adding value
The numbers in our annual report for 2015 are important.
The financial facts show strength, commitment and the ability
to serve our members for many years to come. But at Modern
Woodmen, we aim to make sure the dollars don’t just add up;
they add value.
The dollars you entrust to our care are invested in your future …
and your children and grandchildren’s future.
• Life insurance and retirement plan benefits for your family.
• Quality-of-life enhancements for your community.
• Personalized service through a local financial representative to
help you make the right decisions for yourself and your future.
• Meaningful local events and fraternal benefits for members.
Our Mission
To improve the quality of life
for our members.
• Upgraded technology and resources to better serve you for the
next decade or longer.
Ever-changing to meet your needs, we remain committed to
providing the service that adds value and makes you a member,
not a customer, of Modern Woodmen of America.
Our Vision
Modern Woodmen of America will grow
nationwide through members helping
members create a better tomorrow for
themselves, their families and others.
Board of Directors
From left to right
Lori A. Newberg | Director, Lenexa, Kansas
William D. Keltner | Director, Jackson, Tennessee
W. Kenny Massey
President and CEO
David B. Emrick | Director, Davenport, Iowa
Robert C. Pollex | Director, Perrysburg, Ohio
Our Creed
There is a destiny that makes us brothers;
None goes his way alone;
All that we send into the lives of others.
Comes back into our own.
Edwin Markham circa 1939
2
2015 Annual Report
W. Kenny Massey
|
President, LeClaire, Iowa
Gary L. Medd | Director, Davenport, Iowa
Jerald J. Lyphout | National Secretary, East Moline, Illinois
Albert T. Hurst Jr. | Director, Little Rock, Arkansas
Darcy G. Callas | Director, Moline, Illinois
Modern Woodmen of America | Adding Value 3
Member activities
Social, educational and volunteer events add value in local communities
Chapters
- 2,791 Modern Woodmen chapters were active nationwide.
Knock Out Hunger
project
- 891,971 members attended the chapters’ family-oriented social, educational and volunteer events.
- 284,005 hours of volunteer service were performed by members through chapters across the nation.
Summit Chapters
- 274 Summit chapters were active in 2015.
- 50,857 members age 55 and older participated in Summit chapter events.
- 11,584 hours of volunteer service were provided to communities through Summit chapters.
Youth Service Clubs
- 746 youth service clubs were active across the nation.
- 142,383 hours of volunteer service were performed by youth club members.
Care and Share/Help A Child Program
- $234,154 was contributed by chapters and youth clubs to help adults,
children and families in need.
Good Neighbors/Community Beautification
- $534,052 was reimbursed for materials chapter and youth club members
used to complete hands-on community-improvement projects.
In America, approximately 1 in 7 households
experiences food insecurity. For American
households with children, the statistic jumps
to nearly 1 in 5.
(USDA Economic Research Service)
Make A Difference Day
- 1,538 volunteer projects were completed on this national day of
community service.
648,000 meals packed
to tackle hunger in America
In total, 648,000 meals were packed by 2,300 Modern Woodmen
volunteers through 67 events – all for one important cause.
In 2016, the Knock Out Hunger project will take on new life
through Modern Woodmen chapters.
4
2015 Annual Report
Contributions to community causes reached
$14.6 million in 2015.
Modern Woodmen’s Matching Fund Program donates
more than dollars to the communities where members
live, work and play. Members like you volunteer through
local chapter, Summit chapter and youth service clubs
to identify local organizations and individuals in need.
Then they help plan and participate in fundraising events,
such as bake sales, barbeques, silent auctions, spaghetti
dinners and more.
Modern Woodmen’s home office matches the money
raised at each qualifying event, up to $2,500, to make
an even bigger impact. In 2015, member chapters and
clubs supported 2,866 fundraising events, helping
contribute a total of $14.6 million.
- $75,371 was reimbursed for materials.
Matching Fund Program
- 2,866 fundraising events were held.
Over the past two years, Modern Woodmen has organized
meal-packing events with employees and financial
representatives throughout the country in an effort to address
food insecurity in the United States.
Matching Fund Program
- $14.6 million was contributed to community projects, local organizations
and individuals in need.
Plant A Tree Program
- 1,417 trees were planted by chapter and youth club members.
Youth Educational Programs
- 1.3 million children participated in 22,424 programs on exercise
and nutrition, financial literacy, and more.
Make an impact
It’s never been more fun to be a Modern
Woodmen member!
Through Modern Woodmen’s Make An Impact initiative,
we’re offering a wider variety of activities to help you and
your family volunteer, socialize and learn with Modern
Woodmen.
Enjoy meaningful, hands-on fraternal opportunities in
your community by participating in a Modern Woodmen
chapter, Summit chapter or youth service club event.
Join us for one event, or every event! And let your local
leaders know what fun ideas you have to make an impact
in your area.
Modern Woodmen of America | Adding Value 5
Member benefits
Fraternal benefits add value for individuals and families
Carbon Monoxide Detection Kit
- 4,270 kits were distributed to help members detect this potentially
deadly gas in their homes.
College Scholarship Program
- $441,000 was awarded to 260 member students.
Final Wishes
- 2,491 members received the Final Wishes interactive resource containing resources to help them plan for and communicate their final wishes
to loved ones.
New Anytime Fitness® benefit
Discounts on enrollment fees and dues
Fraternal Aid Fund
- $174,922 in premiums were paid on 1,219 certificates for members who experienced hardships due to medical, fire or natural disasters.
Life Line Screening Program
- 2,083 members ages 50 to 80 participated in a Life Line Screening in their local communities.
MedicAlert Membership
- $4,740 in initial membership fees were paid for participants in this life-
saving identification program.
Modern Woodmen members can now receive
discounted access to more than 2,100 Anytime Fitness®
centers nationwide. You can receive a 50 percent
discount on enrollment fees and a 10 percent discount
on monthly dues.
Facilities are open 24 hours a day, seven days a week.
After joining, members can use any Anytime Fitness
facility across the nation at no extra cost. Modern
Woodmen members can also receive a free seven-day
guest pass.
National Park Pass
- 25 members received partial reimbursement of fees associated with the America the Beautiful National Parks and Federal Recreation Lands Senior Pass.
Newborn Benefit
- $50,000 of life insurance was issued to parents of infants in poor health.
Benefits
for all ages
Modern Woodmen offers a variety of
fraternal member benefits relevant
to today’s members for all life stages.
Orphan Benefit
- $85,550 in financial support benefited 28 orphaned members for their
care and education.
100 Percent Modern Woodmen
Family Benefit
- 12,298 qualifying children ages 1 to 16 received a free
age-appropriate book for their birthdays.
Accelerated Benefits
- $88,166 in premiums and interest were paid for terminally
ill members.
Beltone Hearing Care
- Two members took advantage of the discounts and
services provided by Beltone.
6
2015 Annual Report
Prescription Savings Card
- 10,860 prescriptions were filled for members without access to preferred prescription drug pricing.
- $28.85 was the average savings per prescription.
Fraternal Aid Fund
Benefit preserves coverage in time of need
Flooding in South Carolina and along the Mississippi
River in 2015 was devastating. It’s also the type of
disaster Modern Woodmen’s Fraternal Aid Fund was
designed to, and did, help members endure.
Members who suffer a financial hardship due to serious
illness, an accident, fire or natural disaster may qualify
for premium payment assistance. For a limited time,
Modern Woodmen will cover qualifying members’
premiums to help them keep valuable life insurance
coverage in force. Requests are granted on the basis
of need and the inability to pay premiums.
- $200,864 was the total savings for members in 2015.
Children and adolescents
Families
Single adults
50 and older
Modern Woodmen of America | Adding Value 7
Products
Modern Woodmen can help you meet a wide
range of financial needs with the help of a wide
range of financial products.
Life insurance products
• Whole life insurance
• Universal life insurance
• Term life insurance
Annuity products
• Fixed annuities
• Immediate annuities
• Variable annuities1
Investment products1
• Mutual funds
• Retirement plans – Traditional IRA, Roth IRA,
SEP-IRA, SIMPLE IRA, 401(k), 403(b) TSA
• College savings plans – 529 college savings plans, Coverdell education savings accounts,
UGMA/UTMA accounts
• Brokerage services
Insurance products
• Dental and vision insurance
• Disability income insurance
• Group employee benefits
• Group voluntary benefits
• Impaired risk life insurance
• International life and health insurance
• Long-term care insurance
• Health insurance
• Medicare supplement insurance
•Medicare Advantage and prescription drug plans
2
Protection for life,
not payments for life
At Modern Woodmen, it’s not about selling products. It’s about
meeting needs. We believe those needs – including the need for
life insurance protection – last throughout life.
That’s why we place a strong emphasis on permanent coverage.
Regardless of your age or changes in your health, you can have
peace of mind knowing your coverage will be there when your
family needs it most.
However, we don’t expect you to pay throughout your life.
Our whole life insurance plans allow you to lock in affordable
premiums for life or choose from a variety of limited-pay
options. Pay off your coverage before your kids go to college
or before retirement. Or pay it all at once in a single premium.
Your coverage. Your choice.
Banking products3
• Checking accounts
• Savings accounts
• Certificates of deposit
• First mortgage home loans (new purchases
and refinancing included)
• Home equity loans
• Visa® credit cards and gift cards
Securities offered through MWA Financial Services Inc., a wholly owned subsidiary of Modern Woodmen of America. Member: FINRA, SIPC.
1
Individual agents may not be licensed to sell all products.
Not issued by Modern Woodmen of America. Brokered insurance
products available through MWAGIA Inc., a Modern Woodmen subsidiary. Product availability varies by state.
2
3
Modern Woodmen Bank is a marketing name for MWABank, a wholly owned subsidiary of Modern Woodmen of America. Annuities, insurance, retirement plans, mutual funds and other securities are not insured by the FDIC or any other federal government agency, are not obligations or deposits for MWABank, and are not guaranteed by MWABank.
These products involve risk, including the possible loss of principal invested. MWABank is an Equal Housing Lender.
8
2015 Annual Report
Modern Woodmen of America
builds on financial and fraternal strength in 2015
In 2015, Modern Woodmen of America continued to grow its financial and fraternal successes. The fraternal financial
services organization reports that life insurance in force grew by more than $800 million for the fifth straight year,
and assets reached $14.8 billion. Additionally, Modern Woodmen contributed $19.2 million to communities nationwide
through its fraternal member benefits and programs last year.
“At Modern Woodmen, we proudly serve members for life,”
says W. Kenny Massey, president and CEO of Modern Woodmen.
“Our members value Modern Woodmen’s financial stability and
fraternal offerings.”
Continued growth in life insurance in force
Life insurance in force, the total amount of life insurance owned
by members to protect their families in case of premature death,
increased to $38.1 billion.
“Life insurance should be the cornerstone of every financial plan,
because it offers valuable protection for the unexpected,” says Massey.
“Our financial representatives work hard to give customized advice
on the best product options, such as buying permanent coverage
without making permanent payments.”
Assets reach $14.8 billion
Modern Woodmen’s assets increased 4.4 percent from 2014,
reaching $14.8 billion. The organization’s assets are primarily invested
in high-quality, low-risk corporate and government bonds.
“First and foremost, Modern Woodmen is fiscally responsible,”
said Massey. “We manage our investments in a way that carefully
protects our promises to members.”
Annuity assets under management equaled $8.5 billion.
Total life insurance, annuity and other certificate reserves,
which are funds held to guarantee future benefits to members,
increased 4.3 percent to more than $11 billion.
Strong operational results
Total premium income in 2015 was $1.05 billion. Compared to 2014,
variable annuity certificate sales increased 22 percent, and variable
annuity premiums increased by 26.4 percent.
Payments and benefits to members in 2015 totaled nearly
$837 million. This includes death benefits, annuity payments and
surrender benefits. An additional $9.3 million in dividend
payments was refunded to life insurance and annuity certificates.
Net gain from operations after dividends was nearly $38 million,
with a total net income of $50.3 million.
Total surplus and special reserves were nearly $1.6 billion in 2015.
Surplus and special reserves provide additional safety for members
and ensure Modern Woodmen’s ability to meet unforeseen events,
continue the organization’s fraternal programs and provide funds
for future growth.
Modern Woodmen has a solvency ratio of 112.09 percent. This means
that for every $100 of liabilities (promises made to members),
Modern Woodmen has $112.09 of assets to back up those promises.
In comparison to Modern Woodmen’s strength, the industry
average is a solvency ratio of 105.65, or $105.65 of assets for every
$100 of liabilities. This is calculated from the 25 leading life insurance
companies by assets. (Standard Analytical Service, Inc., 2015)
Fraternal programs support communities nationwide
Modern Woodmen’s national membership totals more than
765,000 members. In 2015, Modern Woodmen contributed more
than $19.2 million to support family-oriented member benefits
and programs. These benefits and programs include disaster relief
assistance, college scholarships, social and volunteer service
programs by adult chapters and youth service clubs nationwide,
and educational programs for schools and youth groups.
Fraternal highlights from 2015 include:
•Regional Modern Woodmen offices across the United States organized and participated in 66 meal-packing events with
more than 1,700 financial representatives and family members,
who packed 598,000 meals for 247 food pantries. The events were
a continuation of Modern Woodmen’s 2014 Knock Out Hunger project, in which home office employees donated 50,000 meals
to a nearby food bank.
•Modern Woodmen members are part of 2,791 adult chapters,
274 Summit chapters (for members age 55 and older) and
746 youth service clubs. More than 1 million people attended
social, educational and volunteer events sponsored by chapters
and clubs.
•Youth service club members recorded more than 142,000 hours
of volunteer service; chapter and Summit chapter members
recorded nearly 300,000 hours of service.
•1.3 million children benefited through participation in Modern Woodmen’s free youth educational programs.
•Modern Woodmen members helped raise $14.6 million in total contributions through the organization’s Matching Fund Program. The proceeds benefited families and organizations in need in members’ communities.
Modern Woodmen of America | Adding Value 9
Financial statements
Modern Woodmen of America – Year ended Dec. 31, 2015 (dollars in thousands) unaudited
STATEMENT OF OPERATIONS
STATEMENT OF CASH FLOWS
Income:
Cash from operations:
2015 2014
Premiums and other considerations:
Premium and annuity considerations
$1,054,369 $1,066,911
Life and annuities
Investment income, net
4,068 4,113
Other
Other income
565,383
564,832
Investment income, net of expenses
Total cash received from operations
Amortization of interest maintenance reserve 11,287 20,481
9,994
Other income
Total income
1,645,101
Benefits and expenses:
Benefits:
824,622
Life and annuities
12,105
Other
489,947
Increase in certificate reserves
Employees’ and fieldworkers’ benefit plans5,524
63,428
Commissions
117,560
General insurance expenses
7,380
Insurance, taxes, licenses and fees
19,200
Fraternal expenses
Net transfers to or (from) Separate Accounts58,125
Total benefits and expenses
Net gain from operations before dividends to
certificateholders and net realized capital gains
Dividends to certificateholders
Net gain from operations before net
realized capital gains
Net realized capital gains
BALANCE SHEETS
Net income
Liabilities and Surplus
Assets
2015
Investments:
$11,941,085
Bonds
2014
$11,303,244
Common stocks
745,126 829,983
Mortgage loans
489,386 494,246
26,014
Real estate and home office property
Cash and short-term investments
27,930
126,386 100,018
171,210
Certificateholders’ loans
176,383
465,676 471,720
Securities lending reinvested collateral
295,220
Other invested assets
Total investments
14,260,103
Investment income due and accrued
Separate account assets
Total assets
10
2015 Annual Report
13,692,436
128,731 124,374
Electronic data processing equipment
Other assets
288,912
2,992 3,805
2,720 4,622
359,968 305,868
$14,754,514
$14,131,105
2015
Liabilities:
Aggregate reserves for certificates and contracts:
$11,787,522
Life and annuity
2,536
Accident and health
36,885
Certificate and contract claims
3,540
Other certificateholders’ funds
9,100
Dividends payable to certificateholders
3,671
Accrued commissions, general expenses and taxes
465,676
Payable for securities lending collateral
165,789
Other liabilities
53,032
Liability for employees’ and fieldworkers’ benefits
35,958
Interest maintenance reserve
239,586
Asset valuation reserve
Separate account liabilities 359,968
2014
1,597,891 1,630,122
47,210 30,955
9,294 14,758
37,916 16,197
12,375 69,183
$50,291
$85,380
$104,108
STATEMENT OF SURPLUS
2015 2014
Appropriated:
12,652,059
278,776
1,312,475
277,015
1,202,031
Total surplus
1,591,251
$14,754,514
Total liabilities and surplus
792,422
10,990
582,149
3,134
64,010
101,759
6,885
19,032
49,741
$11,292,932
2,649
20,409
5,518
14,600
7,599
471,720
152,461
50,329
32,488
295,486
305,868
13,163,263
1,661,077
1,479,046
$14,131,105
$277,015
$274,300
1,761
2,715
278,776
277,015
1,202,031
1,241,144
Net income from operations
50,291
85,380
Net unrealized capital gains
(28,580)
5,897
Change in asset valuation reserve
55,900
(40,828)
Change in nonadmitted assets
(9,526)
12,408
Balance at beginning of year
Transfer from unassigned surplus
Balance at end of year
Unassigned:
Balance at beginning of year
Transfer to appropriated surplus
(1,761)
(2,715)
Other changes, net
44,120
(99,255)
1,312,475
1,202,031
$1,591,251
$1,479,046
Balance at end of year Total surplus
2015
$1,056,454
559,090
9,993
2014 $1,068,888
1,625,537
562,289
4,545
1,635,722
Benefit and loss related payments
Commissions and other expenses paid
Net transfers to or (from) Separate Accounts
810,947
204,078
60,769
796,859
212,916
52,882
Dividends paid to certificateholders
14,794
14,557
1,090,588
Total cash paid from operations
Net cash from operations
534,949
1,077,214
558,508
Cash used in investments:
Proceeds from investments sold or matured:
1,140,996
1,097,061
Bonds
147,080 96,064
Stocks
44,823 70,903
Mortgage loans
0 0
Real estate
59,899 45,305
Other invested assets
6,045 27,083
Miscellaneous proceeds
Total investment proceeds
Cash applied, cost of investments acquired:
Bonds
Stocks
Mortgage loans
Real estate
Other invested assets
Miscellaneous applications
1,398,843
1,336,416
1,763,765
89,502
39,967
28
51,955
1,638,616
167,341
3,936
0
51,786
0
1
1,945,217
1,861,680
Net increase in certificate loans and liens
(5,095)
(7,100)
(541,279) (518,164)
(2,239)
38,105
61,913
Total liabilities Surplus:
Appropriated
Unassigned
4,740
Total investment applications
Net cash used in investments
Other cash provided by (used in) financing
activities and other miscellaneous sources
Increase (decrease) in cash and
short-term investments
26,368
100,018
Cash and short-term investments,
beginning of year
Cash and short-term investments, end of year
32,698
$126,386
$100,018
Modern Woodmen of America | Adding Value 11