Dear Fellow Policyholders and Friends,

In 2020, the COVID-19 pandemic overtook all of our lives, presenting unprecedented medical, economic and human challenges. It’s been a year unlike any other in modern history. During my 45-year tenure in the financial services industry, I’ve never experienced a crisis of this proportion – one that forced us to adapt to a drastically different operating environment nobody could have anticipated when the year began. We were hurled into the worst recession since the 1930s. Unemployment peaked at 14.7% in April and the U.S. economy suffered its poorest period ever in the second quarter with GDP falling by 32.9%. Interest rates fell precipitously – the 10-year U.S. Treasury rate began the year at 1.92% and hit a low of 0.52% in early August.

Although faced with a very difficult situation, I want to discuss how three of our corporate values have helped us navigate this period and lay the groundwork for greater success in the future....

The first value I want to highlight is Integrity. In Assurity’s Mission & Values Statement, it is defined as: “doing what’s right; being transparent, worthy of trust and of unquestioned financial strength.”

In 2020, the company celebrated its 130th year in operation. Since 1890, we have continually built our financial strength so we are there when our policyholders need us the most. In 2020, despite the pandemic, we added to our financial strength. Our capital grew by 7.6% to a record $417.3 million. Our capital to asset ratio was at a record high, and our risk-based capital ratio was a robust 583%.

While the economy experienced a severe contraction, our investment portfolio performed very well. Unlike many in our industry, we booked net positive capital gains. Our financial strength at the end of 2020 was the strongest in our 130-year history.

The second value I want to highlight is Connectedness, which we define as “emotional engagement with customers and coworkers.”

As a mutual insurance organization, we are rooted in the simple concept of people coming together to help protect one another in times of need. The pandemic has made real for so many of us the need for financial protection due to the vicissitudes of life. 2020 humbled us in so many ways. It reminded us the future is unpredictable. Although we feel so badly for the families who have experienced loss, we were proud to have provided benefits to our policyholders of almost $137 million. This exceeds our 2019 benefit payments by over $15 million. Unfortunately, the pandemic has caused an unprecedented loss of life in our country. We cannot erase the pain and suffering many have experienced this year, but we can help people get through these difficult times by helping to ease their financial burden.

The final value I want to highlight is Agility. It reads as follows: “nimbleness; ability to act quickly and decisively.”

We truly lived this value in 2020. We believe the advantage always goes to nimble companies that are able to transform themselves. As the pandemic took hold last March, we wanted to protect our associates, so we transitioned to having 90% of them work from home. Fortunately, we had previously invested in the technology to make this possible.

Much has been written about COVID-19 accelerating the pace of change. It caused businesses to accelerate their digital and online plans. It did for us at Assurity as well. We developed new ways to accomplish our work and provide continued good service to our policyholders and distributors. We have also accelerated our plans to provide our policyholders and distributors a complete digital experience. As Andy Grove, the much-celebrated CEO of Intel, once said, “Bad companies are destroyed by crises; good companies survive them, and great companies are improved by them.” At Assurity, the coronavirus pandemic has improved us.

2020 represented my 30th year with the company, 25 of which as CEO. Our board of directors and I have worked closely over time to ensure we have a thoughtful plan in place to identify my successor. In 2021, we have initiated this plan.

I am proud and thankful for the way the entire Assurity team stepped up in 2020 to address this crisis. Our focus was to meet our customers’ needs while keeping our associates safe and supporting our community during these challenging times. I’m pleased we were able to accomplish this while positioning the company for greater success in the years ahead.

Sincerely,

Thomas E. Henning
CLU, ChFC, CFA
Chairman, President, CEO

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