Citizens Inc
Citizens, Inc. (“Citizens”) is an insurance holding company incorporated
in Colorado serving the life insurance needs of individuals in the United States
since 1969 and internationally since 1975. Through our insurance subsidiaries,
we pursue a strategy of offering traditional insurance products in niche markets
where we believe we are able to achieve competitive advantages. Our core insurance
operations include issuing and servicing:
U.S. Dollar-denominated ordinary whole life insurance and endowment policies
predominantly sold to foreign residents, located principally in Latin America
and the Pacific Rim, through independent marketing consultants;
ordinary whole life insurance policies to middle income households concentrated
in the Midwest, Mountain West and southern United States through independent
marketing consultants; and
final expense and limited liability property policies to middle and lower income
households in Louisiana, Mississippi and Arkansas through employee and independent
agents in our home service distribution channel and funeral homes
We were formed in 1969 by our founder, Harold E. Riley. Prior to our formation,
Mr. Riley had many years of experience in the international and domestic life
insurance business. Historically, our Company has experienced growth through
acquisitions in the domestic market and through organic market expansion in
the international market. We strive to generate bottom line return using knowledge
of our niche markets and our well-established distribution channels.
The Company's Board of Directors and executive management team are currently
assessing the Company's business model and business strategies with the assistance
and support of external consultants and advisors. Specifically, we are evaluating
certain elements and assumptions underlying the Company's historical business
model to consider potential changes to align with our risk profile, the current
economic and regulatory environment and sustainable business objectives. Incorporated
in our business model review are analyses of (1) our products and profitability;
(2) a potential restructuring of our international business and operations;
(3) potential upgrades to our technology systems and operations with a strategic
focus on cyber risk and our future business needs; and (4) potential changes
in our executive management structure, personnel needs and compensation incentives.
A prolonged low interest rate period has forced us to revisit the benefits
and dividends included under many policies offered internationally. In many
cases, policy holders stand to benefit from significantly higher guarantees
and dividends than the financial markets might otherwise offer. As such, the
Company has responded to cut discretionary dividends on existing policies and
revisit the structure of new policies sold internationally to better reflect
the prolonged low interest rate environment that we face.
The Company also is revisiting its investment strategies for premiums received
in order to augment its rate of return. By combining more conservative interest
rate features in our insurance policies with a more flexible investment strategy
to manage our investment portfolio, we intend to grow bottom line returns to
shareholders. There is risk that these changes will result in lower demand for
new policies, or that the financial markets will make our investment strategy
more difficult. Despite the risks, the Company believes that such moves are
in the best interest of our shareholders.
Our three business segments: Life Insurance, Home Service and Other Non-Insurance
Enterprises.
Our Life Insurance segment issues ordinary whole life insurance in the United
States and in U.S. Dollar-denominated amounts to foreign residents. These contracts
are designed to provide a fixed amount of insurance coverage over the life of
the insured and can utilize rider benefits to provide additional increasing
or decreasing coverage and annuity benefits to enhance accumulations.
Our domestic Home Service segment operates in this market through our subsidiaries
Security Plan Life Insurance Company ("SPLIC"), Magnolia Guaranty
Life Insurance Company ("MGLIC") and Security Plan Fire Insurance
Company ("SPFIC"), and focuses on the life insurance needs of the
middle and lower income markets, primarily in Louisiana, Mississippi and Arkansas.