ROANOKE TIMES
Copyright (c) 1996, Roanoke Times
DATE: Monday, February 19, 1996 TAG: 9602190021
SECTION: BUSINESS PAGE: A-6 EDITION: METRO
SOURCE: MAG POFF STAFF WRITER
THE 80TH ANNUAL MEETING of policyholders elected three directors to new three-year terms.
Shenandoah Life Insurance Co. said Friday it earned $8.9 million last year, the highest income reported in the company's history.
The announcement was made at Hotel Roanoke and Convention Center at the Roanoke-based company's 80th annual meeting of policyholders. Shenandoah Life is a mutual insurance company, meaning its policyholders are its legal owners.
They elected three directors to new three-year terms: Warner Dalhouse of Roanoke, board chairman of First Union National Bank of Virginia; Joseph H. Vipperman of Columbus, Ohio, executive vice president-energy delivery at American Electric Power Service Corp.; and Henry C. Wolf of Norfolk, executive vice president-finance at Norfolk Southern Corp.
Dalhouse is Shenandoah Life's board chairman.
The directors were unanimously elected by the 57 policyholders who voted at the breakfast meeting. There were no votes by proxy.
Robert W. Clark, president of Shenandoah, reported that the company's operating gain before capital gains and federal income taxes was $15 million, an increase of 85 percent from 1994.
All of the major lines of insurance that the company sells contributed to the gain, he said. Individual life and health policies contributed $7.6 million, group insurance contributed $4.8 million, and annuities contributed $2.6 million.
Total revenue was $165.6 million, down 2 percent from the previous year, caused by slower than expected growth in the annuity line of business. Clark said this is a nationwide trend caused by decreased interest rates and the attraction of the rising stock market for investment money.
Clark said net investment income was up 7.9 percent, and last year's yield on invested assets was 8.3 percent. In 1996, Clark warned in the company's annual report, "we expect our operating environment to include lower investment yields, higher federal income taxes, average mortality, and increased operating expenses" related to technology.
Clark said Shenandoah Life is engaged in a $4.2 million program to automate its operations over the next three years.
The quality of the company's investment portfolio is among the best in the industry, he said, with 98 percent of bonds rated investment grade, less than 3 percent of mortgages delinquent or foreclosed and no derivatives.
For the last three years, Clark said, the company's common stock portfolio has produced an average annual return of 23 percent vs. 15 percent for the Standard and Poor's 500 index.
Shenandoah's assets increased 4.3 percent to $687 million. Clark said total surplus at the end of last year was $64.9 million, an increase of 17.8 percent from 1994. The company's surplus-to-liabilities ratio is 10.4 percent, the highest in more than a decade.
For the coming year, Clark said, the company is planning to introduce a new annuity portfolio and a new product in term life insurance.
LENGTH: Medium: 63 lines ILLUSTRATION: PHOTO: WAYNE DEEL/Staff. Shenandoah Life President Robert W.by CNBClark (left) talks with Joseph H. Vipperman before the annual
meeting of policyholders Friday morning.