2015 Annual Report
A message from our CEO

2015 marked another zenith in the transformation of Pan-American Life as we continued to build on our already strong core businesses while also strengthening our position in the United States with the completion of the merger of Pan-American Life Mutual Holding Company and Mutual Trust Holding Company. The addition of Mutual Trust Life Insurance Company, a premier provider of high-value life insurance and services, complements Pan-American Life’s presence in our three high-growth businesses, International Group, International Life and U.S. Group, while giving us a new source of U.S. focused growth in the life insurance business through mass affluent markets.

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Today Pan-American Life is stronger than ever, and our financial and operational performance reflects that across the board. In 2015 PALIG revenues grew 14 percent to reach an all-time high of $800 million. GAAP pre-tax operating earnings, exclusive of the one-time Mutual Trust Financial Group (Mutual Trust) merger costs, grew 17 percent to $80 million. Net income for the year was $30 million compared to $54 million in 2014 as a result of the one-time Mutual Trust merger costs and taxes associated with one-time capital repatriations from affiliates. Including Mutual Trust, the Group also saw its total assets grow 69 percent over prior year to $5.5 billion and its total equity increase 25 percent to $837 million.

Our record revenues were attributable to strong performance and organic growth across all lines of business that led to a 15 percent increase in gross premium and a 10 percent gain in new sales. The International Life business ended the year with $43 million in new sales, a record high that represents 10 percent annual growth. International Group sales increased 13 percent, while the U.S. Group business grew 6 percent for the year. These accomplishments are the result of a clear strategic plan that aims to capitalize on PALIG’s distinctive brand and market strengths to derive superior value and the impeccable operational execution delivered by our strong team across every business unit.

Last year we sustained our emphasis on innovation throughout the company while also strengthening the foundation of our core business. Among other highlights, International Life introduced a new agency distribution model to Colombia and enhanced the Personal Accident product offering; International Group continued the expansion of PALIG’s proprietary regional medical network - PALIGMED, invested in additional growth initiatives to support the ongoing success of our Mexico affiliate, and launched a new individual health product in Costa Rica; U.S. Group expanded its sales team, added additional coverages to the Accident product portfolio and delivered strong new account sales in employee benefits and Major Medical Stop Loss; while the U.S. Life business increased the dividend scale in 2016 - extending a history of paying dividends that dates to 1909 - and grew the distribution force to include over 6,600 licensed agents. As part of our Enterprise Risk Management initiatives we also expanded our already strong investment capabilities to support management of additional assets and invested in leadership development programs to deepen our talent pool.

We have a stronger portfolio characterized by a well-balanced split between our life and health lines of business as well as between our U.S. and International operations. This, combined with an incomparable executive leadership team, ensures that we are well positioned to continue achieving our business objectives and delivering on our promises.

After completing the merger with Mutual Trust, we established four core business units that will pave the way for future growth. Stephen Batza, the former head of Mutual Trust, is now President of PALIG’s U.S. Life Business and President and CEO of Mutual Trust Life Insurance Company, which operates as a wholly-owned subsidiary of PALIG; Bruce Parker, is now President of Pan-American Life’s International Life Business; Robert DiCianni is President of Pan-American Life’s International Group Business; and John Foley is President of Pan-American Life’s U.S. Group Business.

I am pleased to say that in 2015 Carlos Mickan, who has played an integral role in PALIG’s transformation over the last decade in his position as Chief Financial Officer, also assumed the role of Vice Chairman of the Board. Additionally, Patrick Fraizer, whose expertise in mergers and acquisitions has been invaluable in making Pan-American Life a bigger and stronger company, was appointed Executive Vice President and added the role of Chief Compliance Officer to his duties as General Counsel and Corporate Secretary.

Also contributing to PALIG’s continued strength are three new board members: Stephen Batza; Martha O. Hesse, former President of Hesse Gas Company; and Daniel P. Mulheran, former President of Individual Life Distribution for ING in the United States.

As I look forward to the coming year, I am encouraged by the strong enthusiasm across our entire organization for the strategic path that PALIG is following. This enthusiasm carries over into how we serve our clients, work with our business partners and tackle new initiatives and opportunities. Chief among our plans for 2016 are the integration of the PALIG and Mutual Trust operations; the introduction of new products to the U.S. Life market; the development of additional drivers for U.S. Benefits growth; the expansion of the Group and Credit Life business in Mexico, Colombia and the Caribbean; the launch of a new compliance initiative; and the implementation of a new administration system to support U.S Life operations.

PALIG is in a stronger position than ever and we are confident that we can aim even higher in 2016. I have no doubt that we have the products, management team and organization to take us to the next level. I look forward to our future success and accomplishments.

José S. Suquet
Chairman of the Board, President and CEO

View our complete 2015 Annual Report.

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Annual Report Highlights

2015 was a milestone year for Pan-American Life Insurance Group. Pan-American Life Mutual Holding Company and Mutual Trust Holding Company completed their merger in October.

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"A" Rated Financial Strength

Pan-American Life Insurance Company
A.M. Best: A (Excellent)
Fitch Ratings: A (Strong)

Mutual Trust Life Insurance Company
A.M. Best: A (Excellent) – view report*
Fitch Ratings: A (Stable)

PALIG's Financial Summary

As of December 31, 2015
(GAAP in thousands)

Total Equity: $831,000
Pre-Tax Operating Income: $54,300
Net Income: $30,000
Revenue: $800,000

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Form No. 190