GALVESTON, TX – American National Insurance Company (NASDAQ: ANAT) announced that net income for the fourth quarter of 2019 increased to $171.1 million or $6.37 per diluted share, compared to a net loss of $117.4 million or $4.37 per diluted share for the same period in 2018. The increase in net income for the fourth quarter of 2019 was to a large extent attributable to an after-tax net gain on equity securities of $111.0 million or $4.13 per diluted share due to favorable equity market conditions during this period. In comparison, unfavorable equity market returns during the fourth quarter of 2018 produced an after-tax net loss of $203.6 million or $7.57 per diluted share in that period. In addition, net income for the fourth quarter of 2019 also included after-tax net realized investment earnings of $5.5 million or $0.21 per diluted share compared to $11.9 million or $0.44 per diluted share for the same period in 2018.
Net income for the twelve months ended December 31, 2019 was $620.4 million or $23.07 per diluted share, up from $159.0 million or $5.91 per diluted share for the same period in 2018. Net income for the twelve months ended December 31, 2019 included an after-tax net gain on equity securities of $333.8 million or $12.41 per diluted share compared to an after-tax net loss on equity securities of $84.7 million or $3.15 per diluted share for the same period in 2018. In addition, net income for the twelve months ended December 31, 2019 also included after-tax net realized investment earnings of $94.7 million or $3.52 per diluted share compared to $28.8 million or $1.07 per diluted share for the same period in 2018. The increase in after-tax net realized investment earnings was primarily due to the sale of real estate investments in joint ventures.
After-tax adjusted net operating income for the fourth quarter of 2019 was $54.6 million or $2.03 per diluted share compared to $74.3 million or $2.76 per diluted share for the same period in 2018. Our annuity, property and casualty, and health segments each generated more after-tax net operating income in the fourth quarter of 2019 compared to 2018, however, net operating income from our life segment in the fourth quarter of 2019 was negatively impacted by increases in reserves for our participating business and was lower than after-tax adjusted net operating income for this segment in the fourth quarter of 2018.
After-tax adjusted net operating income for the twelve months ended December 31, 2019 was $191.9 million or $7.14 per diluted share compared to $214.9 million or $7.99 per diluted share for the same period in 2018. In 2018 due to various tax planning initiatives, including a significant contribution to our pension plan, we achieved an effective tax rate of 0.8% and for 2019 our effective tax rate was 20.5%. This was a large contributor to the decline in after-tax adjusted net operating income in 2019 compared to 2018. In addition, a significant increase in net operating income from our property and casualty segment during 2019 was more than offset by lower net operating income from our other segments, primarily our life segment. Our life segment earnings decreased in 2019 as a result of the aforementioned increase in liabilities related to our participating business. Net operating income from our annuity segment was also lower in 2019 primarily as a result of spread compression and higher than expected fixed annuity surrenders that resulted in increased DAC amortization for the year.
A reconciliation of adjusted net operating income, a non-GAAP measure, to GAAP net income is included in the table below.
Additional Highlights Summary:
- Total life insurance in force increased by $7.8 billion to $118.1 billion since December 31, 2018
- Book value per diluted share as of December 31, 2019 increased to $222.74, compared to book value per share of $195.32 on December 31, 2018
American National Consolidated Financial Highlights
(Preliminary & Unaudited in millions, except per share data)
