Slide 1: Citizens Inc.
CITIZENS INC. TRANSFORMING AND CLEAR REVENUE GROWTH OPPORTUNITIES AUGUST 2024 WWW.CITIZENSINC.COM
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Slide 3: Safe Harbor Statement
SAFE HARBOR STATEMENT This presentation contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, that involve risks and uncertainties. All statements other than statements of historical facts contained in this presentation, including statements
Slide 4: Company Overview
Company Overview \CcITIZENS ©
Slide 5: Citizens Overview
CITIZENS OVERVIEW We specialize in offering traditional life insurance, endowment products and final expense insurance in niche markets where we believe we are able to achieve competitive advantages 232 Policyholders 4,000+ $1.7B Assets In more than employees Independent 80 Agents Over $5 Billion Gr
Slide 6: Company Premium Revenues Overview
COMPANY PREMIUM REVENUES OVERVIEW Q2 2024 Premium Revenues (Segment) Life Insurance Segment Life Home Home Services Insurance Segment Insurance (74%)1 Segment Services (26%)1 Segment International Market: 74% 26% Whole life insurance (funeral and burial costs) • Majority of premiums originate in Lou
Slide 7: Uniquely Positioned for Growth Opportunities
UNIQUELY POSITIONED FOR GROWTH OPPORTUNITIES Persistent customer base expansion in large underserved niche markets globally Capital is invested in a more secure economic environment (the U.S.) U.S. Dollar Protection against devaluation of the policyowners' local currency Denominated Products Less pr
Slide 8: 2024 Expected Milestones
2024 EXPECTED MILESTONES For 2024, Citizens has the following aspirations: • Increase first year premium revenues at least 25% • Expand global network of producing agents at least 20% • Introduce 2 to 3 new products or major product enhancements. Citizens delivered a new product in Q1 2024 Our strat
Slide 9: Key Investment Highlights
KEY INVESTMENT HIGHLIGHTS TRANSFORMING AND CLEAR REVENUE GROWTH OPPORTUNITIES Unique Market Position Clear Growth Opportunities Executing on Goals • A Leader in USD-denominated whole • Large unmet need for Spanish insurance • Rapid expansion of sales force life products, internationally products in
Slide 10: Roadmap Execution
Roadmap Execution \CcITIZENS ©
Slide 11: Recent Accomplishments
ACCOMPLISHMENTS TRANSFORMING AND CLEAR REVENUE GROWTH OPPORTUNITIES INITIATIVES Rapid expansion of sales force Clear and defined runway for geographic expansion Disciplined expense and capital management Rapidly develop innovative products Advantages in growing niche markets globally ▪ Record number
Slide 12: Executing on Success
EXECUTING ON SUCCESS Amount of Insurance Issued 800 $742 $675 $413 New & Innovative Products +73% y/y 600 in 1H 2024 $570 Successful Selling Campaigns $392 $411 Growing Distributor Relationships 400 $354 $329 Positive results • Record quarter of insurance issued in 200 Q2 2024 and 1H 2024 2019 2020
Slide 13: Shareholder Returns
SHAREHOLDER RETURNS Book Value Per Share, Ex-AOCI $millions Shareholder Equity, Ex-AOCI + 8% y/y $6.50 $6.02 $6.00 $5.85 $400 +9% y/y $5.31 $5.50 in Q2 2024 $5.00 $4.78 $300 $290 $299 $4.50 $265 $4.00 $239 $108 $3.50 $118 $3.00 $200 $137 $139 $2.50 $2.00 $1.50 $100 $191 $172 $1.00 $128 $100 $0.50 $0
Slide 14: Process Improvements & Technology
PROCESS IMPROVEMENTS & TECHNOLOGY MAKING IT EASIER TO DO BUSINESS WITH CITIZENS Sales & Distribution Self-service Platform Developed digital sales and Enhanced policyholder and agent servicing platforms to improve self-services platform with new distribution capabilities capabilities to make it easi
Slide 15: Financial Overview
Financial Overview \CcITIZENS ©
Slide 16: Low Risk Profile and Financial Strength
LOW RISK PROFILE AND FINANCIAL STRENGTH • Low risk business model with traditional products and conservative investment approach Disciplined Conservative • Strong balance sheet underpinned by a prudent Approach to Investment approach to: Capital and Portfolio Liquidity o Investment portfolio mix o P
Slide 17: Investment Portfolio
INVESTMENT PORTFOLIO HIGH-QUALITY AND WELL-DIVERSIFIED Cash and Invested Assets (Q2 2024) • Fixed income and cash securities represent 88% of the investment portfolio 7% Long-term • 99% of fixed income investments Investments rated investment grade 5% $1.41B Policy Loans • Annualized investment yiel
Slide 18: Capital Adequacy and Liquidity
CAPITAL ADEQUACY AND LIQUIDITY Risk Based Capital Ratio (%) Puerto Rico Capital Requirement (TAC/ACL RBC) 8.0 Management’s 600% 7.0 Objective is Less Than 7 488% 6.0 500% 5.1 5.0 Our lower 400% ratio of 5.1 350% 4.0 Internal target is more 300% 3.0 conservative 200% 2.0 100% 1.0 0% 0.0 2023 2023 RBC
Slide 19: Financial Highlights for Q2
FINANCIAL HIGHLIGHTS FOR Q2 GAAP Financial Results As of and for the periods ended Three Months Ended June 30, Six Months Ended June 30, Performance Highlights (In thousands, except per share data) 2024 2023 2024 2023 Total Revenues $ 62,084 $ 58,527 $ 119,796 $ 114,441 • Revenues increased 6% to $6
Slide 20: SC Citizens
SC CITIZENS
Slide 21: Appendix
Appendix \CcITIZENS ©
Slide 22: Explanatory Notes on Use of Non-GAAP Measures
Explanatory Notes on Use of Non-GAAP Measures 1Adjusted Operating Income Adjusted Operating Income is a non-GAAP measure that is computed as pre-tax GAAP operating income, excluding net investment related gains (losses) and unusual one-time items. Management believes that this metric is meaningful,
Slide 23: Explanatory Notes on Use of Non-GAAP Measures, Continued
Explanatory Notes on Use of Non-GAAP Measures, Continued 2Adjusted Book Value Per Class A Common Share Adjusted book value per Class A common share is a non-GAAP measure that is calculated by dividing actual Class A common stockholders’ equity, excluding AOCI, by the number of Class A common shares
Slide 24: Company Timeline
COMPANY TIMELINE 2020 2021 Strategic Initiatives CEO, Gerald 1) Product and Geographic expansion Shields joins 2) Enhance marketing and sales efforts Citizens 1975 1995 3) Implement process improvements Expanded Security Plan Life was operations incorporated to fund Internationally final expenses Be
Slide 25: Dedicated & Experienced Management Team
DEDICATED & EXPERIENCED MANAGEMENT TEAM INTERDISCIPLINARY TEAM WITH BROAD CAPABILITIES JON STENBERG SHERYL KINLAW CEO and President CEO and Vice President, Chief Legal Officer and Secretary CLO Since PRESIDENT 2021 Since 2024 MATT LEWIS ROBERT M. MAULDIN, III VP Vice President, Chief Marketing Offic