2011 Financial Highlights
The Trustmark Companies
Overview of 2011 Consolidated Results and Capitalization*
Trustmark recorded another year of excellent financial results in 2011, reporting pretax gain of $47.7 million, up $3.7 million, or more than 8 percent, from $44.0 million reported in 2010.
The company also generated $963.3 million in consolidated revenue in 2011, the second consecutive year of revenue growth. This represents an increase of $65 million, or 7 percent, over 2010. Each of the company’s core businesses posted year-over-year revenue growth, led by a 49 percent jump in HealthFitness. CoreSource achieved 10 percent top-line growth, followed by Voluntary Benefit Solutions at 7 percent, and Employer Medical at 2 percent.
As noted in prior years, insurance company accounting conventions conceal underlying strength in Trustmark’s earnings. We report $47.7 million because we offer insurance coverage through parts of our business portfolio and therefore employ the insurance carrier accounting practice of deducting the entire sales (acquisition) cost of policies in the year they are written. For that reason, a second consecutive year of sales over $50 million in Trustmark Voluntary Benefit Solutions, where acquisition costs are highest, negatively impacted current-year reported earnings. When Trustmark employs the Generally Accepted Accounting Principles (GAAP) practice of deferring and amortizing acquisition costs over the life of the policy, pretax earnings in 2011 total $66.2 million, up $1.2 million over 2010, on a comparable basis. This presentation better reflects the growth of Trustmark as a diversified enterprise that includes both insurance and non-insurance businesses.
Due to the company’s solid operating performance, Trustmark was able to grow capital and surplus, a key measure of financial strength, by more than 5 percent, from $536.3 million to $565.6 million. Independent rating agency A.M. Best affirmed Trustmark’s A- (Excellent) financial strength rating and stable outlook on December 20, 2011.
2011 Enterprise Growth Initiatives
While Trustmark has always offered products to help our customers manage financial risk, we now work more proactively to help people optimize their health and well-being. A key milestone in this effort was the 2010 acquisition of HealthFitness.
Trustmark took another important step in February 2011 with the acquisition of the assets of NCQA-accredited condition management company Focused Health Solutions. Over the course of 2011, we integrated Focused Health capabilities into HealthFitness and now offer a comprehensive suite of health, fitness and condition management services. Our goal is to enable companies to infuse a culture of health among employees through personalized interaction and a science-based approach that builds individual engagement and commitment to prevention and healthy lifestyles.
Our businesses, while they operate somewhat independently, are working together more closely than ever to offer our customers proven ways to improve health and reduce medical costs. Just one example is our Life, Health & Wealth program offered through Voluntary Benefit Solutions. Life, Health & Wealth utilizes our personalized one-on-one enrollment model in combination with interactive communication tools and wellness programs provided by HealthFitness. This approach increases interest, engagement and participation in programs that support healthy behaviors and foster financial security.
In March 2011, Nippon Life Benefits, a subsidiary of Nippon Life Insurance Company, one of the world’s largest mutual life insurers, selected Trustmark’s TPA subsidiary, CoreSource, to administer its small- and large-group health insurance business. As of the end of 2011, we had added nearly 850 Nippon-insured groups, representing over 13,000 lives.
Also in 2011, our Employer Medical division launched a new self-funded product through Starmark®. Starmark HealthyEdgeSM offers companies with 10 or more employees greater control over their health benefits and the flexibility to tailor the plan design to meet specific needs, as well as the opportunity for future savings. This new product, along with Starmark Healthy Incentives®, gives smaller employers a range of innovative medical benefit options.
In short, each of Trustmark’s core businesses is performing well. To build on that momentum, we are intensifying our enterprise focus. In addition to investments that enhance the capabilities of each business, we are investing in the intersections between our businesses as catalysts to generate valuable new solutions for our customers and quality growth opportunities for our company.
*Represents the consolidated financial results of Trustmark Mutual Holding Company for the 2011 calendar year.
© 2013 Trustmark Companies (Trustmark Mutual Holding Company) and its subsidiaries