Torchmark Corporation, through its subsidiaries, provides various life and health insurance products, and annuities in the United States, Canada, and New Zealand. It operates through Life Insurance, Health Insurance, and Annuities segments. The Life Insurance segment offers life insurance products, including traditional and interest-sensitive whole life and term life insurance, and other life insurance. The Health Insurance segment provides health insurance products comprising Medicare Supplements, critical illness, accident, long-term care, and limited-benefit supplemental hospital and surgical coverages. The Annuities segment provides single-premium and flexible-premium deferred annuities. The company sells its products through sales by direct response, exclusive agents, and independent agents, as well as through direct mail, Internet, television, and magazine distribution channels. Torchmark Corporation was founded in 1900 and is headquartered in McKinney, Texas.
Business Analysis of Torchmark
The Insurance Sector is witnessing a major shakeup, new age business models in the industry are transforming both customers and businesses. Faced with this uncertainity, companies are investing resources to transform their business. An in-depth business analysis is a valuable resource to identify and articulate the need for a business model change. At R&P Research we believe, the starting point for a business analysis is Benchmarking. Business benchmarking can be done at various levels: 1) Industry Benchmarking 2) Peer Benchmarking 3) Disruptors Benchmarking. In this report, we share the snapshot of how Torchmark compares against the industry on the major performance indicators. This analysis, along with peer group/disruptors benchmarking and revenue model understanding can help identify growth and cost optimization opportunities to maximize the value delivered by Torchmark to its stakeholders. R&P Research Industry Intelligence Platform provides historical data for last 15 years with an easy to use benchmarking interface for an in-depth comparative business analysis.
Here is the performance snapshot of Torchmark with an interactive chart.
- Revenue Growth: Torchmark reported a revenue growth of 4.5% year-on-year during 2016. Life Insurance Industry grew at -1.7% in the same period
- COGS share of Revenues: As a percentage of revenue, Torchmark spent 54.1% of its total revenues on COGS. Life Insurance industry average (COGS share of revenue) in the same period was 71.2%
- R&D share of Revenues: Torchmark R&D share of Revenues details are not available because either company does not share the data or we do not have it
- SG&A share of Revenues: Torchmark SG&A share of Revenues details are not available because either company does not share the data or we do not have it
- Inventory share of Revenues: Torchmark Inventory share of Revenues details are not available because either company does not share the data or we do not have it
- Accounts Payable share of Revenues: Torchmark Accounts Payable share of Revenues details are not available because either company does not share the data or we do not have it
- Accounts Receivable share of Revenues: As a percentage of revenue, Torchmark invested 9.8% of its total revenues on Accounts Receivable (A/R). Life Insurance industry average Accounts Receivable investment in the same period was 38.1%
- PP&E share of Revenues: Torchmark PP&E share of Revenues details are not available because either company does not share the data or we do not have it
- Intangibles share of Revenues: As a percentage of revenue, Torchmark invested 11.2% of its total revenues on Intangibles. Life Insurance industry average Intangibles investment in the same period was 7.6%
- Net Margins: Torchmark Net Margins in the year 2016 were 14.0%. Life Insurance industry average Net Margins in the same period were 4.3%
Sector and Industry Association of Torchmark
For the purpose of performance benchmarking of a company with a sector or industry average, R&P Research associates every company with one sector and one industry. An industry consists of companies with related/similar business models. A sector comprises of a group of related/similar industries. For high-level analysis purposes, related/similar sectors are grouped into sector groups.
Torchmark is associated with Financials Sector Group, Insurance Sector, and Life Insurance Industry.
Insurance sector is comprised of the following industries: Life Insurance; Property & Casualty Insurance; Surety & Title Insurance; Insurance Brokerage; Diversified Insurance. The definitions for each of the industries is as follows:
- Life Insurance industry includes companies engaged principally in life insurance.
- Property & Casualty Insurance industry includes companies engaged principally in accident, fire, automotive, marine, malpractice and other classes of non-life insurance.
- Surety & Title Insurance industry includes companies providing title & surety insurance.
- Insurance Brokerage industry includes insurance brokers and agencies.
- Diversified Insurance industry includes companies with life, health, property & casualty, and reinsurance interests, none of which predominates.
Industry Ranking of Torchmark
With $3.9 billion revenues, Torchmark ranked number 7 of all the companies in the US Life Insurance industry. There were a total of 14 public companies in the US Life Insurance industry that had revenues greater than $50 million during 2016.
The top-10 companies in the US Life Insurance industry by revenues during 2016 were:
- MetLife ($63.5 billion)
- Prudential Financial ($58.8 billion)
- Lincoln National ($13.3 billion)
- Reinsurance Group Of America ($11.5 billion)
- Voya Financial ($10.8 billion)
- Genworth Financial ($8.4 billion)
- Torchmark ($3.9 billion)
- American National Insurance ($3.2 billion)
- American Equity Investment Life ($2.2 billion)
- Primerica ($1.5 billion)
Business Model Analysis (BMA) Framework
We use the following framework to assess the business model of a company. Business Model Analysis framework can be used by organizations to articulate growth strategies and identify cost optimization opportunities. Technology and consulting companies can use this framework to identify the value drivers and pain points of their targeted customers. Entrepreneurs can use this framework to understand the language of business and identify promising business opportunities. This framework can be used by any professional aspiring to take up a leadership role to better understand the businesses challenges, articulate growth strategy, and monitor the business improvement requirements for the organization.