Citizens, Inc. (Austin, Texas) :CIA-US: Earnings Analysis: Q3, 2017 By the Numbers : December 5, 2017

Citizens, Inc. (Austin, Texas) reports financial results for the quarter ended September 30, 2017.

We analyze the earnings along side the following peers of Citizens, Inc. (Austin, Texas) – Great-West Lifeco Inc., Torchmark Corporation and Security National Financial Corporation Class A (GWLIF-US, TMK-US and SNFCA-US) that have also reported for this period.


  • Summary numbers: Revenues of USD 64.33 million, Net Earnings of USD 3.45 million.
  • Year-on-year change in operating cash flow of -2.89% is about the same as the change in earnings, likely no significant movement in accruals or reserves.
  • Year-on-year earnings up despite decline in operating margins after interest and pretax margins.

The table below shows the preliminary results and recent trends for key metrics such as revenues and net income (See complete table at the end of this report):

2017-09-30 2017-06-30 2017-03-31 2016-12-31 2016-09-30
Relevant Numbers (Quarterly)
Revenues (mil) 64.33 60.85 60.38 69.92 61.74
Revenue Growth (%YOY) 4.19 -1.27 7.01 7.25 2.01
Earnings (mil) 3.45 0.57 2.06 0.06 2.54
Earnings Growth (%YOY) 35.57 -56.63 205.49 102.51 2369.9
Net Margin (%) 5.36 0.94 3.41 0.08 4.12
EPS 0.07 0.01 0.04 0 0.05
Return on Equity (%) 1.32 0.22 0.82 0.02 0.97
Return on Assets (%) 0.84 0.14 0.51 0.01 0.65

Access our Ratings and Scores for Citizens, Inc. (Austin, Texas)

Market Share Versus Profits

Revenues History
Earnings History

CIA-US’s change in revenue this period compared to the same period last year of 4.19% is almost the same as its change in earnings, and is about average among the announced results thus far in its peer group, suggesting that CIA-US is holding onto its market share. Also, for comparison purposes, revenues changed by 5.72% and earnings by 502.97% compared to the immediate last period.

Revenues Growth Versus Earnings Growth

Quadrant label definitions. Hover to know more

Leader, Earnings Focus, Laggard, Revenues Focus

Earnings Growth Analysis

Insurance companies sometimes tradeoff for improvements in premiums earned by relaxing standards in underwriting policies. A quick way to check against such activity is to compare the changes in loan loss provisions as well any chnages in the level of policy claims. If either of these checks point to a decline in the underwriting standards, it is quite possible that the company’s performance is a result of underwriting policy changes that could have a longer term impact compared to the shorter term pop in premiums earned.

Premiums Earned Percent History
Loss Ratio History

The company’s premiums earned as a percent of total revenues showed no year-on-year improvement and went from 79.64% to 78.11%. In spite of this, the company’s earnings went up – influenced primarily by the improvement in loss ratio from 85.21% to 84.91%. For comparison, premiums earned as a percent of revenues were 78.45% and the loss ratio 80.17% in the immediate last period.

Premiums Earned Percent Versus Loss Ratio

Cash Versus Earnings – Sustainable Performance?

It is important to examine a company�s cash versus earnings numbers to gauge whether its performance is sustainable.

Operating Cash Flow Growth Versus Earnings Growth

Quadrant label definitions. Hover to know more

Cash Flow based Earnings, Likely Non-cash Earnings, Low Cash Flow Base, Likely Undeclared Earnings

CIA-US’s change in operating cash flow of -2.89% compared to the same period last year is about the same as its change in earnings this period. Additionally, this change in operating cash flow is about average among its peer group. This suggests that the company did not use accruals or reserves to manage earnings this period, and that, all else being equal, the earnings number is sustainable.


Despite a decline in operating margins after interest and a decline in pretax margins, the company’s earnings rose.

EBIT Margin Versus PreTax Margin

Quadrant label definitions. Hover to know more

Operation driven Earnings, One-time Favorables, Low Earnings Base, One-time Unfavorables
EBIT Margin History
PreTax Margin History

Access our Ratings and Scores for Citizens, Inc. (Austin, Texas)

Company Profile

Citizens, Inc. engages in the provision of insurance and reinsurance services. It operates through the following segments: Life Insurance, Home Service, and Other Non-Insurance Enterprises. The Life Insurance segment provides interest-bearing cash value accumulation, tax-deferred interest earnings, retirement fund, and financial security. The Home Service segment offers funeral and burial costs. The Other Non-Insurance Enterprises segment provides data processing services and aviation transportation to the firm. The company was founded by Harold Eugene Riley in 1969 and is headquartered in Austin, TX.

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