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Protective Life Corporation
2019 Company Update
April 2, 2019
2
Agenda
Central Time Topic Presenter
8:00 am Introduction Lance Black
8:05 am Company Overview Rich Bielen
8:20 am Financial Results & Plan Steve Walker
8:40 am
Business Segment Highlights
- Life and Annuity
- Acquisitions
Aaron Seurkamp
Nancy Kane
9:00 am Financial Strength Mike Temple
9:10 am Q&A Group
9:30 am Closing Lance Black
3
Introduction
In addition to the information contained in this presentation, we have supplemental financial information available on our
website at www.protective.com. The information found on our website is not a part of this presentation. Also, this
presentation includes forward-looking statements which express expectations of future events and/or results. Actual
events and results may differ materially from these expectations. For more information about the risks, uncertainties,
and other factors that could affect our future results, please refer to Part I, Item 1A, Risk Factors, of the Company’s
most recent Annual Report on Form 10-K. Unless context otherwise requires, “we,” “us,” and “our” refer to the
consolidated group of the Protective Life Corporation (the “Company”) and its subsidiaries.
Certain information included in this presentation may contain non-GAAP financial measures. For information relating to
non-GAAP financial measures (pre-tax and after-tax adjusted operating income) and the associated reconciliation to
GAAP financial measures, please refer to Note 22 to our consolidated financial statements included in our most recent
Annual Report on Form 10-K. The preparation of Company financial statements requires management to make
estimates and assumptions that impact the reported amount of assets and liabilities, the disclosure of contingent assets
and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the
reporting periods.
This presentation is not intended as, and should not be construed as, earnings guidance. This presentation is dated
April 2, 2019. We assume no obligation to, and do not intend to update the information contained herein after such
date.
Company Overview
Rich Bielen
President and Chief Executive Officer
6
Protective at a Glance
We are financially strong.
Talent, culture and values drive us.
We maintain a balanced and diverse business
mix and profile.
We are focused on enterprise-wide scale for
competitive edge.
We are enhancing customer experiences.
We are prudent at risk management.
Our global parent is supportive.
Our Business Today 5 core segments Life Marketing, Acquisitions,
Annuities, Stable Value Products, and Asset Protection Products
8.6Mpolicies and
contracts in force
$901B life insurance
in force
$90B total assets
56 acquisitions in company history
As of December 31, 2018
~3,000 employees across the U.S.
7
Experienced Leadership
Richard J. Bielen
President & CEO
PLC tenure: 28 years
Industry experience: 28 years
CFO & Vice Chairman from 2007 to 2017
CIO from 2002 to 2007
Mike Temple
Vice Chairman
PLC tenure: 6 years
Industry experience: 33 years
Named Vice Chairman,
Finance and Risk in 2018
Joined as Chief Risk Officer
in 2012 Steven G. Walker
EVP & CFO
PLC tenure: 17 years
Industry experience: 36 years
Chief Accounting Officer from
2003 to 2016
Certified Public AccountantCarl S. Thigpen
EVP & CIO
PLC tenure: 35 years
Industry experience: 35 years
CIO since 2007
Previously Chief Mortgage Officer
Lance P. Black
SVP & Treasurer
PLC tenure: 16 years
Industry experience: 16 years
Treasurer since 2007
Head of Stable Value Products
since 2013Nancy Kane
EVP & Acquisitions and Corporate Development
PLC tenure: 22 years
Industry experience: 22 years
Leads Acquisition Strategy
Joined as Senior Associate
Counsel in 1997
PLC tenure: 15 years
Industry experience: 15 years
Leader of Life & Annuity Sales
and Distribution since 2013
Aaron Seurkamp
SVP & Life and Annuity Executive
8
2019 Priorities
Investing in
Talent & CultureAcquisition
Integrations
Improving
Life Earnings &
Profitability
Enhancing
Customer
Experience
Building
Enterprise-wide
Capabilities
9
Acquisition & Partnership Capabilities: Our Competitive Advantage
10
Our Financial Mission Remains Constant
Use our size and agility to our
advantage
Rationally price products to compete
Leverage our M&A expertise
Manage our investment portfolio with
discipline, capitalizing on our strengths
Manage risk prudently
Be a great place to work for our talent
Fulfill our promise to our customers
2018 Financial Results
Steve Walker
Executive Vice President, Chief Financial Officer
12
2018 Financial ResultsGAAP Basis
Net income of $302 million, unfavorable to
plan by $74 million
– Equity securities fair value unfavorable $31
million after-tax
After-tax adjusted operating income of $378
million, unfavorable to plan by $39 million
– Mortality unfavorable $32 million pre-tax
(severe flu season)
– 4Q equity market impact unfavorable $32
million pre-tax
– Partially offset by favorable investment
income
Closed Liberty Mutual acquisition two months
earlier than planned
– Earnings favorable to plan $14 million pre-tax
$ in millions
2018
Plan
2018
Actual
Life Marketing $ 38 $ (19)
Annuities 178 167
Acquisitions 275 283
Asset Protection 20 30
Stable Value 63 102
Corp & Other (52) (84)
Pre-Tax Adj. Op. Income $ 522 $ 479
Tax (105) (101)
After-Tax Adj. Op. Income $ 417 $ 378
Realized Gains (Losses) (41) (76)
Net Income $ 376 $302
13
Life Marketing Results
Sales flat with the market
Focused on emerging analytics
and digital platforms
Liberty Mutual represents
significant opportunity for sales
growth
Earnings variance to plan
− Mortality
− UL experience
− Reinsurance impacts
Segment Highlights Sales
$170 $172 $168
2016 2017 2018 2016 2017 2018
Actual Plan
Pre-Tax Adjusted
Operating Income (Loss)
$40 $38
$51
($19)
$ in millions $ in millions
14
Annuities Results
Shifted our emphasis to fixed
and indexed products
Sales increased 57% in 2018
− Overall industry annuity
sales up 14%, fixed
annuities up 25%, and
variable annuity sales up
2% year over year*
Continued to expand P&C
and Bank channels
Earnings variance to plan
− Negatively impacted by 4Q
market decline
Pre-Tax Adjusted
Operating Income$ in millions
2016 2017 2018
VA Fixed
$1,320$1,557
$213 $213
$167$178
2016 2017 2018
Actual Plan
2016 2017 2018
Sales$ in millions
$593$426
$727 $1,131
$2,438
$2,140
$298
*Based on LIMRA Secure Retirement
Institute, February 20, 2019.
Segment Highlights
15
$61
$105 $102
$63
2016 2017 2018
Actual Plan
Stable Value Products ResultsPre-Tax Adjusted Operating
Income$ in millions
Ending Account Balances* and Sales
$ in millions
2016 2017 20182016 2017 2018
FABN
GICS and other Funding Agreements
Sales $1,857 $1,766 $1,339
$3,491
$4,693
$1,872
$3,338
$1,619
$1,355
Sells fixed and floating rate
funding agreements directly to
institutional investors
Market GICs to 401k and other
qualified retirement plans
Used opportunistically to
complement asset liability
management, increased with
balance sheet growth
Earnings variance to plan
− Strong participating income
− Balance exceeded plan
due to FABN program
growth
− Adjusted spread favorable
to plan
1.82% 1.74% 1.54%Adjusted Spread**
$5,234
$1,150
$4,084
*Excludes PGAAP premiums on stable value account balances which are included in the US GAAP Balance Sheet**Adjusted Spread excludes participating mortgage loan income.
Segment Highlights
16
$22 $15 $11
$378 $414 $404
$104$110
$67
2016 2017 2018
Credit Service Contracts GAP
Asset Protection Results
$ in millions
Pre-tax Adjusted
Operating Income
$ in millions
Sales
$504
Segment Highlights
Top provider of extended
service contracts on
automobiles, recreational
vehicles (“RV”), watercraft and
powersports in the marketplace
Successfully integrated US
Warranty Acquisition
Shifting mix from risk taking to
fee based products
Earnings variance to plan
− Favorable service contract
loss ratios
$539$482
$16
$24
$30
$20
2016 2017 2018
Actual Plan
17
Acquisitions Results
Pre-tax Adjusted
Operating Income$ in millions
Genworth
16%
MONY
26%
2011
and prior
40%
Contributions to 2018 Pre-tax
Adjusted Operating IncomeSegment Highlights
Active end to 2018 as the
teams focused on signing the
Great-West Transaction
M&A pipeline has been
active
Earnings variance to plan
− Closed Liberty Mutual
transaction 2 months
earlier than planned
− Favorable investment
income
Liberty
Mutual
18%
2016 2017 2018
Actual Plan
$261 $250$283 $275
2019 Financial Plan
Steve Walker
Executive Vice President, Chief Financial Officer
19
We Have a Robust Financial Modeling Discipline
We have a robust modeling capability
– Based on seriatim (policy by policy) projection
– We update model data with actual detail by line of business each quarter and re-project
current in-force
Each quarter we analyze information about variations from the plan
We adjust our business activity to execute our plan
‘Current state’ assumptions underpin model projections
– Current market reinvestment rates
– Current capital, accounting, and reserve standards
20
2019 Sales Plan By Segment
Sales
2017 2018 2019
$539$482
Asset Protection*
Stable ValueAccount
Balance**
Actual Plan
2017 2018 2019
$168
$208
Life Marketing
$172
2017 2018 2019
$4,693$5,234
$ in millions
$5,000
Annuities
$426 $298
$478
$1,131
$2,140
$2,350$426
$298$350
2017 2018 2019
Fixed Variable
$2,700
$1,557
$2,438
*Excludes USWC warehouse sales.**Excludes PGAAP premiums on stable value account balances which are included in the US GAAP Balance Sheet.
21
2019 Financial Plan
*Debt to Capital excludes non-recourse captive financings.
**Dividend to parent of 50% of net income in 2020 & 2021.
2018 Actual 2019 Plan
After-Tax Adj. Operating Income $378M $425M
Net Income $302M $351M
RBC Ratio 459% 423%
Debt to Capital* 19% 23%
Dividend to Dai-ichi** $140M -
Capital > 400% RBC $0.6B $0.3B
22
Recent Acquisitions Can Drive Earnings Growth$ in millions
3-year Earnings projection based on
modeled impact of recent
acquisitions
Earnings growth forecast of 50%
over this period
Liberty Mutual & Great-West
transactions represent 35% of 2021
model earnings
After-Tax Adj. Operating Income
$539 $426
Assumes Great-West Acquisition Closes 7/1/2019
Actual Plan Model
$378$425
$526$560-$600
2018A 2019P 2020M 2021M
Life and Annuity Division Segment Growth
Plans
Aaron Seurkamp
Senior Vice President, Life & Annuity
24
2014 2015 2016 2017 2018
Life Insurance Sales – Historical View
$156M*$170M $172M
$130M
Sales by product
Outpaced
industry growth
Began building new
growth channels
Service
improvement
Improved core
BGA business
$168M**
AffinityTraditional
*2015 sales results are for January 1, 2015 – December 31, 2015.
**Total excludes Liberty sales since May 2018 closing.
25
32019 Life Business Plan
2019 Plan
Liberty
P. Wholesale
Affinity
EDJ
BGA
$208M
Key Drivers
• Integrate Liberty acquired business
‒ $42M in new sales
‒ Exclusive P&C distribution
‒ Industry leader in Bank channel life
insurance sales
• Optimize traditional distribution profitability
‒ Product pricing actions
‒ Maintain “rational” presence in term
market
‒ Expand access to accelerated
underwriting platform
Sales
26
Acquired Liberty Business Distribution Models
Captive Channel
Agents
Products:
SI Term
SI Whole Life
SPWL
Fixed Rate Deferred Annuity
Exclusive 3-year agreement to be provider
of Life and Annuity products
Expanded Bank Channel
A consistent leader in bank life sales,
holding the #1 position for the past 3 years
47 bank relationships
Over 20,000 agents licensed to sell
Single-premium whole life
Single-premium deferred annuity
Simple, proprietary sales process
$4.4B in total sales since 2010
27
Continued Distribution and Product Category Expansion
Brokerage General Agency
Affinity / Direct
Brokerage General Agency
Affinity / Direct
P&C Channel
Bank Channel
Brokerage General Agency
Affinity / Direct
P&C Channel
Bank Channel
Executive Benefits
Group Insurance
2018
Distribution Channels
2019
Distribution Channels
2020
Distribution Channels
2 4 6
28
2014 2015 2016 2017 2018
Fixed FIA VA
Annuity Sales – Historical View
$1.6B*$1.3B
$1.6B$1.8B
$2.4B**
Sales by product
Industry regulatory headwinds (DOL)
Bank channel growth
Diversifying beyond Edward Jones
Protective shift from variable to fixed
*2015 sales results are for January 1, 2015 – December 31, 2015.
**Total excludes Liberty sales since May 2018 closing.
29
2019 Plan
Liberty
P&C
IMO
BD
Bank
2019 Annuity Business Plan
$2.7B
Key Drivers
• Transition sales to more profitable lines
‒ Structured market entry
‒ Continue FIA growth
• Expand bank presence
‒ Deepen Chase Bank relationships
‒ New Liberty relationships
• Build P&C Momentum
‒ Maintain Allstate position
‒ Attract new partner
• Strengthen Edward Jones relationship
Sales
30
Our Approach
We are leveraging our Acquisition and Partnership capabilities to diversify production
sources away from commoditized markets and create differentiated value propositions
with defensible competitive advantages and superior returns.
Acquisitions Update
Nancy KaneExecutive Vice President, Acquisitions and Corporate Development
32
Great-West & Liberty Life: Transformative Impact
Liberty Life Assurance Company of
Boston
– Announced January 19, 2018;
closed May 1, 2018
– Contributing 32% of acquisition
segment earnings in 2019
– New business opportunities
– $13.3B Reserves
– 525,000 policies in force
Great-West Life & Annuity Insurance
Company
– Announced January 24, 2019; expected to
close in 2Q19
– Financially attractive - capital deployment,
earnings and diversification
– Strategic opportunity – competitive position
in COLI/BOLI, leading position in bank sold
Life sales
– Estimated capital investment:
$1.2 billion – largest in Protective’s history
Combined transactions expected to represent
35% of GAAP earnings, 30% of total assets by 2020
33
Great-West Block Largely Seasoned Life Business
80%Protection
Business
20%Annuity
Business
*Estimate of relative reserve amount by product
34
Jan Mar May Jul Sep Nov Jan Mar May
2019 2020
Liberty New Business
Captive Channel
Launch
Feb 1
Sept 1
Liberty TSA EndsOct 31
Bank Launch
estimated
May
Liberty System Conversion
Complete,
Name Change (effective date)
Signing
Jan 23 Close - Estimated
[May 1 – July 1]
Jan 1 -
Sep 1Liberty System Admin Conversions
Jan 21 - Jun
30Day 2 - estimated
Closing ActivitiesJan 24 – July 1
DiscoveryFeb 6 - Jun 28
TSA duration - 18 months post Close (ends ~12/1/20)
Liberty & Great-West Overall Integration Timeline
Financial Strength
Mike Temple
Vice Chairman, Finance and Risk
36
Strong Capital Position
2018 Year-End
Risk Limit: 350%
RBC Ratio
Target: 400%
Debt/Capital Ratio
Target: 25%
Risk Limit: 30%
459% 19%
37
Great-West Transaction Funding
Source of Funds ($ millions)
Protective Capital 200
Debt 600
Dai-ichi Support 400
Total Investment 1,200
38
2019 Plan
Risk Limit: 350%
RBC Ratio
Target: 400%
Debt/Capital Ratio
Target: 25%
Risk Limit: 30%
423% 23%
Solid, Growing Capital Position
39
Excellent Liquidity Management
Current Assets and In Force Liabilities are well matched. ALM focused on a combo of
cash flow and duration matching
Liquid portion of total liabilities
are fully backed by liquid assets
Laddered debt portfolio
Diverse sources provide
flexibility
– Operating cash flows
– Bank Line of Credit
– FHLB available
borrowings
– Cash, treasuries, short-
term corporate securities
Reflects portfolio over-investment in lines of business
As of December 31, 2018
In-Force Life Reserves
In Force Stable Value and Annuity Reserves
40
Prudent Investment Strategy
High quality investment grade assets
Strong Asset Liability Management focus
Disciplined approach to ratings and
diversification
Only 3% of securities below investment
grade
Maintaining commercial mortgage loan
portfolio quality
Not investing in alternative asset classes
99% of the General Account is managed
in-house, at costs more attractive than
passive index funds
82%
1% 12%
3%1% 1%
Portfolio Mix as of December 31, 2018$66.3 billion fair value
Fixed maturities
Equity securities
Mortgage loans
Policy loans
Other long-term investments
Short-term investments
Cash
41
Statutory Basis
Our Business Mix is an Advantage
1. Excludes the Corporate & Other segment and excludes the income recorded under the Genworth reinsurance transaction which is fully offset by reinsurance surplus adjustments recorded in accordance with SSAP 61
Acquisitions
39%
Annuities
33%
2018 Pre-Tax Consolidated
Statutory Income1
Life
Marketing
18%
Acquisitions
42%
Asset Protection
4%
Stable
Value
11%
Annuities
25%
Diversified, high quality earnings
Preference for stable insurance risk
Realistic planning assumptions
Clean Balance Sheet
Absence of troubled Legacy liabilities
Emphasis on sound risk management
42
Highly Rated
As of December 31, 2018
Protective Life
Corporation
Protective Life
Insurance Company
Senior Debt Financial Strength
Standard & Poor’s A- AA-
Moody’s Baa1 A1
Fitch BBB+ A+
A.M. Best a- A+
Outlook for all ratings is stable
43
Summary
We have a unique business model and franchise
– Experienced Leadership team and talented workforce are engaged and energized
Our focus is on growth
– Healthy retail sales plans leveraging new distribution and partnerships
– Ability to leverage our distinctive M&A franchise
– New capabilities to support growth and improve the customer experience
We have deployed excess capital to create a transformational opportunity
– We are focused on the successful integration of the 2 largest deals in our history
– Significant earnings growth is possible over the next 3 years
We have a strong balance sheet and bright future
– High quality asset portfolio, diversified product portfolio, with disciplined asset-
liability management
– Strong financial strength metrics, high ratings, with a supportive global parent
Closing
Lance Black
Senior Vice President, Treasurer
46
Forward-Looking StatementsThis Presentation contains forward-looking statements. Forward-looking statements are necessarily based on estimates and
assumptions that are inherently subject to significant business, economic and competitive uncertainties, risks and contingencies, many of
which are beyond the Company’s control and many of which are subject to change. Such statements include statements regarding the
belief or current expectations of the management of the Company concerning its future financial condition and results of operations,
including its expected operating and non-operating relationships, ability to meet debt service obligations and financing plans, product
sales, distribution channels, retention of business, investment yields and spreads, investment portfolio, ability to manage asset-liability
cash flows and strategic and financial targets. This Presentation also contains statements of strategic and financial targets (“targets”) of
Dai-ichi Life Holdings, Inc. (“Dai-ichi Life”). Such targets are for internal strategic purposes only and are not estimates or projections of
the future financial condition or results of operations of Dai-ichi Life, the Company or their affiliates. Such targets are subject to change
and are not necessarily indicative of how Dai-ichi Life may conduct its business. Any such forward-looking statements or targets are not
guarantees of future performance and involve risks and uncertainties, and actual results may differ materially from those in the forward-
looking statements and targets as a result of various factors. Any forward-looking statements reflect the Company’s views and
assumptions as of the date of this Presentation and the Company disclaims any obligation to update forward-looking information. For
additional information concerning risks, uncertainties and other factors that could affect the Company’s future results, please refer to Part
I, Item 1A, Risk Factors, of the Company’s most recent Annual Report on Form 10-K.
This Presentation has been prepared, in part, from information supplied third-party sources, as indicated herein. Such third-party
information has not been independently verified and the Company makes no representation or warranty, expressed or implied, as to the
accuracy or completeness of such information. The summary descriptions and other information included in this Presentation are
intended only for informational purposes and convenient reference. The information contained in this Presentation is not intended to
provide, and should not be relied upon for, accounting, legal or tax advice or investment recommendations.
Additional information regarding the Company is available at www.protective.com.
Protective Life Corporation
2019 Company Update
April 2, 2019
48
APPENDIX
49
P&C Agents X X
Agents
Banks
Stockbrokers
InstitutionalInvestors
AutoDealers
AffinityPartners
Direct to Consumers
LifeMarketing Annuities
Stable ValueProducts
AssetProtection Acquisitions
X X
X X
X X
X
X
X
X
Universal Life and
Traditional
Fixed and Variable Annuities
WholesaleFunding
Agreements
Vehicle Service Contracts/
GAP
Dis
trib
uti
on
Acquired BusinessProducts
Primarily life and annuity
Business Segments, Products and Distribution
50
Consolidated Statements of Income
($ in millions) 2018 2017
Net premiums and policy fees 2,296$ 2,117$
Net investment income 2,484 2,052
Realized Gain/(Loss) (192) (196)
Other income 453 446
Total revenues 5,041$ 4,419$
Benefits and settlement expenses 3,516 2,957
Amortization of DAC and VOBA 226 78
Other operating expenses 916 949
Benefits and expenses 4,658$ 3,984$
Income before income tax 383 435
Income tax expense (benefit) 81 (672)
Net Income 302$ 1,107$
51
Consolidated Balance Sheets
($ in millions) 12/31/2018 12/31/2017
Fixed maturities 54,538$ 43,895$
Mortgage loans 7,725 6,818
Other investments 3,865 3,909
DAC/VOBA 3,023 2,200
Reinsurance receivable 4,765 5,076
Goodwill 825 793
Other intangibles 613 664
Other assets 1,358 1,284
Assets related to separate accounts 13,227 14,991
Total Assets 89,939$ 79,630$
Policy liabilities and accruals 42,774 31,833
Stable Value/Annuity account balances 18,955 15,620
Debt/Sub debt/Non-recourse funding obligations 4,340 4,188
Other liabilities 4,875 5,871
Liabilites related to separate accounts 13,227 14,991
Total Liabilities 84,171$ 72,503$
Shareowner's equity 5,768 7,127
Total liabilities and shareowner's equity 89,939$ 79,630$
52
Reconciliation of Shareowner’s Equity
($ in millions)
Dec 31,
2018
Dec 31,
2017Total shareowner's equity 5,768$ 7,127$ Less: AOCI (1,426) 12 Total shareowner's equity excl. AOCI 7,194$ 7,115$
Dividends paid 140$ 144$
Unrealized Gains (Losses)
($ in millions)
Gross unrealized gains 189$ 718$ Gross unrealized (losses) (2,751) (682) Net unrealized gains (losses) before tax & VOBA/DAC (2,562)$ 36$
Dec 31,
2017
Dec 31,
2018
53
Variable Annuity Fair Value Impact – 2018
($ in millions)
Product
Impact
Hedge
Impact
Net
Impact
Interest Rates $98.4 $(76.2) $ 22.2
Equity (34.3) 62.8 28.5
Volatility (8.9) 7.5 (1.4)
Other capital markets impact (60.8) (27.0) (87.8)
Subtotal $ (5.6) $ (32.9) $ (38.5)
In force impact/Economic Cost (14.9) (0.4) (15.3)
Credit spreads 46.3 - 46.3
Unlocking (13.1) - (13.1)
Pre-tax impact before DAC $ 12.7 $ (33.3) $ (20.6)
Less: DAC (3.9)
Net pre-tax impact $ (16.7)
Net impact after tax $ (13.1)
