AMERICAN NATIONAL GROUP INC – 10-K – MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

This MD&A should be read in conjunction with our consolidated financial
statements and related notes included in Part II, Item 8, Financial Statements
and Supplementary Data. For comparison of 2020 to 2019, see Part II, Item 7,
Management's Discussion and Analysis of Financial Condition and Results of
Operations in the Company's Annual Report on Form 10-K for the year ended
December 31, 2020, filed with the SEC on March 4, 2021.

Introductory Note Regarding Pending Merger

On August 6, 2021, the Company entered into an Agreement and Plan of Merger (the
"Merger Agreement") with Brookfield Asset Management Reinsurance Partners Ltd.
("Brookfield Reinsurance"), an exempted company limited by shares existing under
the laws of Bermuda, and Freestone Merger Sub Inc., a Delaware corporation and
an indirect wholly-owned subsidiary of Brookfield Reinsurance ("Merger Sub").
Upon completion of the transactions contemplated by the Merger Agreement, the
Company will become an indirect wholly owned subsidiary of Brookfield
Reinsurance in consideration for the payment of $190.00 per share in cash, for
total merger consideration of $5.1 billion.

Regulatory Approval Process. The completion of the Merger contemplated by the
Merger Agreement (the "Merger") is subject to satisfaction or waiver of certain
customary closing conditions, including obtaining the required regulatory
approval from the insurance authorities in Texas, Missouri, New York, Louisiana
and California. The required insurance regulatory process has been moving
forward consistent with our prior disclosures, and we continue to expect to
complete the Merger before the end of the first half of 2022. However, because
state insurance regulatory approval remains outstanding, the Company cannot
provide assurance the Merger will be completed on the terms or timeline
currently contemplated, or at all.

Merger Agreement's Restrictions on Interim Operations. The Company has agreed to
certain covenants in the Merger Agreement restricting the conduct of its
business between the date of the Merger Agreement and the earlier of the
Effective Time and the termination of the Merger Agreement. The general effect
of these covenants is that, during such interim period, the Company will be
limited in its ability to pursue strategic and operational matters outside the
ordinary course of business. The Company has agreed that it and its subsidiaries
will conduct their business in the ordinary course consistent with past practice
in all material respects and use reasonable best efforts to preserve their
business organizations, goodwill and assets, keep available the services of
their current key officers and employees, and preserve their present
relationships with governmental entities and other key third parties, including
customers, reinsurers, distributors, suppliers and other persons with whom the
Company and its subsidiaries have business relationships.

In addition, the Company has agreed to specific restrictions relating to the
conduct of its business between the date of the Merger Agreement and the earlier
of the Effective Time and the termination of the Merger Agreement, including,
but not limited to, not to take (or permit any of its subsidiaries to take) the
following actions (subject, in each case, to exceptions specified below and in
the Merger Agreement or previously disclosed in writing to Brookfield
Reinsurance as provided in the Merger Agreement or as consented to in writing in
advance by Brookfield Reinsurance (which consent shall not be unreasonably
withheld, delayed or conditioned) or as required by law:

•subject to certain limited exceptions, offer, issue, sell, transfer, pledge,
dispose of or encumber any shares of, or securities convertible into or
exchangeable for, or options, warrants, calls, commitments or rights of any kind
to acquire, any shares of capital stock or other voting or equity interests of
any class or series of the Company or its subsidiaries;

•amend or propose to amend the Company's or its subsidiaries' certificate of
incorporation, bylaws or other comparable organizational documents, in each
case, whether by merger, consolidation or otherwise;

•authorize, recommend, propose, enter into or adopt a plan or agreement of
complete or partial liquidation, dissolution, merger, consolidation,
restructuring, recapitalization or other reorganization of the Company or any of
its subsidiaries;

•subject to certain limited exceptions (including permitting the Company to
execute investment portfolio transactions in the ordinary course of business
consistent with past practice and in accordance with its existing investment
plan and investment guidelines), acquire or agree to acquire any business or any
corporation, partnership, association or other business organization or division
thereof;

•make or authorize capital expenditures that are, on an individual basis, in
excess of 110% of the Company's capital expenditure budget or in excess of 105%
of the aggregate capital expenditure budget, except for (i) planned capital
expenditures disclosed to Brookfield Reinsurance at signing of the Merger
Agreement and (ii) reasonable emergency capital expenditures (after consultation
with Brookfield Reinsurance) necessary to maintain its ability to operate its
businesses in the ordinary course or for the safety of individuals, assets or
the environment;
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ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS - (Continued)

•subject to certain limited exceptions, sell, lease, license, transfer, pledge,
subject to any encumbrance or otherwise dispose of any of its or their assets or
properties;

•incur, guarantee or assume any indebtedness, subject to certain limited
exceptions, including investment portfolio transactions in the ordinary course
of business consistent with past practice and other incurrences of indebtedness
not to exceed $10,000,000 in the aggregate;

•enter into any material contract or reinsurance contract other than in the
ordinary course of business consistent with past practice; and

•terminate, amend, modify, assign or waive any material right under any material
contract or reinsurance contract except in the ordinary course of business
consistent with past practice.

The Merger Agreement permits the Company to continue to pay regular quarterly
cash dividends not to exceed $0.82 per share of common stock prior to completion
of the Merger.

The above is a summary of certain material terms of the Merger Agreement and is
qualified in its entirety by the terms and conditions of the Merger Agreement,
which was filed as an exhibit to the Company's current report on Form 8-K filed
on August 9, 2021.

Caution Regarding Forward-Looking Statements

Certain statements made in this report, including but not limited to the
accompanying consolidated financial statements, and the notes thereto appearing
in Part II, Item 8, Financial Statements and Supplementary Data herein,
Management's Discussion and Analysis of Financial Condition and Results of
Operations in this Item 7 ("MD&A"), and the exhibits and financial statement
schedules filed as a part hereof or incorporated by reference herein, may
contain or incorporate by reference information that includes or is based upon
forward-looking statements within the meaning of the "safe harbor" provisions of
the Private Securities Litigation Reform Act of 1995. Forward-looking statements
generally are indicated by words such as "expects," "intends," "anticipates,"
"plans," "believes," "estimates," "will" or words of similar meaning, and
include, without limitation, statements regarding the outlook of our business
and expected financial performance, and certain statements relating to the
COVID-19 pandemic and its potential effects on the Company. These
forward-looking statements are subject to changes and uncertainties which are,
in many instances, beyond our control and have been made based upon our
assumptions, expectations and beliefs concerning future developments and their
potential effect upon us. There can be no assurance that future developments
will be in accordance with our expectations, that the effect of future
developments on us will be as anticipated, or that our risk management policies
and procedures will be effective, particularly given the uncertainty relating to
the COVID-19 pandemic. We do not make public specific projections relating to
future earnings, and we do not endorse any projections regarding future
performance made by others. Additionally, we do not publicly update or revise
forward-looking statements based on the outcome of various foreseeable or
unforeseeable events. Forward-looking statements are not guarantees of future
performance and involve various risks and uncertainties. Forward-looking
statements relate to the transaction contemplated by the Merger Agreement (the
"Proposed Transaction"), as well as to the Company's financial and operating
performance on a stand-alone basis prior to the consummation of the Merger or if
the Merger is not consummated. There are certain important factors that could
cause actual results to differ, possibly materially, from expectations or
estimates reflected in such forward-looking statements, including without
limitation risks, uncertainties and other factors discussed in Part I, Item 1A,
Risk Factors, above and elsewhere in this report, and the following factors
relating the Proposed Transaction:

•conditions to the closing of the Proposed Transaction may not be satisfied;

•regulatory approvals required for the Proposed Transaction may not be obtained,
or required regulatory approvals may delay the Proposed Transaction or result in
the imposition of conditions that could have a material adverse effect on the
Company or Brookfield Reinsurance or cause certain conditions to closing not to
be satisfied, which could result in the termination of the Merger Agreement;

•the timing of completion of the Proposed Transaction is uncertain;

•the business of the Company or Brookfield Reinsurance could suffer as a result
of uncertainty surrounding the Proposed Transaction;

•events, changes or other circumstances could occur that could give rise to the
termination of the Merger Agreement;

•there are risks related to disruption of management's attention from the
ongoing business operations of the Company or Brookfield Reinsurance due to the
Proposed Transaction;

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ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS - (Continued)

•the announcement or pendency of the Proposed Transaction could affect the
relationships of the Company or Brookfield Reinsurance with its clients, and
operating results and business generally, including on our ability to retain and
attract employees;

•the outcome of any legal proceedings initiated against the Company or
Brookfield Reinsurance following the announcement of the Proposed Transaction
could adversely affect the Company or Brookfield Reinsurance, including their
ability to consummate the Proposed Transaction; and

•the Company or Brookfield Reinsurance may be adversely affected by other
economic, business, and/or competitive factors as well as management's response
to any of the aforementioned factors.

The foregoing review of important factors related to the Proposed Transaction
should not be construed as exhaustive and should be read in conjunction with the
other cautionary statements that are included herein and elsewhere, including
the risk factors included in Brookfield Reinsurance's Registration Statement on
Form F-1 and in this 2021 Annual Report and other documents of the Company and
Brookfield Reinsurance on file with the SEC. Neither the Company nor Brookfield
Reinsurance undertakes any obligation to update, correct or otherwise revise any
forward-looking statements. All subsequent written and oral forward-looking
statements attributable to the Company or Brookfield Reinsurance and/or any
person acting on behalf of either of them are expressly qualified in their
entirety by this paragraph. The information contained on any websites referenced
in this Annual Report on Form 10-K is not incorporated by reference into this
Annual Report on Form 10-K.

COVID-19 Response

On March 11, 2020, the World Health Organization formally declared the outbreak
of the novel coronavirus COVID-19 to be a pandemic. A summary of significant
actions the Company took in response to COVID-19 through December 31, 2020 is
disclosed in our 2020 Annual Report on form 10-K filed with the SEC on March 4,
2021. Below is a summary of significant subsequent developments in our COVID-19
response:

•We continue to take steps to protect employees with the goals of maintaining
their health and sustaining an adequate workforce, including employees working
from home and offering flexibility for employees negotiating scheduling
conflicts due to the impacts of COVID-19, such as caring for family, alternative
arrangements and shutdowns for business and schools, self-isolation or personal
illness, including granting additional paid time off for vaccinations and to
address these hardships.

•We suspended our summer Internship Program for 2020, and in 2021 piloted a
program which combined both virtual and in-person elements for a small group of
interns. In 2022, we will be offering a hybrid program with virtual and
in-person elements, to an expanded group of interns.

•We have developed and are continually refining our return-to-office plans for
our locations. Beginning in June 2021, we gradually re-introduced more employees
to our office locations but had to lessen our in-office presence in the latter
part of the year due to a surge in the Omicron variant. We are continually
monitoring the situation with a longer-term plan to offer employees hybrid work
schedules, where possible.

Although we have been able to maintain our business operations since the onset
of the pandemic, no assurance can be given that these actions will continue to
be successful, nor can we predict the level of disruption that will occur should
the COVID-19 pandemic and its related macroeconomic risks continue for further
extended periods of time. Given this uncertainty, we are unable to quantify with
reasonable confidence the total expected impact of the COVID-19 pandemic on our
future operations, financial condition, liquidity and results of operations. The
wide-ranging social, economic and financial consequences of the COVID-19
pandemic and the possible effects of ongoing and future governmental action in
response to COVID-19 compound this uncertainty. Additional information regarding
risks and uncertainties related to the COVID-19 pandemic are set forth in Part
I, Item 1A, Risk Factors. For additional information regarding the direct and
indirect impact to mortality refer to Part II, Item 7, MD&A, Life.

This MD&A should be read in conjunction with our consolidated financial
statements and related notes included in Part II, Item 8, Financial Statements
and Supplementary Data.

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ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS - (Continued)

Overview

American National Group, Inc. ("ANAT") is a family of companies that has $31.3
billion in assets, $24.3 billion in liabilities and $7.0 billion in
stockholders' equity as of December 31, 2021. American National Insurance
Company ("ANICO"), founded in 1905 and headquartered in Galveston, Texas, and
other ANAT subsidiaries offer a broad spectrum of products and services, which
include life insurance, annuities, property and casualty insurance, health
insurance, credit insurance, and pension products. The American National
companies operate in all 50 states, the District of Columbia and Puerto Rico. In
addition to ANICO, major subsidiaries include American National Life Insurance
Company of Texas, American National Life Insurance Company of New York, American
National Property and Casualty Company, Garden State Life Insurance Company,
Standard Life and Accident Insurance Company, Farm Family Casualty Insurance
Company and United Farm Family Insurance Company.

Our business has been and will continue to be influenced by several
industry-wide, segment or product-specific trends and conditions. In our
discussion below, we first outline the broad macro-economic or industry trends
(General Trends) that we expect to impact our overall business. Second, we
discuss certain segment-specific trends we believe may impact individual
segments or specific products within these segments.

General Trends

Our business, financial condition and results of operations are materially
affected by economic and financial market conditions. The U.S. and global
economies, as well as the capital markets, continue to show mixed signals, and
uncertainties continue to be significant factors in the markets in which we
operate. Factors such as consumer spending, business investment, the volatility
of the capital markets, the level of interest rates, unemployment, the level of
participation in the workforce and the risk of inflation or deflation will
affect the business and economic environment and, in turn, impact the demand for
the type of financial and insurance products we offer. Adverse changes in the
economy could have a material adverse effect on us. However, we believe those
risks are somewhat mitigated by our financial strength, active enterprise risk
management and disciplined underwriting for our products. Our diverse product
mix and distribution channels across insurance segments is a strength that we
expect will help us adapt to the volatile economic environment and give us the
ability to serve the changing needs of our customers. Additionally, through our
long-term business approach, we believe we are financially strong, and we are
committed to providing a steady and reliable source of financial protection for
policyholders.

Interest Rates: The low-interest rate environment is a challenge for life and
annuity insurers as the spreads on deposit-type contracts remain narrow,
especially as interest rates have approached minimum crediting rates. Low market
interest rates reduce the spreads between the amounts we credit to fixed annuity
and individual life policyholders and the amounts we earn on the investments
that support these obligations. Our ALM Committee actively manages the
profitability of these blocks of business. In previous years, we reduced the
guaranteed minimum crediting rates on new fixed annuity contracts, which has
afforded us the flexibility to respond to the unusually low-interest rate
environment. We have also reduced crediting rates on in-force contracts, where
permitted to do so. These actions help mitigate the adverse impact of low
interest rates on the profitability of these products, although sales volume may
be negatively impacted as a result. We also maintain assets with various
maturities to support product liabilities and ensure liquidity. A gradual
increase in longer-term interest rates relative to short-term rates generally
will have a favorable effect on the profitability of our products. Rapidly
rising interest rates could result in reduced persistency of our spread-based
products, if contract holders shift assets into higher yielding investments. We
believe our ability to react quickly to the changing marketplace will help us
manage this risk.

The interest rate environment affects estimated future profit projections, which
could impact the amortization of our DAC assets and the estimates of
policyholder liabilities. Significantly lower future estimated profits may cause
us to accelerate the amortization of DAC or require us to establish additional
policyholder liabilities, thereby reducing earnings. We periodically review
assumptions with respect to future earnings to ensure they remain appropriate
considering the current interest rate environment.

Low interest rates are also challenging for property and casualty insurers.
Investment income is an important element in earning an acceptable return on
capital. Lower interest rates resulting in lower investment income require us to
achieve better underwriting results. We have adjusted policy prices to help
mitigate the adverse impact of low interest rates on our property and casualty
business.


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ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS - (Continued)

Changing Regulatory Environment: The insurance industry is primarily regulated
at the state level, although some life and annuity products and services are
also subject to U.S. federal regulation. We are regularly subjected to
additional or changing regulation that requires us to update systems, change
product structure, increase the amount of reporting or adopt changes to
distribution. These changes may increase the capital requirements for us and the
industry, increase operating costs, change our operating practices and change
our ability to provide products with pricing attractive to the marketplace.

Importance of Operating Efficiencies: The volatile economic environment and
costs associated with greater regulation create a further need for operating
efficiencies. We manage our cost base while maintaining our commitment to
provide superior customer service to policyholders and agents. Investments in
technology are coordinated through a disciplined project management process. We
anticipate continuous improvement in our use of technology to enhance our
policyholders' and agents' experience and increase our overall operating
effectiveness.

Increased Role of Advanced Technology: The use of mobile technology has changed
the way consumers want to conduct their business, including real-time access to
information. Many customers expect to complete transactions in a digital format
instead of traditional methods that require a phone call or submission of paper
forms. Social media and other customer-facing technologies also reshape the way
companies communicate and collaborate with key stakeholders, and new tools exist
to better collect and analyze information for potential business opportunities
and better management of risks. For example, we have mobile-enabled all
internet-based access and leveraged social media channels to reach out to
potential customers to promote awareness of the company, including the products
and services offered. We expect that technology will continue to evolve,
offering new and more effective ways to reach and service our customers and
shareholders. We evaluate available and evolving technologies and incorporate
those we believe offer appropriate benefits to the company and its customers.

Continued Challenges of Talent Attraction and Retention: Attracting qualified
individuals and retaining existing employees continues to be a challenge for
employers. Businesses have become extremely competitive in the ever-changing
landscape of the talent marketplace. As a result, it is an increasing challenge
to distinguish us as an employer of choice.

To address these challenges, we continue to seek out new and expanded uses for
technology and social media that enhance our employer brand and educate
candidates on the many benefits of working for us. Our planning and outreach
efforts to develop a more diverse and inclusive workplace continue and help to
strengthen the engagement of current employees as well as attract future
employees. We continue to amplify the voice of our employees with regular
surveys which help us grow and innovate. We actively value the perspectives that
each employee brings and encourage broader employee influence on how decisions
are made. As a result, we continue to experience increase in overall employee
engagement. Providing robust career development conversations and career paths,
personal growth opportunities and effective succession planning are also
important elements of our retention and employee development efforts.

During the COVID-19 pandemic, the Company has devoted key resources to make
employee health and safety a top priority. These efforts are having a positive
impact as reflected in recent employee engagement survey results. Additionally,
as we speak with candidates during the talent acquisition process, our
precautions and protocols to ensure employee safety have been important to them
when making the decision to join us. As we proceed though the pandemic, employee
safety, productivity and retention are vital to meeting business goals and
objectives.
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ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS - (Continued)

Life and Annuity

Effective management of invested assets and associated liabilities using
crediting rates and, where applicable, financial hedging instruments (which we
use as economic hedges of equity-indexed life and annuity products), is
important to the success of our Life and Annuity segments. Asset
"disintermediation," the risk of large outflows of cash at times when it is
disadvantageous to us to dispose of invested assets, is a risk associated with
these segments as are rates of mortality and surrenders that exceed our
assumptions.

Demographics: We believe a key driver shaping the actions of the life insurance
industry is the rising income protection, wealth accumulation and insurance
needs of an increasing number of retirees. As a result of increasing longevity
and uncertainty regarding the Social Security System and an ongoing transition
from defined benefit pension plans to 401(k) type retirement plans, retirees
will need to accumulate sufficient savings to support retirement income
requirements.

We believe we are well positioned to address the increasing need for savings
tools and income protection. We believe our overall financial strength and broad
distribution channels position us to respond with a variety of products for
individuals approaching retirement age, who seek information to plan for and
manage their retirement needs. We believe our products that offer guaranteed
income flows are well suited to serve this market.

Competitive Pressures: In recent years, the competitive landscape of the U.S.
life insurance industry has shifted. Established insurers are competing against
each other and also against new market entrants that are developing products to
attract the interest of the growing number of retirees. Competition exists in
terms of retaining and acquiring consumers' business and also in terms of access
to producers and distributors. Consolidation among distributors coupled with the
aging sales force remains a challenge among insurers. In addition, the increased
technological sophistication of consumers necessitates that insurers and
distributors invest significant resources in technology to adapt to consumer
expectations. We believe we possess sufficient scale, financial strength,
resources and flexibility to compete effectively.

We believe we will continue to be competitive in the life and annuity markets
through our broad line of products, diverse distribution channels, and
consistent high level of customer service. We modify our products to meet
customer needs and to expand our reach where we believe we can obtain profitable
growth.

Property and Casualty

We offer our personal and commercial property and casualty lines of business
primarily through our multiple line agencies. We favor a balanced, focused and
collaborative approach to both growth and profitability through the development
of successful agencies.

To acquire and retain profitable business, we use sophisticated pricing models
and risk segmentation, along with a focused distribution force. We believe this
approach allows us to make product enhancements and offer programs that are
charging an appropriate premium for the risk.

Demand for property and casualty credit-related insurance products continues to
increase. We continue to update credit-related insurance product offerings and
pricing to meet changing market needs, as well as adding new agents to expand
market share in the credit-related insurance market. We are reviewing and
implementing procedures to enhance customer service while, simultaneously,
looking for efficiencies to reduce administrative costs.

Competitive Pressures: The property and casualty insurance industry remains
highly competitive. Despite the competitive environment, we expect to identify
profitable opportunities through our strong distribution channels, expanding
geographic coverage, marketing efforts, new product development and pricing
sophistication.


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ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS - (Continued)

Health

As a result of the Healthcare Acts of 2010 new opportunities were created in the
limited benefit and supplemental product markets. In recent years, we built a
portfolio of such products to be sold in the worksite market as well as to
individuals. We believe that changes to the Healthcare Acts that removed the tax
consequences for not having health coverage and the current removal of
limitations on Short-Term Medical products could significantly increase our
production. We constantly monitor the legislative environment for new changes
that would impact our outlook on these products.

We also continue to expand our presence and product portfolio in the worksite
market to generate new opportunities in the broker market, as well as developing
and implementing a captive sales force.

We expect our Managing General Underwriter ("MGU") business to remain stable
during 2022. We generally retain only 10% of the premiums and risks produced by
MGUs. The majority of the revenue generated from this business is fee income
included in "Other income" of the Health segment's operating results.

We have decided to exit the Medicare Supplement market due to increasing pricing
pressures and deterioration of new sales and operational performance. Marketing
efforts are refocused to MGU, Worksite and Individual Supplemental lines of
business.

Sale of Equity Securities Portfolio

During the fourth quarter of 2021, we sold the majority of our equity securities
portfolio. Such sale was based upon senior management's assessment of market
conditions and the potential for changes in the U.S. federal corporate income
tax rate. The sale resulted in net proceeds of $1.7 billion and did not have a
significant impact on our stockholders' equity.

Proceeds from the sale of the equity securities portfolio will be reinvested
primarily in fixed income investments. We expect that such sale, coupled with
the reinvestment of proceeds in primarily fixed income investments, will have a
positive impact on our net investment income and cash flows, as well as on the
Risk Based Capital of our insurance company subsidiaries that held equity
security investments. Such actions will also mitigate fluctuations in net income
associated with non-cash earnings from net gains (losses) from the change in
fair value of equity securities.

Critical Accounting Estimates

The preparation of financial statements in accordance with GAAP requires
estimates and assumptions that often involve a significant degree of judgment.
These estimates and judgments include expectations of current and future
mortality, morbidity, persistency, claims and claim adjustment expenses,
recoverability of receivables, investment returns and interest rates which
extend well into the future. In developing these estimates there is inherent
uncertainty, and material changes to facts and circumstances may develop.
Although variability is inherent in these estimates, we believe the amounts as
reported are appropriate based upon the facts available upon compilation of the
consolidated financial statements.

On an ongoing basis, management reviews the estimates and assumptions used in
preparing the financial statements. If current facts and circumstances warrant
modifications in estimates and assumptions, our financial position and results
of operations as reported in the consolidated financial statements could change
significantly.

A description of these critical accounting estimates is presented below. Also,
see Part II, Item 8, Financial Statements and Supplementary Data - Notes to the
Consolidated Financial Statements for additional information.

Future Policy Benefits

Life and Annuity Liability for Unpaid Claims

Life Reserving-Principal assumptions used in the determination of the reserves
for future policy benefits are mortality, policy lapse rates, investment return,
inflation, expenses and other contingent events as appropriate to the respective
product type. Reserves for incurred but not reported ("IBNR") claims on life
policies are calculated using historical claims information. Reserves for
interest-sensitive and variable universal life insurance policies are equal to
the current account value calculated for the policyholder. Some of our universal
life policies contain secondary guarantees, for which additional reserves are
recorded based on the term of the policy.

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ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS - (Continued)

Annuity Reserving-Reserves for payout annuities with more than insignificant
amounts of mortality risk are calculated in accordance with the applicable
accounting guidance for limited pay insurance contracts. Benefit and maintenance
expense reserves are calculated by using assumptions reflecting our expectations
of future costs, including an appropriate margin for adverse deviation. These
assumptions are locked-in at issue and generally reflect pricing assumptions
from that period. If the resulting reserve would otherwise cause profits to be
recognized at the issue date, additional reserves are recorded. The resulting
recognition of profits would be gradual over the expected life of the contract.

Reserves for fixed deferred annuities are established equivalent to the account
value held on behalf of the policyholder. Reserves for indexed annuities are
calculated in accordance with derivative accounting guidance which defines a
host liability for return of principal and guaranteed interest, and an embedded
derivative liability for funded benefits in excess of the host guarantee.
Additional reserves for benefits that can exceed contract fund value, such as
lifetime income riders, are determined as needed in accordance with the
applicable accounting guidance. The profit recognition on deferred annuity
contracts is gradual over the expected life of the contract. No immediate profit
is recognized on the sale of the contract.

Key Assumptions-The following assumptions reflect our best estimates and may
impact our life and annuity reserves:

•Future lapse rates will remain reasonably consistent with our current
expectations;

•Mortality rates will remain reasonably consistent within standard industry
mortality table ranges; and

•Future interest spreads will remain reasonably consistent with our current
expectations.

Recoverability-At least annually, we test the adequacy of the net benefit
reserves (policy benefit reserves less DAC) recorded for life insurance and
annuity products. To perform the tests, we use our current best-estimate
assumptions as to policyholder mortality, persistency, maintenance expenses and
invested asset returns.

For interest-sensitive business, best-estimate assumptions are updated to
reflect observed changes based on experience studies and current economic
conditions. We reflect the effect of such assumption changes in DAC and reserve
balances accordingly. Due to the long-term nature of many of the liabilities,
small changes in certain assumptions may cause large changes in profitability.
In particular, changes in estimates of the future invested asset return have a
large effect on the degree of reserve adequacy and DAC recoverability.

For traditional business, a "lock-in" principle applies, whereby the assumptions
used to calculate the benefit reserves and DAC are set when a policy is issued
and do not change with changes in actual experience. These include margins for
adverse deviation in the event that actual experience differs from the original
assumptions.

Health Liability for Unpaid Claims

Health liabilities for unpaid claims are established using the following
methods:

Completion Factor Approach-This method assumes that the historical claim
patterns will be an accurate representation of unpaid claim liabilities. An
estimate of the unpaid claims is calculated by subtracting period-to-date paid
claims from an estimate of the ultimate "complete" payment for all incurred
claims in the period. Completion factors are calculated which "complete" the
current period-to-date payment totals for each incurred month to estimate the
ultimate expected payout.

Tabular Claims Reserves-This method is used to calculate the reserves for
long-term care and disability income blocks of business. These reserves rely on
published valuation continuance tables created using industry experience
regarding assumptions of continued morbidity and subsequent recovery. Reserves
are calculated by applying these continuance tables, along with appropriate
company experience adjustments, to the stream of contractual benefit payments.
These expected benefit payments are discounted at the required interest rate.

Future Policy Benefits-Reserves are equal to the aggregate of the present value
of expected future benefit payments, less the present value of expected future
premiums. Morbidity and termination assumptions are based on our experience or
published valuation tables when available and appropriate.


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ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS - (Continued)

Premium Deficiency Reserves-Deficiency reserves are established when the
expected future claim payments and expenses for a classification of policies are
in excess of the expected premiums for these policies. The determination of a
deficiency reserve takes into consideration the likelihood of premium rate
increases, the timing of these increases, future net investment income, and the
expected benefit utilization patterns. We have established premium deficiency
reserves for portions of the major medical business and the long-term care
business that are in run-off. The assumptions and methods used to determine the
deficiency reserves are reviewed periodically for reasonableness, and the
reserve amount is monitored against emerging losses.

Property and Casualty Liability for Unpaid Claims and Claim Adjustment Expenses

Liability for unpaid claims and Claim Adjustment Expense ("CAE")-Property and
casualty liability for unpaid claims and CAE are established to provide for the
estimated cost of settling and paying both reported as well as IBNR claims. The
two major categories of CAE are defense and cost containment expense, and
adjusting and other expense. The details of property and casualty liability for
unpaid claims are shown below (in thousands):

                         December 31, 2021                               

December 31, 2020

               Gross           Ceded            Net             Gross          Ceded            Net
Case       $   673,929      $  71,408      $   602,521      $   628,729      $ 60,081      $   568,648
IBNR           549,223         37,788          511,435          518,358        32,926          485,432
Total      $ 1,223,152      $ 109,196      $ 1,113,956      $ 1,147,087      $ 93,007      $ 1,054,080



Case Reserves-Reserves for reported losses are determined on either a judgment
or a formula basis, depending on the timing and type of the loss. The formula
reserve is a fixed amount for each claim of a given type based on historical
paid loss data for similar claims with a provision for claim inflation. Judgment
reserve amounts replace initial formula reserves and are set for each loss based
on facts and circumstances of each case and the expectation of damages. We
regularly monitor the adequacy of reserves on a case-by-case basis and change
the amount of such reserves as necessary.

IBNR-IBNR liabilities are estimated based on many variables including historical
statistical information, inflation, legal environment, economic conditions,
trends in claim severity and frequency as well as other factors affecting the
adequacy of claim reserves. Loss and premium data is aggregated by exposure
class and by accident year. IBNR liabilities are estimated by projecting
ultimate losses on each class of business and subtracting paid losses and case
reserves. Our overall reserve practice provides for ongoing claims evaluation
and adjustment based on the development of related data and other relevant
information pertaining to claims. Adjustments in aggregate reserves, if any, are
included in the results of operations for the period during which such
adjustments are made.

The property and casualty liabilities for unpaid claims are established to
recognize future development on reported losses for each line of business. The
estimation of these amounts is subject to significant uncertainty due to the
volatile nature of property and casualty insurance liabilities. The estimation
process is based significantly on the assumption that past developments are an
appropriate predictor of future events and involves a variety of actuarial
techniques that analyze experience, trends and other relevant factors. See the
following paragraphs as well as Part II, Item 8, Financial Statements and
Supplementary Data - Note 12, Liability for Unpaid Claims and Claim Adjustment
Expenses, of the Notes to the Consolidated Financial Statements for additional
information.

The evaluation process to determine liability for unpaid claims involves the
collaboration of underwriting, claims and actuarial departments. The process
also includes consultation with independent actuarial firms as part of our
process of gaining reassurance that claims and CAE liability estimate
sufficiently, all obligations arising from all losses incurred as of year-end.

Premium Deficiency Reserve-Deficiency reserves are recorded when the expected
claims payments and policy maintenance costs for a product line exceed the
expected premiums for that product line. The estimation of a deficiency reserve
considers the current profitability of a product line using anticipated claims,
CAE, and policy maintenance costs. The assumptions and methods used to determine
the need for deficiency reserves are reviewed periodically for reasonableness.
There were no reserves of this type at December 31, 2021 and December 31, 2020,
respectively.


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ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS - (Continued)

Property and Casualty Reserving Methodology-The following methods are utilized:

•Initial Expected Loss Ratio-This method calculates an estimate of ultimate
losses by applying an estimated loss ratio to actual earned premium for each
calendar/accident year. This method is appropriate for classes of business where
the actual paid or reported loss experience is not yet mature enough to
influence initial expectations of the ultimate loss ratios.

•Pegged Frequency and Severity-This method uses actual claims count data and
emergence patterns of older accident periods to project the ultimate number of
reported claims for a given accident year. A similar process projects the
ultimate average severity per claim so that the product of the two projections
results in a projection of ultimate loss for a given accident year.

•Bornhuetter-Ferguson-This method uses, as a starting point, either an assumed
Initial Expected Loss Ratio Method or Pegged Frequency and Severity method and
blends in the loss ratio or frequency and severity implied by the claims
experience to date by using loss development patterns based on our historical
experience. This method is generally appropriate where there are few reported
claims and an unstable pattern of reported losses.

•Loss or Expense Development (Chain Ladder)-This method uses actual loss or
defense and cost containment expense data and the historical development
profiles on older accident periods to project more recent, less developed
periods to their ultimate total. This method is appropriate when there is a
relatively stable pattern of loss and expense emergence and a relatively large
number of reported claims.

•Ratio of Paid Defense and Cost Containment Expense to Paid Loss
Development-This method uses the ratio of paid defense and cost containment
expense to paid loss data and the historical development profiles on older
accident periods to project more recent, less developed periods to their
ultimate total. In this method, an ultimate ratio of paid defense and cost
containment expense to paid loss is selected for each accident period. The
selected paid defense and cost containment expense to paid loss ratio is then
applied to the selected ultimate loss for each accident period to estimate the
ultimate defense and cost containment expense. Paid defense and cost containment
expense is then subtracted from the ultimate defense and cost containment
expense to calculate the unpaid defense and cost containment expense for that
accident period.

•Calendar Year Paid Adjusting and Other Expense to Paid Loss-This method uses a
selected prior calendar years' paid expense to paid loss ratio to project
ultimate loss adjustment expenses for adjusting and other expense. A percentage
of the selected ratio is applied to the case reserves (depending on the line of
insurance) and 100% to the indicated IBNR reserves. These ratios assume that a
percentage of the expense is incurred when a claim is opened and the remaining
percentage is paid throughout the claim's life.

The basis of our selected single point best estimate on a particular line of
business is often a blended result from two or more methods (e.g. weighted
averages). Our estimate is highly dependent on actuarial and management judgment
as to which method(s) is most appropriate for a particular accident year and
class of business. Our methodology changes over time, as new information emerges
regarding underlying loss activity and other factors.

Key Assumptions-The following assumptions reflect our best estimates and may
impact our property and casualty reserves:

•The expected loss development patterns, estimated primarily using our
historical loss experience;

•The expected loss ratios, claim frequency and severity, estimated primarily
using our historical loss experience;

•Consistent claims handling, reserving and payment processes;

•No unusual growth patterns or unexpected changes in the mix of business; and

•No significant prospective changes in laws that would significantly affect
future payouts.

Management believes our reserves at December 31, 2021 are adequate. New
information, regulation, events or circumstances unknown at the original
valuation date, however, may result in future development resulting in ultimate
losses being significantly greater or less than the recorded reserves at
December 31, 2021.

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ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS - (Continued)

Deferred Policy Acquisition Costs (DAC)

We had a DAC asset of approximately $1.5 billion and $1.4 billion at
December 31, 2021 and 2020, respectively. See Part II, Item 8, Financial
Statements and Supplementary Data - Note 10, Deferred Policy Acquisition Costs,
of the Notes to the Consolidated Financial Statements for additional details.

We believe the estimates used in our DAC calculations provide insight into how
variations in assumptions and estimates would affect our business. The following
table displays the sensitivity of reasonably likely changes in assumptions in
the DAC amortization for our long-duration business at December 31, 2021 (in
thousands):

                                                                          Increase (Decrease) in
                                                                                   DAC
Increase in future investment margins of 25 basis points                 $              50,772
Decrease in future investment margins of 25 basis points                               (57,127)
Decrease in future life mortality by 1%                                                  2,189
Increase in future life mortality by 1%                                                 (2,258)



Allowance for Credit Losses

On January 1, 2020, we adopted ASC 326, Financial Instruments-Credit Losses,
accounting guidance related to the allowance for credit losses. The new standard
significantly changed how entities measure credit losses for most financial
assets and reinsurance recoverables that are not measured at fair value through
net income. The guidance replaced the current "incurred loss" approach with an
"expected loss" model for instruments measured at amortized cost. Refer to Part
II, Item 8, Financial Statements and Supplementary Data - Note 4, Investment in
Securities, and Note 5, Mortgage Loans, of the Notes to the Consolidated
Financial Statements for further discussion of the accounting policies and
methodologies for establishing the allowance for credit losses.

The accounting estimates relating to the allowance for credit losses over
financial assets held at amortized cost have been evaluated and monitored since
adoption and management has deemed these estimates to be critical for the
following reasons:

•Changes in the provision for credit losses can be material to the financial
position and results of operations for the Company;

•Estimates relating to the allowance for credit losses require us to project
future cash flows, delinquencies, collateral values, occupancy rates,
prepayments based on a reasonable and supportable forecast in order to estimate
probability of default and the loss given default;

•The allowance for credit losses is also affected by factors outside of our
control including, but not limited to, market volatility, deterioration in the
credit or prospects of companies and governmental entities, political
uncertainty, industry trends, pandemics, and trends in interest rates; and

•Management judgment is required to determine which models, methodologies, and
scenario conditions are used to calculate the allowance for credit losses to
produce a reasonable estimate that encompasses the expected lifetime credit
losses.

Since our estimate for the allowance for credit losses relies on management
judgment and is sensitive to factors outside of our control, as noted above,
there are inherent uncertainties within the estimates. As a result, the changes
in the allowance for credit losses could materially impact our consolidated
financial statements.


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ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS - (Continued)

Valuation of Financial Instruments

The fair value of available-for-sale fixed maturity and equity securities is
determined by management using one of the three primary sources of information:
the quoted prices in active markets, third-party pricing services, or
independent broker quotations. Estimated fair value of securities based on
quoted prices in active markets is readily and regularly available; therefore,
valuation of these securities generally does not involve management judgment.
For securities without quoted prices, fair value measurement is determined using
third-party pricing services' proprietary pricing applications. Typical inputs
used by the models are relevant market information, benchmark curves, benchmark
pricing of like securities, sector groupings and matrix pricing. Any securities
remaining unpriced after utilizing the first two pricing methods are submitted
to independent brokers for prices. We have analyzed the third-party pricing
services and independent brokers' valuation methodologies and related inputs,
and have evaluated the various types of securities in our investment portfolio
to determine an appropriate fair value hierarchy level based upon trading
activity and the observability of market inputs. Management completes certain
tests throughout the year and at year-end to determine that prices provided by
our pricing services are reasonable.

The Company sells equity-indexed universal life and equity-indexed deferred
annuity contracts with guaranteed minimum benefits, some of which contain
embedded derivatives that are required to be bifurcated from a host reserve,
separately accounted for, and measured at fair value. We utilize
over-the-counter equity options to hedge our exposure to equity-indexed
universal life and equity-indexed deferred annuity benefits, and the fair values
for these options are sourced from broker quotations. Accounting guidance
requires a fair value calculation as part of equity-indexed policy
reserves. This is called the value of embedded derivative ("VED") and the other
part of the indexed policy reserve is called the host reserve. The embedded
derivative represents future benefit cash flows in excess of the minimum
guarantee cash flows. The host covers the minimum guarantee cash flows. Both the
VED and the host reserve are calculated by a vendor-sourced reserve valuation
system. The VED calculation model incorporates assumptions related to current
option pricing (such as implied volatility and interest rates), future
policyholder behavior (such as surrenders and withdrawals), and factors
affecting the value of future indexed interest periods (such as option budgets).
These assumptions are evaluated annually by management with any changes in the
estimated fair value resulting in a cumulative charge or credit to income from
operations.

Litigation Contingencies

Based on information currently available, we believe that amounts ultimately
paid, if any, arising from existing and currently potential litigation would not
have a material effect on our results of operations and financial condition.
However, it should be noted that the frequency of large damage awards, which
bear little or no relation to the economic damages incurred by plaintiffs,
continues to create the potential for an unpredictable judgment in any given
lawsuit. It is possible that, if the defenses in these lawsuits are not
successful, and the judgments are greater than we anticipate, the resulting
liability could have a material impact on the consolidated financial statements.

Segments

Our insurance segments do not directly own assets. Rather, assets are allocated
to support the liabilities and capital allocated to each segment. The mix of
assets allocated to each of the insurance segments is intended to support the
characteristics of the insurance liabilities within each segment including
expected cash flows and pricing assumptions, and is intended to be sufficient to
support each segment's business activities. We have utilized this methodology
consistently over all periods presented.

The Corporate and Other segment acts as the owner of all invested assets of the
Company. The investment income from the invested assets is allocated to the
insurance segments in accordance with the assets allocated to each insurance
segment. Earnings of the Corporate and Other segment are derived from income
related to invested assets not allocated to the insurance segments and from our
non-insurance subsidiaries. All realized investment gains and losses, which
includes other-than-temporary impairments ("OTTI") and credit losses, are
recorded in this segment.
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ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS - (Continued)

Consolidated Results of Operations

The following sets forth the consolidated results of operations (in thousands):

                                                                    Years ended December 31,                             Change over prior year
                                                         2021                 2020                 2019                 2021                 2020
PREMIUMS AND OTHER REVENUES
Premiums                                            $ 2,301,053          $ 

2,218,074 $ 2,182,794 $ 82,979 $ 35,280
Other policy revenues

                                   359,707              310,746              305,256                48,961               5,490
Net investment income                                 1,171,654              976,152            1,180,907               195,502            (204,755)
Net realized investment gains                            64,628               35,660               30,751                28,968               4,909
(Increase) decrease in investment credit loss            28,778             (102,603)                   -               131,381            (102,603)
Net gains on equity securities                          420,283              356,281              422,535                64,002             (66,254)
Other income                                             45,688               40,556               51,401                 5,132             (10,845)
Total premiums and other revenues                     4,391,791            3,834,866            4,173,644               556,925            (338,778)
BENEFITS, LOSSES AND EXPENSES
Policyholder benefits                                   755,655              748,083              667,828                 7,572              80,255
Claims incurred                                       1,192,155            1,121,742            1,151,166                70,413             (29,424)
Interest credited to policyholders' account
balances                                                448,654              321,042              511,999               127,612            (190,957)
Commissions for acquiring and servicing
policies                                                640,097              553,600              532,634                86,497              20,966
Other operating expenses                                571,869              515,413              524,888                56,456              (9,475)
Change in deferred policy acquisition costs
(1)                                                     (79,632)              (5,678)             (12,749)              (73,954)              7,071
Total benefits, losses and expenses                   3,528,798            3,254,202            3,375,766               274,596            (121,564)
Income before federal income taxes and other
items                                               $   862,993          $  

580,664 $ 797,878 $ 282,329 $ (217,214)

(1)A negative change indicates more expense was deferred than amortized and
represents a decrease to expenses in the period indicated.

Comparison of the year ended December 31, 2021 to 2020

Earnings increased primarily due to the following:

•An increase in net investment income driven by increases from investment funds
and mortgage loan profit participation and prepayment income

•A favorable change in investment credit loss due to improvement in our
commercial mortgage loans driven by improvement in cash flows and a positive
economic outlook from our properties, and improving conditions in travel and
leisure

The increase in earnings was partially offset by the following:

•A decrease in Life segment earnings driven by an overall increase in mortality
which includes claims directly and indirectly attributable to COVID-19

•A decrease in Property and Casualty segment earnings driven by an increase in
net catastrophe losses and higher claim frequency in our personal automobile
products as miles driven have increased

•An increase in operating expenses primarily due to Merger-related expenses of
$21.5 million

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ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS - (Continued)

Life

Life segment financial results for the periods indicated were as follows (in
thousands):

                                                                 Years ended December 31,                             Change over prior year
                                                        2021                2020               2019                   2021                  2020
PREMIUMS AND OTHER REVENUES
Premiums                                            $  412,769          $ 396,099          $ 359,419          $      16,670              $ 36,680
Other policy revenues                                  336,136            295,263            288,061                 40,873                 7,202
Net investment income                                  277,962            261,389            263,788                 16,573                (2,399)
Other income                                             1,577              2,084              1,967                   (507)                  117
Total premiums and other revenues                    1,028,444            954,835            913,235                 73,609                41,600
BENEFITS, LOSSES AND EXPENSES
Policyholder benefits                                  605,724            533,925            449,252                 71,799                84,673
Interest credited to policyholders' account
balances                                                84,005             75,943             80,950                  8,062                (5,007)
Commissions for acquiring and servicing
policies                                               186,470            167,548            162,203                 18,922                 5,345
Other operating expenses                               195,127            182,395            190,104                 12,732                (7,709)
Change in deferred policy acquisition costs
(1)                                                    (50,134)           (53,756)           (26,036)                 3,622               (27,720)
Total benefits, losses and expenses                  1,021,192            906,055            856,473                115,137                49,582
Income before federal income taxes and other
items                                               $    7,252          $  48,780          $  56,762          $     (41,528)             $ (7,982)

(1)A negative change indicates more expense was deferred than amortized and
represents a decrease to expenses in the period indicated.

Comparison of the year ended December 31, 2021 to 2020

Earnings for our Life segment decreased primarily due to the following:

•An overall increase in mortality which includes claims directly and indirectly
attributable to COVID-19

The decrease in earnings was partially offset by the following:

•Strong persistency resulting in an increase in premiums and other policy
revenues

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ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS - (Continued)

Life Insurance Sales

The following table presents life insurance sales as measured by annualized
premium, which allows a comparison of new policies sold by an insurance company
during the period (in thousands):

                                      Years ended December 31,              

Change over prior year

                                 2021           2020           2019                2021               2020
Traditional Life              $  64,178      $  62,044      $  56,681      $      2,134            $  5,363
Universal Life                   32,989         28,900         28,673             4,089                 227
Indexed UL                       36,333         30,643         36,906             5,690              (6,263)

Total recurring                 133,500        121,587        122,260            11,913                (673)
Single and excess (1)             2,097          1,509          2,193               588                (684)
Credit life (1)                   7,714          8,140         10,723              (426)             (2,583)

Total annualized premium $ 143,311 $ 131,236 $ 135,176 $ 12,075

            $ (3,940)

(1)Weighted amounts with single and excess premiums counted at 10%

Life insurance sales are based on the total yearly premium that insurance
companies would expect to receive if all recurring premium policies remain
in-force, plus 10% of single and excess premiums. Life insurance sales measure
activity associated with gaining new insurance business in the current period,
and includes deposits received related to interest sensitive life and universal
life-type products. Whereas GAAP premium revenues are associated with policies
sold in current and prior periods, and deposits received related to interest
sensitive life and universal life-type products are recorded in a policyholder
account which is reflected as a liability. Therefore, a reconciliation of
premium revenues and insurance sales is not meaningful.

Total Life sales increased 9.2% during the twelve months ended December 31, 2021
compared to 2020 as new life sales rebounded from the COVID-19 economic
uncertainties and social distancing practices during 2020.

Policy In-force Information

The following table summarizes changes in the Life segment's in-force amounts
(in thousands):

                                                                                 December 31,                                       Change over prior year
                                                              2021                   2020                   2019                  2021                 2020
Life insurance in-force
Traditional life                                        $  98,142,544          $  91,920,577          $  84,129,193          $ 6,221,967          $  7,791,384
Interest-sensitive life                                    38,789,008             36,326,621             33,975,092            2,462,387             2,351,529
Total life insurance in-force                           $ 136,931,552          $ 128,247,198          $ 118,104,285          $ 8,684,354          $ 10,142,913



The following table summarizes changes in the Life segment's number of policies
in-force:

                                                                                    December 31,                                            Change over prior year
                                                                 2021                    2020                   2019                   2021                         2020
Number of policies in-force
Traditional life                                                1,696,145               1,832,536             1,911,305              (136,391)                     (78,769)
Interest-sensitive life                                           281,380                 269,668               256,146                11,712                       13,522
Total number of policies in-force                               1,977,525               2,102,204             2,167,451              (124,679)                     (65,247)

Life insurance in-force increased during the twelve months ended December 31,
2021 compared to 2020 despite a reduction of policies in-force due to an
increase in sales of higher face amount policies.

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ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS - (Continued)

Change in Deferred Policy Acquisition Costs

The change in DAC represents acquisition costs capitalized less the amortization
of existing DAC. The following shows the components of the change in DAC (in
thousands):

                                                                Years ended December 31,                             Change over prior year
                                                      2021                2020                2019                   2021                  2020
Acquisition cost capitalized                      $ (161,898)         $ (148,142)         $ (139,336)         $    (13,756)            $  (8,806)
Amortization of DAC                                  111,764              94,386             113,300                17,378               (18,914)
Change in DAC                                     $  (50,134)         $  (53,756)         $  (26,036)         $      3,622             $ (27,720)



Reinsurance

The table below summarizes reinsurance reserves and premium amounts assumed and
ceded (in thousands):

                                           Reserves                                      Premiums
                                   Years ended December 31,                      Years ended December 31,
                             2021            2020            2019           2021           2020           2019
Reinsurance assumed      $    2,902      $    1,067      $    1,103      $   5,035      $   1,419      $     507
Reinsurance ceded          (221,898)       (195,251)       (203,011)       (87,721)       (77,444)       (86,017)
Total                    $ (218,996)     $ (194,184)     $ (201,908)     $ (82,686)     $ (76,025)     $ (85,510)



We use reinsurance to mitigate certain risks to the Life segment. During 2021,
our retention limits were $5.0 million for issue ages 75 and under, and $2.0
million for issue ages 76 through 80, and $1.0 million for issue ages 81 and
older for traditional and universal life. In our Life segment, we currently
retain 100% of newly developed permanent and term products up to our retention
limit and cede the excess. American National utilizes facultative reinsurance
when a case requires support that does not follow the Company's standard
underwriting guidelines. Accidental death and premium waiver benefits are mostly
retained on new business. The reduction in reinsurance ceded is due to a change
in retention limits effective January 1, 2019.

For 2021, the companies to whom we have ceded reinsurance for the Life segment
are shown below (in thousands, except percentages):

                                                                                                                   Percentage of
Reinsurer                                              A.M. Best Rating (1)            Ceded Premium               Ceded Premium
Swiss Re Life & Health of America Inc.                          A+                   $       25,133                            30.1  %
SCOR Global Life Reinsurance Company of
Delaware                                                        A+                           18,039                            21.6
Munich American Reassurance Company                             A+                           13,091                            15.7
Canada Life Reinsurance                                         A+                            7,543                             9.0
Reinsurance Group of America                                    A+                            5,576                             6.7
General Re Life Corporation                                    A++                            4,807                             5.8
Other Reinsurers with no single company with
greater than 5% of the total ceded premium                                                    9,262                            11.1
Total life reinsurance ceded                                                         $       83,451                           100.0  %

(1)A.M. Best rating as of the most current information available February 9,
2022.

In addition, reinsurance is used in the credit life business primarily to
provide producers of credit-related insurance products the opportunity to
participate in the underwriting risk through producer-owned captive reinsurance
companies often domiciled outside of the United States. A majority of the
treaties entered into by our Specialty Markets Group are written on a 100%
coinsurance basis with benefit limits of $0.1 million on credit life.

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ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS - (Continued)

Annuity

Annuity segment financial results for the periods indicated were as follows (in
thousands):

                                                                Years ended December 31,                          Change over prior year
                                                       2021              2020               2019                  2021                  2020
PREMIUMS AND OTHER REVENUES
Premiums                                            $ 74,925          $ 92,866          $ 147,139          $    (17,941)            $ (54,273)
Other policy revenues                                 23,571            15,483             17,195                 8,088                (1,712)
Net investment income                                629,417           570,003            663,895                59,414               (93,892)
Other income                                           3,282             2,716              2,727                   566                   (11)
Total premiums and other revenues                    731,195           681,068            830,956                50,127              (149,888)
BENEFITS, LOSSES AND EXPENSES
Policyholder benefits                                149,931           214,158            218,576               (64,227)               (4,418)
Interest credited to policyholders' account
balances                                             364,649           245,099            431,049               119,550              (185,950)
Commissions for acquiring and servicing
policies                                              98,842            55,910             71,350                42,932               (15,440)
Other operating expenses                              53,379            48,359             50,507                 5,020                (2,148)
Change in deferred policy acquisition costs
(1)                                                  (22,838)           48,298              9,474               (71,136)               38,824
Total benefits, losses and expenses                  643,963           611,824            780,956                32,139              (169,132)
Income before federal income taxes and other
items                                               $ 87,232          $ 69,244          $  50,000          $     17,988             $  19,244

(1)A negative change indicates more expense was deferred than amortized and
represents a decrease to expenses in the period indicated.

Comparison of the year ended December 31, 2021 to 2020

Earnings for our Annuity segment increased primarily due to the following:

•An increase in net investment income due to higher option gains resulting from
favorable market conditions

•A favorable mark-to-market impact to equity-indexed annuity reserves primarily
due to higher treasury rates

•Lower DAC amortization for fixed deferred products due to an increase in
estimated gross profits driven by higher projected future interest rates
compared to previous expectations

The increase in earnings was partially offset by the following:

•A change in estimate in the fourth quarter of 2020 related to our
equity-indexed annuity products that resulted in an increase of $23.0 million in
earnings from our Annuity segment. The impacts of the change in estimate consist
of an increase to policyholder benefits of $47.1 million, deferred policy
acquisition costs of $26.3 million and a reduction in interest credited to
policyholders' account balances of $96.4 million

Annuity premium and deposit amounts received are shown below (in thousands):

                                                                  Years ended December 31,                           Change over prior year
                                                        2021                2020               2019                 2021                 2020
Fixed deferred annuity                              $  920,541          $

366,384 $ 944,128 $ 554,157 $ (577,744)
Single premium immediate annuity

                        90,336            125,175             203,314               (34,839)            (78,139)
Equity-indexed deferred annuity                        793,068            394,178             330,744               398,890              63,434
Variable deferred annuity                               62,719             60,279              69,178                 2,440              (8,899)
Total premium and deposits                           1,866,664            946,016           1,547,364               920,648            (601,348)
Less: Policy deposits                                1,791,739            853,150           1,400,225               938,589            (547,075)
Total earned premiums                               $   74,925          $  92,866          $  147,139          $    (17,941)         $  (54,273)

Annuity premiums and deposits increased primarily for equity-indexed and fixed
deferred products during the year ended December 31, 2021 compared to 2020
reflecting improved competitiveness of the product. The decrease in earned
premium is due to a decline in single premium annuity sales.

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ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS - (Continued)

Change in Deferred Policy Acquisition Costs

The change in DAC represents acquisition costs capitalized less the amortization
of existing DAC, which is calculated in proportion to expected gross profits.
The following shows the components of the change in DAC (in thousands):

                                                               Years ended December 31,                            Change over prior year
                                                      2021               2020               2019                   2021                  2020
Acquisition cost capitalized                      $ (99,971)         $ (55,411)         $ (70,272)         $     (44,560)             $ 14,861
Amortization of DAC                                  77,133            103,709             79,746                (26,576)               23,963
Change in DAC                                     $ (22,838)         $  48,298          $   9,474          $     (71,136)             $ 38,824



The change in acquisition costs capitalized relates to increased commissions
from sales. The change in amortization of DAC includes the unlocking of
assumptions to our equity-indexed annuities largely offset by the effects of
increases in interest rates, and as mentioned above, the change in estimate
related to our equity-indexed annuities resulted in a $26.3 million increase in
the amortization of DAC in 2020.

Shown below are the changes in reserve (in thousands):

                                                   Years ended December 31,
                                           2021              2020              2019
Fixed deferred annuity
Reserve, beginning of period          $  6,635,203      $  6,893,174      $  6,773,603
Premiums                                   920,541           366,384           944,128
Death and other benefits                  (234,912)         (215,330)         (237,346)
Surrenders                                (484,048)         (594,253)         (787,617)
Fees                                        (1,557)             (968)           (2,616)
Interest and mortality                     184,060           186,196           203,022
Reserve, end of period                   7,019,287         6,635,203         6,893,174
Equity-indexed annuity
Reserve, beginning of period             4,097,012         3,985,165         3,668,645
Premiums                                   793,068           394,178           330,744
Death and other benefits                   (57,070)          (48,451)          (40,670)
Surrenders                                (298,181)         (331,359)         (193,957)
Fees                                        (3,358)           (2,990)           (3,640)
Interest and mortality                     176,620           100,469           224,043

Reserve, end of period                   4,708,091         4,097,012         3,985,165
Single premium immediate annuity
Reserve, beginning of period             1,851,955         1,874,942         1,826,137
Premiums                                    90,336           125,175           203,314
Payments                                  (203,115)         (218,469)         (216,782)
Interest and mortality                      60,767            70,307            62,273
Reserve, end of period                   1,799,943         1,851,955         1,874,942
Variable deferred annuity
Reserve, beginning of period               418,508           385,735           332,898
Premiums                                    62,719            60,279            69,178
Other flows                                    614             1,356               (97)
Surrenders                                 (79,465)          (87,068)          (85,994)
Fees                                        (5,262)           (4,479)           (4,703)
Change in market value and other            58,036            62,685            74,453
Reserve, end of period                     455,150           418,508           385,735
Total reserve, end of period          $ 13,982,471      $ 13,002,678      $ 13,139,016



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ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS - (Continued)

Interest and Mortality Margin

Margins decreased for fixed annuities over the past two years due to declining
portfolio rates and increased for indexed annuities in 2020 due to the
aforementioned change in estimate. The increased margin for indexed annuities
was sustained in 2021 due to the favorable impact of increases in treasury rates
on mark-to-market reserves. The following table summarizes the interest margin
due to the impact of the investment performance, interest credited to
policyholder's account balances, and the end of period assets measured by
account balance (in thousands):

                                                                 Years ended December 31,                           Change over prior year
                                                        2021               2020               2019                  2021                  2020
Fixed annuity
Fixed investment income                             $ 352,392          $ 369,795          $ 384,700          $    (17,403)            $ (14,905)
Interest credited and mortality                      (244,827)          (256,503)          (265,295)               11,676                 8,792
Interest and mortality margin                         107,565            113,292            119,405                (5,727)               (6,113)
Equity-indexed annuity
Fixed investment income                               174,479            160,271            152,101                14,208                 8,170
Option return                                         102,546             39,937            127,094                62,609               (87,157)
Interest credited and mortality                      (176,620)          (100,469)          (224,043)              (76,151)              123,574
Interest and mortality margin                         100,405             99,739             55,152                   666                44,587

Variable annuity
Separate account management fees                        5,073              4,164              4,122                   909                    42
Interest and mortality margin                           5,073              4,164              4,122                   909                    42
Total interest and mortality margin                 $ 213,043          $ 217,195          $ 178,679          $     (4,152)            $  38,516


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ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS - (Continued)

Health

Health segment financial results for the periods indicated were as follows (in
thousands):

                                                              Years ended December 31,                            Change over prior year
                                                     2021               2020               2019                   2021                   2020
PREMIUMS AND OTHER REVENUES
Premiums                                         $ 143,484          $ 168,805          $ 165,035          $     (25,321)              $ 3,770
Net investment income                                8,153              8,637              9,467                   (484)                 (830)
Other income                                        21,743             19,598             20,762                  2,145                (1,164)
Total premiums and other revenues                  173,380            197,040            195,264                (23,660)                1,776
BENEFITS, LOSSES AND EXPENSES
Claims incurred                                     98,029            116,122            109,013                (18,093)                7,109
Commissions for acquiring and servicing
policies                                            24,231             30,182             31,624                 (5,951)               (1,442)
Other operating expenses                            42,284             39,265             41,475                  3,019                (2,210)
Change in deferred policy acquisition
costs (1)                                            3,537               (307)             1,382                  3,844                (1,689)
Total benefits, losses and expenses                168,081            185,262            183,494                (17,181)                1,768
Income before federal income taxes and
other items                                      $   5,299          $  11,778          $  11,770          $      (6,479)              $     8

(1)A negative change indicates more expense was deferred than amortized and
represents a decrease to expenses in the period indicated.

Comparison of the year ended December 31, 2021 to 2020

Earnings for our Health segment decreased primarily due to the following:

•An increase in the amortization of deferred policy acquisition costs ("DAC")
related to corrective actions impacting contract issue and administration
processes, as well as an increase in claims in our Worksite line of business
driven by short-term disability

•A reduction in premiums and an increase in DAC amortization driven by policy
lapses in our Medicare Supplement line of business

The decrease in earnings was partially offset by the following:

•An increase in fee income from various MGU programs

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ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS - (Continued)

Health earned premiums for the periods indicated were as follows (in thousands):

                                    Years ended December 31,                

Change over prior year

                               2021           2020           2019                2021               2020

Medicare Supplement $ 70,679 $ 85,201 $ 78,779 $

    (14,522)           $ 6,422
MGU                            20,285         22,166         27,205             (1,881)            (5,039)

Supplemental insurance 14,076 18,586 21,633

    (4,510)            (3,047)
Credit Health                  13,140         14,576         17,938             (1,436)            (3,362)
Medical expense                 7,475          8,541          9,496             (1,066)              (955)
Worksite                       13,002         14,594          4,817             (1,592)             9,777
Group health                    1,766          1,809          1,964                (43)              (155)
All other                       3,061          3,332          3,203               (271)               129
Total                       $ 143,484      $ 168,805      $ 165,035      $     (25,321)           $ 3,770



Policy lapses as a result of rate increases drove a decrease in premiums for
Medicare Supplement during 2021. In addition, Supplemental insurance premiums
decreased due to a reduction in sales across all product lines, primarily in
short-term medical.

Health claims incurred for the periods indicated were as follows (in thousands):

                                    Years ended December 31,                  Change over prior year
                               2021          2020           2019                2021               2020

Medicare Supplement $ 54,324 $ 66,492 $ 63,705 $

   (12,168)           $ 2,787
MGU                           15,219         19,657         23,498             (4,438)            (3,841)

Supplemental insurance 7,409 9,945 8,508

   (2,536)             1,437
Credit Health                  3,673          3,501          3,400                172                101
Medical expense                5,434          7,212          5,857             (1,778)             1,355
Worksite                       9,744          6,732          1,958              3,012              4,774
Group health                     578          1,142            639               (564)               503
All other                      1,648          1,441          1,448                207                 (7)
Total                       $ 98,029      $ 116,122      $ 109,013      $     (18,093)           $ 7,109

Medicare Supplement claims decreased driven by policy lapses. In addition,
claims experience for our Medical Expense, MGU and Supplemental health lines of
business improved but was partially offset by an increase in short-term
disability claims from our Worksite line of business.

Change in Deferred Policy Acquisition Costs

The following table presents the components of the change in DAC (in thousands):

                                                               Years ended December 31,                         Change over prior year
                                                      2021               2020               2019                2021               2020
Acquisition cost capitalized                      $ (14,369)         $ (15,926)         $ (19,940)         $     1,557          $  4,014
Amortization of DAC                                  17,906             15,619             21,322                2,287            (5,703)
Change in DAC                                     $   3,537          $    (307)         $   1,382          $     3,844          $ (1,689)




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ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS - (Continued)

Reinsurance

We cede or retrocede the majority of the premium and risk associated with our
stop-loss and other MGU programs. We maintain reinsurance on a quota share basis
for our long-term care and long-term disability income business.

For 2021, the companies to which we have ceded reinsurance for the Health
segment are shown below (in thousands, except percentages):

                                                                                                                     Percentage of
Reinsurer                                                A.M. Best Rating (1)            Ceded Premium               Ceded Premium
Roundstone Insurance, Ltd.                                      N/A (2)                $       84,287                            29.4  %
RGA Reinsurance Company                                           A+                           39,975                            13.9
AXIS Insurance Company                                            A                            26,455                             9.2
PartnerRe America Insurance Company                               A+                           21,811                             7.6
Swiss Re Life & Health America Inc.                               A+                           16,098                             5.6
Transatlantic Reinsurance Company                                 A+                           15,516                             5.4
AmFirst Insurance Company                                         A-                           15,403                             5.4
Other reinsurers with no single company with
greater than 5.0% of the total ceded premium                                                   67,543                            23.5
Total health reinsurance ceded                                                         $      287,088                           100.0  %

(1) A.M. Best rating as of the most current information available February 9,
2022.

(2) N/A reflects no A.M. Best rating available.

We also utilize reinsurance in our credit health business. In certain cases, we
may also reinsure the policy written through non-U.S. producer-owned captive
reinsurers to allow the dealer to participate in the performance of these credit
health contracts. A majority of the treaties entered into by our Specialty
Markets Group are written on a 100% coinsurance basis with benefit limits of
$1,000 per month.

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ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS - (Continued)

Property and Casualty

Property and Casualty segment financial results for the periods indicated were
as follows (in thousands, except percentages):

                                                              Years ended December 31,                            Change over prior year
                                                   2021                 2020                 2019                 2021                2020
PREMIUMS AND OTHER REVENUES
Net premiums written                          $ 1,726,151          $

1,590,740 $ 1,546,144 $ 135,411 $ 44,596
Net premiums earned

                           $ 1,669,875          $ 

1,560,304 $ 1,511,201 $ 109,571 $ 49,103
Net investment income

                              62,140               63,949               64,263                (1,809)             (314)
Other income                                       15,807               12,779               11,897                 3,028               882
Total premiums and other revenues               1,747,822            1,637,032            1,587,361               110,790            49,671
BENEFITS, LOSSES AND EXPENSES
Claims incurred                                 1,094,126            1,005,620            1,042,153                88,506           (36,533)
Commissions for acquiring and servicing
policies                                          330,554              299,960              267,457                30,594            32,503
Other operating expenses                          213,486              202,503              201,580                10,983               923
Change in deferred policy acquisition
costs (1)                                         (10,197)                  87                2,431               (10,284)           (2,344)
Total benefits, losses and expenses             1,627,969            1,508,170            1,513,621               119,799            (5,451)
Income before federal income taxes and
other items                                   $   119,853          $   

128,862 $ 73,740 $ (9,009) $ 55,122
Loss and loss adjustment expense ratio

               65.5  %              64.5  %              69.0  %                1.0  %           (4.5) %
Underwriting expense ratio                           32.0                 32.2                 31.2                  (0.2)              1.0
Combined ratio                                       97.5  %              96.7  %             100.2  %                0.8  %           (3.5) %
Less: Impact of catastrophe events on
combined ratio                                        9.4                  9.2                  5.9                   0.2               3.3
Combined ratio without impact of
catastrophe events                                   88.1  %              87.5  %              94.3  %                0.6  %           (6.8) %
Gross catastrophe losses                      $   184,803          $   

176,824 $ 91,265 $ 7,979 $ 85,559
Net catastrophe losses

                        $   154,871          $   

140,512 $ 89,063 $ 14,359 $ 51,449

(1)A negative change indicates more expense was deferred than amortized and
represents a decrease to expenses in the period indicated.

Comparison of the year ended December 31, 2021 to 2020

Earnings for our Property and Casualty segment decreased primarily due to the
following:

•An increase in net catastrophe losses and higher claim frequency in our
personal automobile products as miles driven have increased

The decrease in earnings was partially offset primarily due to the following:

•Improvement in the combined ratio for our commercial and specialty markets
products

Additional Information:

•Net premiums written and earned were reduced by COVID-19 relief policy credits
of $1.9 million for personal automobile policies in 2021 compared to $16.8
million for the same period in 2020. Policy credits were $0.9 million for
commercial automobile policies in 2020

•The increase in commissions was primarily attributable to an increase in
premiums written for our specialty markets products. The growth in specialty
markets products was also the primary driver for the increase in operating
expenses and the deferral of policy acquisition expenses outpacing amortization

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ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS - (Continued)

Products

Our Property and Casualty segment consists of: (i) Personal products, marketed
primarily to individuals, representing 52% of net premiums written;
(ii) Commercial products, focused primarily on agricultural and other business
related markets, representing 30% of net premiums written; and (iii) Specialty
Markets Group products, marketed through independent managing general agents and
managing general underwriters, representing 18% of net premiums written.

Personal Products

Personal Products results for the periods indicated were as follows (in
thousands, except percentages):

                                                             Years ended December 31,                         Change over prior year
                                                    2021               2020               2019                2021                2020
Net premiums written
Automobile                                      $ 535,653          $ 540,645          $ 569,675          $    (4,992)         $ (29,030)
Homeowner                                         304,473            286,560            266,849               17,913             19,711
Other Personal                                     54,070             52,290             50,834                1,780              1,456
Total net premiums written                      $ 894,196          $ 879,495          $ 887,358          $    14,701          $  (7,863)
Net premiums earned
Automobile                                      $ 537,356          $ 536,376          $ 559,524          $       980          $ (23,148)
Homeowner                                         290,084            274,350            251,228               15,734             23,122
Other Personal                                     53,163             51,552             49,475                1,611              2,077
Total net premiums earned                       $ 880,603          $ 862,278          $ 860,227          $    18,325          $   2,051
Loss and loss adjustment expense ratio
Automobile                                           69.1  %            59.5  %            72.7  %               9.6  %           (13.2) %
Homeowner                                            88.6  %            87.7  %            79.2  %               0.9  %             8.5  %
Other Personal                                       54.3  %            62.0  %            58.0  %              (7.7) %             4.0  %
Personal lines loss and loss adjustment
expense ratio                                        74.6  %            68.6  %            73.8  %               6.0  %            (5.2) %
Combined Ratio
Automobile                                           93.2  %            83.9  %            95.9  %               9.3  %           (12.0) %
Homeowner                                           118.5  %           118.9  %           112.1  %              (0.4) %             6.8  %
Other Personal                                       84.5  %            94.4  %            99.1  %              (9.9) %            (4.7) %
Personal lines combined ratio                       101.0  %            95.7  %           100.8  %               5.3  %            (5.1) %

Comparison of the year ended December 31, 2021 to 2020

Automobile: Net premiums written decreased primarily due to fewer policies
in-force. Net premiums earned increased primarily due to a decrease in COVID-19
relief policy credits which were $1.9 million in 2021 compared to $16.8 million
in 2020. The loss and loss adjustment expense and combined ratios increased
primarily due to an increase in claim frequency compared to the prior year due
to the lessening impact of COVID-19.

Homeowners: Net premiums written and earned increased primarily due to rate
increases.

Other Personal: These products include coverages for personal property and
liability not covered within home and auto policies, such as watercraft,
personal umbrella, and rental owners. Net premiums written and earned increased
due to rate increases in the rental owners product. The loss and loss adjustment
expense and combined ratios improved due to fewer non-catastrophe losses.


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ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS - (Continued)

Commercial Products

Commercial Products results for the periods indicated were as follows (in
thousands, except percentages):

                                                              Years ended December 31,                         Change over prior year
                                                     2021               2020               2019                2021                2020
Net premiums written
Agricultural Business                            $ 180,575          $ 165,112          $ 154,408          $    15,463           $ 10,704
Automobile                                         140,058            128,701            122,938               11,357              5,763
Business Owner                                      87,209             80,383             72,008                6,826              8,375
Workers Compensation                                70,901             69,092             74,077                1,809             (4,985)
Other Commercial                                    36,541             33,205             36,454                3,336             (3,249)
Total net premiums written                       $ 515,284          $ 476,493          $ 459,885          $    38,791           $ 16,608
Net premiums earned
Agricultural Business                            $ 173,686          $ 161,450          $ 150,632          $    12,236           $ 10,818
Automobile                                         135,301            126,365            116,329                8,936             10,036
Business Owner                                      83,485             76,920             69,109                6,565              7,811
Workers Compensation                                70,783             70,179             75,648                  604             (5,469)
Other Commercial                                    35,980             32,919             35,603                3,061             (2,684)
Total net premiums earned                        $ 499,235          $ 467,833          $ 447,321          $    31,402           $ 20,512
Loss and loss adjustment expense ratio
Agricultural Business                                 55.1  %            56.4  %            63.4  %              (1.3)  %           (7.0) %
Automobile                                            65.5  %            76.6  %            84.5  %             (11.1)  %           (7.9) %
Business Owner                                        73.4  %            86.1  %            54.8  %             (12.7)  %           31.3  %
Workers Compensation                                  65.2  %            51.7  %            55.6  %              13.5   %           (3.9) %
Other Commercial                                      52.8  %            70.2  %            50.8  %             (17.4)  %           19.4  %
Commercial lines loss and loss adjustment
expense ratio                                         62.2  %            67.0  %            65.2  %              (4.8)  %            1.8  %
Combined ratio
Agricultural Business                                 91.1  %            93.9  %           101.2  %              (2.8)  %           (7.3) %
Automobile                                            88.0  %            99.0  %           109.3  %             (11.0)  %          (10.3) %
Business Owner                                       107.2  %           120.8  %            93.6  %             (13.6)  %           27.2  %
Workers Compensation                                  80.5  %            68.5  %            73.4  %              12.0   %           (4.9) %
Other Commercial                                      93.7  %           109.9  %            92.8  %             (16.2)  %           17.1  %
Commercial lines combined ratio                       91.7  %            97.0  %            96.8  %              (5.3)  %            0.2  %

Comparison of the year ended December 31, 2021 to 2020

Agricultural Business: Our agricultural business product allows policyholders to
customize and cover their agriculture exposure using a package policy, which
includes coverage for residences and household contents, farm and ranch
buildings and building contents, personal and commercial liability and personal
property. Net premiums written and earned increased primarily due to increases
in policies in-force and rate increases.

Commercial Automobile: Net premiums written and earned increased primarily due
to rate increases. The loss and loss adjustment expense and combined ratios
improved primarily due to favorable prior year claim development and rate
increases.

Business Owner: Our business owner product allows policyholders to customize and
cover their property and liability exposures using a package policy. Net
premiums written and earned increased primarily due to increases in policies
in-force and rate increases. The loss and loss adjustment expense and combined
ratios improved primarily due to more favorable claim development compared to
prior year.
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ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS - (Continued)

Workers Compensation: The loss and loss adjustment expense and combined ratios
increased primarily due to an increase in claim severity.

Other Commercial: Other commercial products primarily provide umbrella and other
liability coverages. Net premiums written and earned increased primarily due to
an increase in premium for umbrella products. The loss and loss adjustment
expense and combined ratios improved primarily due to favorable prior year claim
development.

Specialty Markets Products

Specialty markets products results for the periods indicated were as follows (in
thousands, except percentages):

                                                             Years ended December 31,                         Change over prior year
                                                    2021               2020               2019                2021                2020
Net premiums written                            $ 316,671          $ 234,752          $ 198,901          $    81,919           $ 35,851
Net premiums earned                               290,035            230,192            203,653               59,843             26,539
Loss and loss adjustment expense ratio               43.4  %            43.7  %            56.8  %              (0.3)  %          (13.1) %
Combined ratio                                       96.8  %            99.7  %           104.7  %              (2.9)  %           (5.0) %



Specialty markets products provide protection to borrowers and the creditors
that extend credit to them. Products offer coverage against unpaid indebtedness
as a result of death, disability, involuntary unemployment or untimely loss to
the collateral securing a personal or mortgage loan. Specialty markets products
also include renters, mortgage security, aviation, and private flood insurance.

Comparison of the year ended December 31, 2021 to 2020

Net written and earned premiums increased primarily due to higher production on
renters products and the addition of new accounts related to the investor
property protection products. The loss and loss adjustment expense and combined
ratios improved primarily due to lower losses for Credit GAP products, partially
offset by an increase in net catastrophe losses from $4.2 million in 2020 to
$12.3 million in 2021.

Reinsurance

We reinsure a portion of the risks that we underwrite to manage our loss
exposure. In return for ceded premiums, reinsurers assume a portion of the
claims incurred. In addition to our reinsurance coverage, we are partially
protected by the Terrorism Risk Insurance Program Reauthorization Act of 2015
and its predecessors. We participate in the National Flood Insurance Program
administered by the Federal Emergency Management Agency.

During 2021, we retained the first $2.0 million of loss per risk. Our
catastrophe reinsurance retention covering property and casualty companies in
total is $35.0 million.

The following table summarizes the Company's catastrophe reinsurance coverage
effective during 2021:

Layer of Loss                                           Catastrophe 

Reinsurance Coverage In-Force

                                              100% of loss retained except for certain losses covered by
Less than $35.0 million                       the Property Catastrophe Top 

and Drop and Aggregate Property

                                              Catastrophe Excess covers 

(coverage described below)

                                              95% of multiple peril losses covered by Corporate Program (1)
$35.0 million - $470.0 million                (all perils)

                                              100% of multiple peril losses covered by Corporate Program
$470.0 million - $500.0 million               (1) (all perils)


(1)The Corporate Program covers all non-credit property and casualty business,
subject to certain limits and is not specific to the Company or any of its
subsidiaries or any state or region. The program also covers the renters,
mortgage security, investor protection, and auto GAP business written by the
Specialty Markets Group.
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ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS - (Continued)

Each per-event coverage above includes one automatic reinstatement except for a
12.5% portion of the Corporate Program (12.5% of $35.0 million to $470.0
million). The automatic reinstatement requires us to pay additional reinsurance
premium for any losses into each reinsurance layer. The reinstatement premium is
prorated by the percentage of actual loss to the coverage, with the exception of
47.5% of losses from $35.0 million to $100.0 million, that reflects a 50%
reduction on the prorated amount. The 12.5% placement of non-reinstateable
coverage reduces the amount of reinstatement premium we are obligated to pay.

The Property Catastrophe Top and Drop cover consists of $30.0 million of annual
limit available either wholly or in part across two layers of coverage. The
first layer is 100% of $30.0 million excess of $470.0 million on an occurrence
basis. The second layer provides aggregate protection where subject loss is
$15.0 million excess of $20.0 million of each catastrophe, and recoveries follow
satisfaction of a $15.0 million annual aggregate deductible. The second layer
acts to reduce the retention on large second and third catastrophe events to
$20.0 million following a first large catastrophe. This cover was placed at 100%
for 2021 and does not include a reinstatement.

The Aggregate Property Catastrophe Excess cover provides for $30.0 million of
limit excess of $160.0 million of aggregated catastrophe losses. Qualifying
losses include amounts of retained losses net of other reinsurance below $35.0
million on Property Claims Services ("PCS") declared catastrophe events and
internally declared catastrophe events exceeding $5.0 million. This cover was
placed at 55% for 2021 and does not include a reinstatement.

We use multiple reinsurers with each reinsurer absorbing part of the overall
risk ceded. The primary reinsurers in the 2021 programs and the coverage each
provides are shown in the following table:

                                                                                                          Percent of Risk Covered
Reinsurer                                                    A.M. Best Rating (1)               Non-Catastrophe                 Catastrophe
Lloyd's Syndicates                                                     A                                     56.3  %                      37.8  %
Hannover Re                                                            A+                                    19.6                          2.2
Convex                                                                 A-                                     5.1                          4.6
Swiss Re                                                               A+                                     2.8                          6.5
Fidelis                                                                A                                        -                          9.0
Other Reinsurers with no single company with greater
than a 4.6% share                                                                                            16.2                         39.9
Total reinsurance coverage                                                                                  100.0  %                     100.0  %

(1)A.M. Best rating as of the most current information available February 9,
2022.

Reserve Development

While we believe that our claims reserves at December 31, 2021 are adequate, new
information, events or circumstances, unknown at the original valuation date,
may lead to future developments in ultimate losses in amounts significantly
greater or less than the reserves currently recorded. The actual final cost of
settling both claims outstanding at December 31, 2021 and claims expected to
arise from unexpired periods of risk is uncertain. There are many other possible
changes that would cause losses to increase or decrease, which include but are
not limited to claim severity; the expected level of reported claims; judicial
action changing the scope or liability of coverage; the regulatory, social and
economic environment; and unexpected changes in loss inflation. For additional
information regarding prior year development of our claims and CAE reserves,
refer to Part II, Item 8, Financial Statements and Supplementary Data - Note 12,
Liability for Unpaid Claims and Claim Adjustment Expenses, of the Notes to the
Consolidated Financial Statements.


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ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS - (Continued)

Corporate and Other

Corporate and Other segment financial results for the periods indicated were as
follows (in thousands):
                                                             Years ended December 31,                          Change over prior year
                                                    2021               2020               2019                2020                 2019
OTHER REVENUES
Net investment income                           $ 193,982          $  72,174          $ 179,494          $    121,808          $ (107,320)
Net realized investment gains                      64,628             35,660             30,751                28,968               4,909
(Increase) decrease in investment credit
loss*                                              28,778           (102,603)                 -               131,381            (102,603)
Net gains on equity securities                    420,283            356,281            422,535                64,002             (66,254)
Other income                                        3,279              3,379             14,048                  (100)            (10,669)
Total other revenues                              710,950            364,891            646,828               346,059            (281,937)
BENEFITS, LOSSES AND EXPENSES
Other expenses                                     67,593             42,891             41,222                24,702               1,669
Total benefits, losses and expenses                67,593             42,891             41,222                24,702               1,669
Income before federal income taxes and
other items                                     $ 643,357          $ 

322,000 $ 605,606 $ 321,357 $ (283,606)

*Effective January 1, 2020, the Company adopted ASU No. 2016-13. Adoption of
this guidance resulted in an allowance for credit losses primarily on our
commercial mortgage loans and related off-balance sheet unfunded loan
commitments, held-to-maturity bonds and reinsurance recoverables. The results
for 2019 have not been restated to conform to the current presentation.

Comparison of the year ended December 31, 2021 to 2020

Earnings for our Corporate and Other segment increased primarily due to the
following:

•A favorable change in investment credit loss due to improvement in our
commercial mortgage loans driven by improvement in cash flows and a positive
economic outlook from our properties, and improving conditions in travel and
leisure

•An increase in net investment income from investment funds and mortgage loan
profit participation and prepayment income

•An increase in net gains on equity securities due to more favorable market
conditions in 2021 compared to the negative impact from the pandemic in 2020 on
the fair value of our equity securities

The increase in earnings was partially offset primarily by the following:

• An increase in operating expenses primarily due to Merger-related expenses of
$21.5 million

Investments

We manage our investment portfolio to optimize the rate of return commensurate
with sound and prudent asset selection and to maintain a well-diversified
portfolio in support of our products and capital. Our investment operations are
regulated primarily by the state insurance departments where our insurance
companies are domiciled. Investment activities, including setting investment
policies and defining acceptable risk levels, are subject to oversight by our
Board of Directors, which is assisted by our Finance Committee, ALM Committee
and Enterprise Risk Management Committee.

Our insurance and annuity products are generally supported by investment-grade
bonds and commercial mortgage loans. We also invest in equity options as a hedge
for our indexed products. We purchase fixed maturity securities and designate
them as either held-to-maturity or available-for-sale considering our estimated
future cash flow needs. We also monitor the composition of our fixed maturity
securities classified as held-to-maturity and available-for-sale and adjust the
mix within the portfolio as investments mature or new investments are purchased.
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ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS - (Continued)

The following summarizes the carrying values of our invested assets by asset
class (in thousands, except percentages):

                                                                             December 31, 2021                             December 31, 2020

Fixed maturity, bonds held-to-maturity, at amortized cost $ 7,088,981

               28.3  %       $       7,354,970               29.2  %
Fixed maturity, bonds available-for-sale, at fair value                   8,380,248               33.5                  7,597,180               30.1
Equity securities, at fair value                                            135,433                0.5                  2,070,766                8.2
Mortgage loans on real estate, net of allowance                           5,199,334               20.8                  5,242,531               20.8
Policy loans                                                                365,208                1.5                    373,014                1.5
Real estate and real estate partnerships, net of
accumulated depreciation (1)                                                928,412                3.7                    960,572                3.8
Investment funds (1)                                                        961,763                3.8                    477,135                1.9
Short-term investments                                                    1,840,732                7.4                  1,028,379                4.1
Other invested assets                                                       125,795                0.5                     94,415                0.4
Total investments                                                 $      25,025,906              100.0  %       $      25,198,962              100.0  %


(1)Refer to Part II, Item 8, Financial Statements and Supplementary Data - Note
2, Summary of Significant Accounting Policies and Practices, of the Notes to the
Consolidated Financial Statements for explanation of prior year retrospective
adjustment

The decrease in our total investments at December 31, 2021 compared to
December 31, 2020 was a result of a decrease in held-to-maturity bonds and the
sale of equity securities which caused a temporary increase in cash which we
intend to reinvest.

Bonds-We allocate most of our fixed maturity securities to support our insurance
business. At December 31, 2021, our fixed maturity securities had an estimated
fair value of $15.8 billion, which was $0.6 billion, or 4.2%, above amortized
cost. At December 31, 2020, our fixed maturity securities had an estimated fair
value of $15.6 billion, which was $1.2 billion, or 8.0%, above amortized cost.
Unrealized gains decreased on our fixed maturity due to an increase in benchmark
ten-year interest rates. For additional information regarding unrealized gains
and losses, refer to Part II, Item 7, Investments, Net Unrealized Gains and
Losses table. The estimated fair value for securities due in one year or less
was $1.4 billion as of December 31, 2021 and $1.1 billion as of December 31,
2020. For additional information regarding total bonds by credit quality rating,
refer to Part II, Item 8, Financial Statements and Supplementary Data - Note 4,
Investments in Securities, of the Notes to the Consolidated Financial
Statements.

Equity Securities-We have invested in the equity securities of companies traded
on national U.S. stock exchanges. See Part II, Item 8, Financial Statements and
Supplementary Data - Note 4, Investments in Securities, of the Notes to the
Consolidated Financial Statements for the unrealized and realized gains and
losses of equity securities. The Company sold the majority of its equity
securities portfolio in the fourth quarter of 2021. For additional information
regarding the Sale of Equity Securities Portfolio, see General Trends above.

Mortgage Loans-We invest in commercial mortgage loans that are diversified by
property-type and geography. Generally, mortgage loans are secured by first
liens on income-producing real estate with a loan-to-value ratio of up to 75%.
Mortgage loans are generally carried at outstanding principal balances, adjusted
for any unamortized premium or discount, deferred fees or expenses, and net of
allowances. The weighted average coupon yield on the principal funded for
mortgage loans was 4.6% and 4.8% at December 31, 2021 and 2020, respectively.
For additional information regarding mortgage loans refer to Part II, Item 8,
Financial Statements and Supplementary Data - Note 5, Mortgage Loans, of the
Notes to the Consolidated Financial Statements.

Policy Loans-For certain life insurance products, policyholders may borrow funds
using the policy's cash value as collateral. The maximum amount of the policy
loan depends upon the policy's surrender value. As of December 31, 2021, we had
$365.2 million in policy loans with a loan to surrender value of approximately
54%, and at December 31, 2020, we had $373.0 million in policy loans with a loan
to surrender value of approximately 56%. Interest rates on policy loans
primarily range from 3.0% to 12.0% per annum. Policy loans may be repaid at any
time by the policyholder and have priority to any claims on the policy. If the
policyholder fails to repay the policy loan, funds are withdrawn from the
policy's benefits.

Real Estate and Real Estate Partnerships-We invest in commercial real estate
where positive cash flows and/or appreciation in value is expected. Real estate
may be owned directly by our insurance companies or non-insurance affiliates or
indirectly in joint ventures with real estate developers or investors we
determine share our perspective regarding risk and return relationships. The
carrying value of real estate is stated at cost, less accumulated depreciation
and impairments, if any. Depreciation is provided over the estimated useful
lives of the properties. The carrying value of our real estate partnerships is
determined by using the equity method of accounting.
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ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS - (Continued)

Investment Funds-Our investment funds are primarily comprised of senior secured
and second lien private loans that are secured by assets, revenues and
credit/balance sheet lending. We recognize our share of fund earnings in net
investment income on a one-quarter lag under the equity method of accounting.
Cash distributions are received from fund earnings and from liquidation of
underlying investments.

Short-Term Investments-Short-term investments are primarily commercial paper
rated A2 or P2 or better by Standard & Poor's and Moody's, respectively. The
amount fluctuates depending on our view of the desirability of investing in the
available long-term investment opportunities and our liquidity needs, including
mortgage investment-funding commitments.

Other Invested Assets-Other invested assets are comprised primarily of pooled
loans to mid-sized businesses which are initiated and administered by
third-party managers and are carried at fair value. Other invested assets also
include equity-indexed options, carried at fair value, net of collateral
provided by counterparties; such collateral is restricted to the Company's use.
Additionally, other invested assets include FHLB capital stock, mineral rights,
mezzanine loans and lease financing arrangements, all of which are carried at
cost.

Net Investment Income and Net Realized Gains (Losses)

Net investment income increased $195.5 million during 2021 compared to 2020
primarily due to higher gains on options, an increase in investment income from
investment funds and mortgage loan prepayment and profit participation income.

Interest income on mortgage loans is accrued on the principal amount of the loan
at the contractual interest rate. Accretion of discounts is recorded using the
effective yield method. Interest income, accretion of discounts and prepayment
fees are reported in net investment income. Interest is not accrued on loans
generally more than 90 days past due or when the collection of interest is not
considered probable. Loans in foreclosure are placed on non-accrual status.
Interest received on non-accrual status mortgage loans is included in net
investment income in the period received.

Net realized investment gains increased $29.0 million during 2021 compared to
2020 primarily attributable to realized gains from bonds. Net realized
investment gains (losses) are shown below (in thousands):

                                        December 31,
                              2021          2020          2019
Bonds                      $ 54,941      $ 23,318      $ 16,361
Mortgage loans                 (768)            -        (2,412)
Real estate                  10,240        12,401        25,555
Other invested assets           215           (59)       (1,785)
Total                      $ 64,628      $ 35,660      $ 37,719

Net Unrealized Gains and Losses

The unrealized gains and losses of our fixed maturity securities investment
portfolio are shown below (in thousands):

                                December 31,
                           2021            2020          Change over prior year
Held-to-maturity
Gains                   $ 394,900      $   639,648      $              (244,748)
Losses                    (25,092)         (11,437)                     (13,655)
Net gains                 369,808          628,211                     (258,403)
Available-for-sale
Gains                     321,861          548,996                     (227,135)
Losses                    (39,097)         (17,476)                     (21,621)
Net gains                 282,764          531,520                     (248,756)

Total                   $ 652,572      $ 1,159,731      $              (507,159)

The net change in the unrealized gains on fixed maturity securities between
December 31, 2021 and December 31, 2020 is primarily attributable to the
increase in benchmark ten-year interest rates which were 1.5% and 0.9%,
respectively. The Company does not currently intend to sell nor does it expect
to be required to sell any of the securities in an unrealized loss position.

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ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS - (Continued)

Liquidity

ANAT's source of liquidity is solely derived from dividends received from its
wholly owned subsidiary, ANICO.

The primary use of cash has been and is expected to continue to be payment of
policyholder benefits and claims incurred. Current and expected patterns of
claim frequency and severity may change from period to period but continue to be
within historical norms. Management considers our current liquidity position to
be sufficient to meet anticipated demands over the next twelve months.

Our contractual obligations are not expected to have a significant negative
impact to cash flows from operations. American National has agreed to pay our
financial advisor in connection with the Merger, Citigroup Global Markets Inc.
("Citi"), for its Merger-related services an aggregate fee of $40.0 million, of
which $3.0 million was paid upon delivery of Citi's fairness opinion related to
the Merger entered into on August 6, 2021 and the remaining $37.0 million is
payable contingent upon consummation of the Merger, which has not been reflected
in the consolidated statement of operations. In addition, the Company agreed to
reimburse Citi for expenses, including fees and expenses of counsel, and to
indemnify Citi and related parties against certain liabilities, including
liabilities under federal securities laws, arising from Citi's engagement.

In April 2020, the Company borrowed $500 million from the Federal Home Loan Bank
of Dallas' COVID-19 Relief Advance Program. As of December 31, 2021, there are
no advances outstanding; the final advance was repaid on its maturity date of
April 28, 2021. The available liquidity at February 9, 2022 was approximately
$879.3 million.

As a result of the impacts of COVID-19, state insurance departments across the
country issued regulations that required us not to cancel policies for
non-payment for varying amounts of time but generally for at least 90-day
periods which began in March and April of 2020. The cancellation and grace
periods have been lifted in most states.

Our defined benefit plans are frozen and currently adequately funded; however,
low interest rates, increased longevity of participants, and rising Pension
Benefit Guaranty Corporation ("PBGC") premiums may cause us to increase our
funding of the plans.

We are currently evaluating the renovation and modernization of our home office
facilities. This could result in capital expenditures that could aggregate to
approximately $100.0 million over a three-year period; however, current
uncertainties relating to the COVID-19 pandemic have caused us to delay this
project at this time. There are no other unusually large capital expenditures
expected in the next 12-24 months.

We have consistently paid dividends to our stockholders and expect to continue
this tradition in the foreseeable future. There are no other known trends or
uncertainties regarding product pricing, changes in product lines or rising
costs that are expected to have a significant impact to cash flows from
operations, although uncertainties relating to the COVID-19 pandemic could still
significantly impact one or more of these items.

Funds received as premium payments and deposits that are not used for liquidity
requirements are generally invested in bonds and commercial mortgages. Funds are
invested with the intent that income from the investments and proceeds from the
maturities will meet our ongoing cash flow needs. We historically have not had
to liquidate invested assets in order to cover cash flow needs. We believe our
portfolio of highly liquid bonds and available-for-sale investment securities
coupled with our ability to borrow funds through the FHLB, are sufficient to
meet future liquidity needs as necessary.
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ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS - (Continued)

As a result of the economic impact associated with COVID-19, American National
modified 93 mortgage loans with a total balance of $1.6 billion during 2020.
These modifications were in the form of forbearance of principal and interest
payments for up to six months, extensions of maturity dates, and/or provisions
for interest only payments. The modifications were primarily related to our
loans to hotels, retail and parking operations. Due to the ongoing economic
stress brought on by the pandemic, additional modifications for 33 of these
loans with a total balance of $725.7 million were made during 2021. These
additional modifications extended the forbearance of principal and interest
payments and interest only provisions with a requirement for the payment of at
least 20% of the total interest due during the extended modification period. The
modified loans had an aggregate deferred interest of $5.6 million as of
December 31, 2021. There are no commitments to lend additional funds to debtors
whose loans have been modified in a troubled debt restructuring during the
periods presented. The decrease in loans determined to be a troubled debt
restructuring during 2021 is primarily attributable to improved economic
conditions after lifting of COVID-19 related restrictions.

The Company holds collateral of $264.2 million at December 31, 2021 to offset
exposure from its derivative counterparties. Cash flows associated with
collateral received from counterparties change as the market value of the
underlying derivative contract changes.

Our cash and cash equivalents and short-term investment position increased from
$1.4 billion at December 31, 2020 to $3.8 billion at December 31, 2021. The
increase primarily relates to the fourth quarter 2021 sale of a majority of the
Company's equity securities portfolio which resulted in an excess cash position.
We intend to reinvest the cash proceeds consistent with our investment
guidelines during 2022.

A downgrade or a potential downgrade in our financial strength ratings could
result in a loss of business and could adversely affect our cash flows from
operations. A.M. Best has placed American National's issuer credit and financial
strength ratings under review with developing implications and S&P Global
Ratings has placed the ratings on CreditWatch with negative implications of
which are due to the pending Merger with Brookfield Reinsurance.

Further information regarding additional sources or uses of cash is described in
Note 19, Commitments and Contingencies, of the Notes to the Consolidated
Financial Statements.

Capital Resources

Our capital resources are summarized below (in thousands):

December 31,

                                                                     2021                 2020                 2019

American National stockholders' equity, excluding
accumulated other comprehensive income ("AOCI"), net of
tax

                                                             $ 6,847,314          $ 6,236,100          $ 5,890,231
Accumulated other comprehensive income                              147,054              222,170               99,518
Total American National stockholders' equity                    $ 6,994,368 

$ 6,458,270 $ 5,989,749

We have notes payable relating to borrowings by real estate joint ventures that
we consolidate into our financial statements that are not part of our capital
resources. The lenders for the notes payable generally have no recourse against
us in the event of default by the joint ventures. Therefore, the liability of
American National relating to notes payable of the consolidated VIEs is limited
to the amount of its direct or indirect investment in the respective ventures,
which totaled $3.0 million at December 31, 2021 and 2020.
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ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS - (Continued)

The changes in our capital resources are summarized below (in thousands):

                                                                                                      Years ended
                                                                      2021                                                                  2020
                                                                  Accumulated Other                                                     Accumulated Other
                                            Capital and          Comprehensive Income                             Capital and          Comprehensive Income
                                         Retained Earnings              (Loss)                 Total           Retained Earnings              (Loss)                 Total
Net income attributable to
American National                        $      699,325          $               -          $ 699,325          $      467,505          $               -          $ 467,505
Dividends to shareholders                       (88,190)                         -            (88,190)                (88,190)                         -            (88,190)
Change in net unrealized gains on
debt securities                                       -                   (142,854)          (142,854)                      -                    134,315            134,315
Foreign currency transaction and
translation adjustment                                -                         62                 62                       -                        235                235
Defined benefit pension plan
adjustment                                            -                     67,676             67,676                       -                    (11,898)           (11,898)
Cumulative effect of accounting
changes (1)                                           -                          -                  -                 (33,500)                         -            (33,500)
Other                                                79                          -                 79                      54                          -                 54
Total                                    $      611,214          $         (75,116)         $ 536,098          $      345,869          $         122,652          $ 468,521

(1)Result of adoption of ASU 2016-13, Financial Instruments-Credit Losses (Topic
326): Measurement of Credit Losses on Financial Instruments.

Statutory Capital and Surplus and Risk-based Capital

Statutory capital and surplus is the capital of our insurance companies reported
in accordance with accounting practices prescribed or permitted by the
applicable state insurance departments. RBC is calculated using formulas applied
to certain financial balances and activities that consider, among other things,
investment risks related to the type and quality of investments, insurance risks
associated with products and liabilities, interest rate risks and general
business risks. Insurance companies that do not maintain capital and surplus at
a level of at least 100% of the company action level RBC are required to take
certain actions. At December 31, 2021 and December 31, 2020, ANICO's statutory
capital and surplus was $4.0 billion and $3.6 billion, respectively. ANICO and
each of our insurance subsidiaries had statutory capital and surplus at
December 31, 2021 and 2020 above 200% of the company action level except ANPAC
Louisiana Insurance Company ("ANPLA"), which had an RBC level of 194% at
December 31, 2020, which increased to 242% at December 31, 2021.

The achievement of long-term growth will require growth in our insurance
subsidiaries' statutory capital and surplus. Our subsidiaries may obtain
additional statutory capital through various sources, such as retained statutory
earnings or equity contributions from us.

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ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS - (Continued)

Contractual Obligations

The following summarizes our contractual obligations as of December 31, 2021 (in
thousands):

                                                                                    Payments Due by Period
                                                                     Less than                                                       More than
                                                  Total                1 year             1-3 years            3-5 years              5 years
Life insurance obligations (1)               $  4,504,925          $   

(58,739) $ (116,014) $ (36,030) $ 4,715,708
Annuity obligations (1)

                        15,483,714            1,373,520            3,496,133            2,434,695             8,179,366
Property and casualty insurance
obligations (2)                                 1,098,017              487,133              371,074              138,250               101,560
Health insurance obligations (3)                  263,837              183,260               29,599                9,428                41,550
Purchase obligations
Commitments to purchase and fund
investments                                       899,017              361,222              321,503               95,230               121,062
Mortgage loan commitments                         647,841              424,971              222,870                    -                     -
Lease obligations                                  12,680                4,300                6,612                1,685                    83
Defined benefit pension plans (4)                  60,145               17,638               14,362               10,834                17,311
Notes payable (5)                                 149,248               75,293               73,955                    -                     -
Total                                        $ 23,119,424          $ 2,868,598          $ 4,420,094          $ 2,654,092          $ 13,176,640


(1)Life and annuity obligations include undiscounted estimated claim, benefit,
surrender and commission obligations offset by expected future premiums and
deposits on in-force insurance policies and annuity contracts. All amounts are
gross of any reinsurance recoverable. Estimated claim, benefit and surrender
obligations are based on mortality and lapse assumptions comparable with
historical experience. Estimated payments on interest-sensitive life and annuity
obligations include interest credited to those products. The interest crediting
rates are derived by deducting current product spreads from a constant
investment yield. As a result, the estimated obligations for insurance
liabilities included in the table exceed the liabilities recorded in the
liability for future policy benefits and policy and contract claims. Due to the
significance of the assumptions used, the amounts presented could materially
differ from actual payments. Separate account obligations have not been included
in the table since those obligations are not part of the general account
obligations and will be funded by cash flows from separate account assets. The
general account obligations for insurance liabilities will be funded by cash
flows from general account assets and future premiums and deposits.
Participating policyholder dividends payable consists of liabilities related to
dividends payable in the following calendar year and are presented in the less
than one-year category. All estimated cash payments are net of estimated future
premiums on policies currently in-force net of future policyholder dividends
payable. The participating policyholders' share obligation included in other
policyholder funds and the timing and amount of the ultimate participating
policyholder obligation is subject to significant uncertainty and the amount of
the participating policyholder obligation is based upon a long-term projection
of the performance of the participating policy block.

(2)Includes undiscounted case reserves for reported claims and reserves for IBNR
with the timing of future payments based on our historical payment patterns. The
timing of these payments may vary significantly from the pattern shown in the
preceding table. The ultimate losses may vary materially from the recorded
amounts, which are our best estimates.

(3)Reflects estimated future claim payments for claims incurred based on
mortality and morbidity assumptions that are consistent with historical claims
experience. These are not discounted with interest and will exceed the
liabilities recorded in reserves for future claim payment, which are discounted
with interest. Due to the significance of the assumptions used, the amounts
presented could materially differ from actual payments.

(4)Estimated payments through continuing operations for benefit obligations of
the non-qualified defined benefit pension plan. A liability has been established
for the full amount of benefits accrued.

(5)The estimated payments due by period for notes payable reflect the
contractual maturities of principal for amounts borrowed by real estate joint
ventures and collateralized by real-estate owned by the respective entity. The
entity's liability is limited to its investment in the respective joint venture.
See Part II, Item 8, Financial Statements and Supplementary Data - Note 6, Real
Estate and Other Investments, of the Notes to the Consolidated Financial
Statements for additional details.
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ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS - (Continued)

Off-Balance Sheet Arrangements

We have off-balance sheet arrangements relating to third-party marketing
operation bank loans as discussed in Part II, Item 8, Financial Statements and
Supplementary Data - Note 19, Commitments and Contingencies, of the Notes to the
Consolidated Financial Statements. We could be exposed to a liability for these
loans, which are supported by the cash value of the underlying insurance
contracts. The cash value of the life insurance policies is designed to always
equal or exceed the balance of the loans. Accordingly, management does not
foresee any material loss related to these arrangements.

Related-Party Transactions

We have various agency, consulting and service arrangements with individuals and
entities considered to be related parties. Each of these arrangements has been
reviewed and approved by our Audit Committee, which retains final
decision-making authority for these transactions. The amounts involved, both
individually and in the aggregate, with these arrangements are not material to
any segment or to our overall operations. For additional details see Part II,
Item 8, Financial Statements and Supplementary Data - Note 20, Related Party
Transactions, of the Notes to the Consolidated Financial Statements.

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Our investments and some of our products are subject to various market risks
associated with changes in interest rates, credit spreads, issuer defaults,
equity prices and market indices. Adverse changes due to these market risks may
occur as a result of various factors, including changes in market liquidity,
risk tolerances and market perceptions of creditworthiness.

We emphasize prudent risk management throughout all our operations. Our
enterprise risk management procedures help us to identify, prioritize and manage
various risks including market risk. Under the leadership of our Board of
Directors and Corporate Risk Officer, we have instituted a framework based on
the principles of enterprise risk management designed to provide reasonable
assurance regarding the achievement of our strategic objectives. Related
activities include:

•identifying evolving and potential risks and events that may affect us;

•managing risks within our risk profile;

•appropriate escalation of risks and disclosure of any risk limit breaches
within the enterprise, along with the correction method if appropriate;

•tracking actual risk levels against predetermined thresholds; and

•monitoring our capital adequacy.

We expect ongoing enterprise risk management efforts will expand the management
tools used to support an efficient allocation of capital and enhance the
measurement of possible diversification benefits across business segments and
risk classes.

A key component of our risk management program is our ALM Committee. The ALM
Committee monitors the level of our risk exposure in managing our assets and
liabilities to attain the desired risk-return profile for our diverse mix of
assets and liabilities and their resultant cash flows. This process includes
maintaining adequate reserves, monitoring claims and surrender experience,
managing interest rate spreads, evaluating alternate investment strategies and
protecting against disintermediation risk for life insurance and annuity
products.

As a part of the ALM process, we have asset portfolios for each major line of
business, which represent the investment strategies used to fund liabilities
within acceptable levels of risk. We monitor these strategies through regular
review of portfolio metrics, such as effective duration, yield curve sensitivity
and liquidity. In executing these ALM strategies, we regularly reevaluate the
estimates used in determining the approximate amounts and timing of payments to
or on behalf of policyholders for insurance liabilities. Many of these estimates
are inherently subjective and could impact our ability to achieve our ALM goals
and objectives. Our Finance Committee and ALM Committee also review the risks
associated with evaluation of alternate investment strategies and the specific
investments made to support our business and the consistency of such strategies
and investments with our overall investment strategy.


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ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK -
(Continued)
Interest Rate Risk

Interest rate risk is the risk that the value of our interest sensitive assets
or liabilities will change with changes in market interest rates. The fair
market value of fixed maturity securities is inversely related to changes in
market interest rates. As interest rates fall, the cash flow from the interest
coupon and dividend streams of existing fixed rate investments becomes more
valuable and the market values of fixed maturity securities rise. As interest
rates rise, the reverse occurs and the market value of fixed maturity securities
falls. These general assumptions hold all other variables influencing the values
of fixed maturity securities constant and would not fully reflect any prepayment
to the portfolio, changes in corporate spreads or non-parallel changes in
interest rates for different maturities, or changes in credit quality, any of
which could cause changes in the values of fixed maturity securities that differ
materially from our assumptions and estimates.

The carrying values of our investment in fixed maturity securities, which
comprise 61.8% of our portfolio, are summarized below (in thousands, except
percentages):
                                                                                                December 31,
                                                                              2021                                        2020
                                                                  Amount               Percent                Amount               Percent
Fixed maturity, bonds held-to-maturity                        $ 7,088,981                   45.8  %       $ 7,354,970                   49.2  %
Fixed maturity, bonds available-for-sale                        8,380,248                   54.2            7,597,180                   50.8
Net unrealized gains on available-for-sale bonds                  282,764                    3.4              531,520                    7.0



The unrealized gain on available-for-sale bonds was primarily the result of an
increase in unrealized gains on corporate debt securities. Information regarding
our unrealized gains or losses is disclosed in Note 4, Investments in
Securities, of the Notes to the Consolidated Financial Statements. Our exposure
to cash flow changes is discussed further in the Liquidity and Capital Resources
section of the MD&A.

Our mortgage loans also have interest rate risk. As of December 31, 2021, these
mortgage loans have fixed rates ranging from 3.25% to 10.0%. Most of the
mortgage loan contracts require periodic payments of both principal and
interest, and have amortization periods of three to 30 years. Many of our
mortgage loans contain prepayment restrictions or fees or both that reduce the
risk of payment before maturity or compensate us for all or a portion of the
investment income lost through early payment of the loan principal.

Rising interest rates can cause increases in policy loans associated with life
insurance policies and surrenders relating to life insurance or annuities.
Policyholders may move their assets into new products offering higher rates if
there were sudden or significant changes in interest rates. We may have to sell
assets earlier than anticipated to pay for these withdrawals. Our life insurance
and annuity product designs reduce the financial impact of early surrenders
through the use of restrictions on withdrawal, surrender charges and market
value adjustment features. ALM guidelines, including duration targets and asset
allocation tolerances, help ensure this risk is managed within the constraints
of established criteria. Consistent monitoring of and periodic changes to our
product pricing help us to better match the duration of assets and liabilities.

Falling interest rates can have an adverse impact on our general account
annuities. We aim to manage interest margin, which is the difference between
yields on investments supporting our liabilities and amounts credited to
policyholder account balances and reserves. As portfolio yields decline, we can
reduce crediting rates on some deferred annuities, to a limit defined by
contractual minimum guarantees, but we cannot adjust immediate annuity benefits
and reserves. Assuming a 10 basis point decline in current portfolio yield, our
annual interest margin would decline $7.1 million.

Interest Rate sensitivity analysis: The table below shows the estimated change
in pre-tax market values of our investments in fixed maturity securities caused
by instantaneous, one time parallel shifts in the corresponding year-end U.S.
Treasury yield curves of +/- 100bps and +/- 50bps (in thousands):

                                                                       

Increase (Decrease) in Market Value Given an Interest Rate

Increase (Decrease) of Basis Points

                                                                    (100)                           (50)                50                  100
December 31, 2021                                   $       824,630                             $ 402,145          $ (384,130)         $ (753,265)
December 31, 2020                                           703,957                               345,427            (333,613)           (658,118)



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ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK -
(Continued)
Credit Risk

We are exposed to credit risk, which is the uncertainty of whether a
counterparty will honor its obligation under the terms of a security, loan or
contract. To help manage credit risk, we have an Investment Plan approved by our
Board of Directors. This plan provides issuer and geographic concentration
limits, investment size limits, mortgage loan-to-value guidelines and other
applicable investment parameters. Investment activity, including the setting of
investment policies and defining acceptable risk levels, is subject to review by
our Board of Directors, Finance Committee and, to a certain extent, by the
Enterprise Risk Management Committee.

We are also exposed to risks created by changes in market prices and cash flows
associated with fluctuations in the credit spread or the market's perception of
the relative risk and reward to hold fixed maturity securities of borrowers with
different credit characteristics or credit ratings. Credit spread widening will
reduce the fair value of our existing investment portfolio and will increase
investment income on new purchases. Credit spread tightening would have the
opposite effect. Information regarding the credit quality of our fixed maturity
securities can be found in Part II, Item 7, Management's Discussion and Analysis
of Financial Condition and Results of Operations, Investments section of the
MD&A.

We are subject to credit risk associated with our reinsurance agreements. While
we believe our reinsurers are reputable and have the financial strength to meet
their obligations to us, reinsurance does not eliminate our liability to pay our
policyholders, and we remain primarily liable to our policyholders for the risks
we insure. We regularly monitor the financial strength of our reinsurers and the
levels of concentration to individual reinsurers to verify they meet established
thresholds.

The Company's use of derivative instruments exposes it to credit risk in the
event of non-performance by the counterparties. The Company has a policy of only
dealing with counterparties it believes are creditworthy and obtaining
sufficient collateral where appropriate, as a means of mitigating the financial
loss from defaults. The Company holds collateral in cash and notes secured by
U.S. government backed assets. The non-performance risk is the net counterparty
exposure based on the fair value of the open contracts, less the fair value of
collateral held. For additional information regarding counterparties used and
collateral received, see Part II, Item 8, Financial Statements and Supplementary
Data - Note 7, Derivative Instruments, of the Notes to the Consolidated
Financial Statements.

We are exposed to risks on our mortgage loans when there are economic
disruptions, such as the COVID-19 pandemic. The challenging economic conditions
impair borrowers' ability to meet loan terms. The Company granted concessions to
certain mortgage loan borrowers during 2021 and 2020. For additional information
regarding the impact of COVID-19 to mortgage loans, see Part II, Item 8,
Financial Statements and Supplementary Data - Note 5, Mortgage Loans, of the
Notes to the Consolidated Financial Statements.

Equity Risk

Equity risk is the risk that we will incur realized or unrealized losses due to
changes in the overall equity investment markets or specific investments within
our portfolio. As a result of FASB issued guidance, the change in fair value of
equity securities is recognized in earnings, which could increase the level of
volatility in our consolidated statements of operations. At December 31, 2021,
we held approximately $135.4 million of equity investments, approximately 0.5%
of total investment assets, which are subject to equity risk. Our exposure to
the equity markets is managed by sector and individual security and is intended
to track the S&P 500 with minor variations. We mitigate our equity risk by
diversification of the investment portfolio.

We also have equity risk associated with the equity-indexed life and annuity
products we issue. We have entered into derivative transactions, primarily
over-the-counter equity call options, to hedge our exposure to equity-index
changes.

Recent Accounting Pronouncements

Refer to Part II, Item 8, Financial Statements and Supplementary Data - Note 3,
Recently Issued Accounting Pronouncements, of the Notes to the Consolidated
Financial Statements for a discussion of recently issued accounting
pronouncements not yet adopted.

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