Pacific Mutual Reports Second-Highest Profit

Despite an increasingly competitive marketplace for insurance products, Pacific Mutual Life Insurance Co. said Wednesday that 1984 was the second most profitable of its 117 years in business.

The Newport Beach company’s $3.7 billion in assets, up $400 million or 12.1% from the $3.3 billion in assets reported for 1983, make Pacific Mutual the largest mutual life insurance firm in the state and rank it 28th among the 2,048 life insurance companies in the nation.

And although 1984 profits of $25.3 million were down 17.8% from 1983’s record earnings of $30.8 million, they far exceed the meager $8.4 million in earnings reported in 1982.

Walter Gerken, Pacific Mutual’s chairman, said in a prepared statement that the keys to the company’s strong showing were its concentration during 1984 on development of competitively priced individual insurance policies and low-priced group health care packages for small employers.

A significant part of the company’s revenues came from profits and fees from the $12.2-billion investment portfolio Pacific Mutual manages for itself and a large number of major corporate and institutional clients--an increase of 34% increase from the $9.1 billion in investments handled in 1983.

Of the $12.2 billion invested by Pacific Mutual and its Pacific Investment Management Co. subsidiary, $8.5 billion is managed under contract from outside clients while $3.7 billion represents Pacific Mutual’s own assets. The PIMCO subsidiary handles $8 billion of the outside client portfolio.

Harold Joanning, Pacific Mutual’s chief financial officer, said the company placed $24.6 million of its earnings into its surplus account--an insurance firm’s reserve against contingencies. The cumulative surplus totaled a record $218.9 million on Dec. 31, he said.

Total life insurance in force at the end of the year was $23 billion, up $2.4 billion or 11.6% from the $20.6 billion worth of policies in force on Dec. 31, 1983.