FORWARD MOTION

Modern Woodmen of America

BOARD OF DIRECTORS

Adjust your seat, buckle your seat belt, and check the rearview mirror. You take these actions nearly every time you set out on a journey by car. Modern Woodmen of America’s 2019 annual report to members does much the same.

The rearview shows where we’ve been, and that big, clear windshield up front helps us see the bigger picture – a view of forward motion. The next few pages share a look back at the fraternal actions and financial results that moved the

2019 Annual Report to Membersorganization forward last year and will continue our forward momentum in 2020 and beyond.

Modern Woodmen’s journey is possible thanks to members, field representatives and home office staff members who embrace a culture of caring, shared values and positive momentum.

I’m honored to share this report with you.

From left:Director Lester L. Bohnert East Moline, Illinois

Director Sam H. Kupresin Bettendorf, Iowa

National Secretary Jerald J. Lyphout East Moline, Illinois

Director David B. Emrick Davenport, Iowa

President and CEO W. Kenny Massey LeClaire, Iowa

Director James E. Temperley Bonita Springs, Florida

Director Brett M. Van Coal Valley, Illinois

Director Lori A. Newberg Lenexa, Kansas

Director Joseph A. Sztapka Sioux Falls, South Dakota

W. Kenny Massey / President and CEO

OUR MISSION To improve the quality of life for our members.

OUR VISION Modern Woodmen of America will grow nationwide through members helping members create a better tomorrow for themselves, their families and others.

OUR CREED There is a destiny that makes us brothers; None goes his way alone; All that we send into the lives of others comes back into our own. - Edwin Markham circa 1939

$1.12 billionpaid to members (includes death

benefits, annuity payments and surrender benefits)

$20.4 milliontotal fraternal expenditures supporting family-oriented

member benefits and programs

SNAPSHOT 2019

744,169members

$41.3 billionof life insurance coverage in force

for members

252019 ANNUAL REPORT24 Forward motion / Modern Woodmen of America

2019 ANNUAL REPORT // President’s Message Board of Directors // 2019 ANNUAL REPORT

2,529 active

chapters

576,310 attendees

at social, educational & volunteer events in their communities

290 active Summit

chapters44,668 event participants

Make an impactVolunteer, socialize and learn!

Learn, socialize and volunteer. Modern Woodmen chapters, Summit chapters and youth service clubs make it easy – and fun! Activities provide a wide variety of meaningful and memorable hands-on experiences throughout the year. Get involved to make an impact in your own life and in your com-munity. Ask your Modern Woodmen representative how you can get involved as a leader, serve on your local chapter board, or simply volunteer for an upcoming service project.

ACTIVITIESMember Member

BENEFITS

MATCHING FUND PROGRAM

*Includes total dollars raised by member chapters and youth clubs partnering with community groups.

to community projects and individuals in need

3,976 fundraising events

$45.3 million* contributed

YOUTH SERVICE CLUBS805

active clubs nationwide

56,330 participants

CHAPTERS

SERVICE PROJECTS/VOLUNTEER ACTIVITIES

9,835 hands-on events

463,939 volunteer hours

$2.3 million reimbursed for projects in members’ communities

An interactive resource that can provide peace of mind, this member benefit walks you through important planning steps.

Modern Woodmen’s Final Wishes website asks the questions your loved ones may have after you pass away – from where your important documents can be found to your funeral preferences. You can then save your responses in your browser or print them out and share with your family.

Find Final Wishes at member.modernwoodmen.org under Benefits.

Up to 500 Do-Good Grants are awarded each year to help members like you support causes they care about. This member benefit provides $100 (and other resources) to help you plan a volunteer project in your community.

Learn more and apply today at member.modernwoodmen.org > Do-Good Grant.

Final Wishes Free tool helps you document them

Do-Good Grant® How can you make an impact with $100?

NEWBORN BENEFIT$10,000 of life insurance

issued for infants in poor health

ORPHAN BENEFIT$68,590 in financial support

for 22 orphans

DO-GOOD GRANT®58 members received$100 and planning materials for a

community project

TERMINAL ILLNESS INTEREST RELIEF

$51,803 in interestwaived for those with terminal illness

BIRTHDAY BOOK CLUB

16,445 childrenreceived a free book

MAKE AN IMPACT SM SCHOLARSHIPS

$447,751 awardedto 237 members

FINAL WISHES1,634 membersaccessed planning website

(see article to the right)

MEMBER DISCOUNTSExclusive savingson health screenings, gym memberships, park passes, event tickets and more

FRATERNAL AID FUND$110,428 total in premiums paid

for members experiencing medical or natural disasters

YOUTH EDUCATIONAL PROGRAMS475,495 children

served by free courses on financial literacy, exercise & nutrition, & more

Members from Minnesota used a Modern Woodmen Do-Good Grant® to purchase materials to make fleece hats for students in need.

Member Sue Young, Rock Island, Illinois, used the Final Wishes tool to document plans for her family

(for members age 55+)

272019 ANNUAL REPORTForward motion / Modern Woodmen of America26

2019 ANNUAL REPORT // Member activities and benefits

Life insurance products • Whole life insurance • Universal life insurance • Term life insurance

Annuity products • Fixed annuities • Immediate annuities • Variable annuities1

Investment products1

• Mutual funds • Retirement plans – traditional IRA, Roth IRA, SEP-IRA, SIMPLE IRA, 401(k), 403(b) TSA • College savings plans – 529 college savings plans,

Coverdell education savings accounts, UGMA/UTMA accounts

• Brokerage services – stocks, bonds, ETFs, UITs • Investment advisory services – adviser-managed and

third-party managed accounts, financial planning services

Insurance products2

• Dental and vision insurance • Disability income insurance • Group employee benefits • Group voluntary benefits • Impaired risk life insurance • International life and health insurance • Long-term care insurance • Health insurance • Medicare supplement insurance • Medicare Advantage and prescription drug plans

1 Securities offered through MWA Financial Services, Inc., a wholly owned subsidiary of Modern Woodmen of America. Member: FINRA, SIPC. Investment Advisory Services offered through MWA Financial Services, Inc., a Registered Investment Adviser.

Individual agents may not be licensed to sell all products. 2 Not issued by Modern Woodmen of America. Brokered insurance products

available through MWAGIA, Inc., a Modern Woodmen subsidiary. Product availability varies by state.

ProductsModern Woodmen offers financial products to help you meet a wide range of needs.

2019 FINANCIAL HIGHLIGHTS

Fraternal expenditures for the year reflect strong usage of benefits and programs by members.

Fraternal expendituresDollars in millions

Modern Woodmen’s asset base is a strength.

Growth in assetsDollars in billions

Life insurance in force shows consistent growth and increased protection for members.

Life insurance in forceDollars in billions

Bonds

Certificate loans, cash and other

Mortgage loans and real estate

Common stocks

Quality InvestmentsAs of 12/31/2019, approximately 99.7 percent of bonds were of high or medium quality.

84%

5%

3%

8%

292019 ANNUAL REPORT28 Forward motion / Modern Woodmen of America

2019 ANNUAL REPORT // Member Benefits

FINANCIAL STATEMENTSModern Woodmen of America – Year ended Dec. 31, 2019 (dollars in thousands) unaudited

2019 2018

Operating activities

Premium and annuity considerations $957,749 $963,260

Net investment income 612,728 600,363

Misc income 9,049 12,349

Total cash provided by operations 1,579,526 1,575,972

Benefit and loss-related payments 1,116,185 1,061,737

Commissions and other expenses paid 204,005 202,523

Net transfers to separate accounts 62,638 114,583

Dividends paid 7,451 7,415

Total cash used in operations 1,390,279 1,386,258

Net cash provided by operating activities 189,247 189,714

Investing activities

Proceeds from investments sold:

Bonds 1,394,411 1,356,058

Stocks 132,770 150,116

Mortgage loans 130,548 56,084

Real estate 0 3,282

Other invested assets 77,364 78,340

Miscellaneous proceeds 14,410 3,956

Total investment proceeds 1,749,503 1,647,836

Cash applied, cost of investments acquired:

Bonds 1,871,453 1,699,890

Stocks 61,451 77,179

Mortgage loans 0 64,120

Real estate 351 389

Other invested assets 99,660 121,260

Miscellaneous applications 22,088 37,706

Total investment applications 2,055,003 2,000,544

Net decrease in certificateholders’ loans (5,590) (4,268)

Net cash used in investing activities (299,910) (348,440)

Other cash provided by financing activities and other miscellaneous sources 205,289 131,138

Increase (decrease) in cash and short-term investments 94,626 (27,588)

Cash and short-term investments at beginning of year 268,728 296,316

Cash and short-term investments at end of year $363,354 $268,728

2019 2018

Assets

Bonds $13,627,696 $13,141,262

Stocks 860,782 734,337

Mortgage loans 458,883 589,432

Real estate 18,059 19,255

Cash 363,354 268,729

Certificateholders’ loans 147,723 152,721

Securities lending reinvested collateral 375,154 353,066

Other invested assets 451,845 412,653

Total cash and invested assets 16,303,496 15,671,455

Investment income due and accrued 127,567 128,982

Electronic data processing equipment 3,422 5,306

Other assets 3,953 4,151

Separate account assets 902,209 666,036

Total admitted assets $17,340,647 $16,475,930

2019 2018

Income

Premiums:

Life and annuity $956,350 $960,950

Other 1,439 2,210

Investment income, net of expenses 613,344 599,895

Amortization of interest maintenance reserve 12,941 16,053

Other income 9,049 12,350

Total income 1,593,123 1,591,458

Benefits and expenses

Benefits:

Life and annuity 1,118,615 1,053,735

Other 370 11,830

Increase in aggregate reserves 144,533 149,748

Employees’ and fieldworkers’ benefit plans 9,722 7,362

Commissions 53,784 56,702

General insurance expenses 117,981 123,528

Insurance, taxes, licenses and fees 8,293 6,788

Fraternal, charitable and benevolent expenses 20,431 19,900

Net transfers to separate accounts 55,701 112,778

Total benefits and expenses 1,529,430 1,542,371

Net gain from operations before dividends/net realized capital gains 63,693 49,087

Dividends to certificateholders 8,241 7,415

Net gain from operations before net realized capital gains 55,452 41,672

Net realized capital gains 34,074 68,211

Net income $89,526 $109,883

2019 2018

Balance at beginning of year 1,878,929 1,820,288

Net income 89,526 109,883

Net unrealized capital gains (losses) 184,961 (127,597)

Change in asset valuation reserve (89,049) 39,115

Change in nonadmitted assets 1,612 (11,064)

Other changes, net (47,670) 48,304

Balance at end of year $2,018,309 $1,878,929

Statements of Cash Flows

Balance Sheets

Statements of Operations

Statements of Surplus

2019 2018

Liabilities and surplus

Aggregate reserves:

Life and annuity $12,908,456 $12,730,643

Accident and health 1,784 1,991

Certificate and contract claims 33,146 41,531

Other certificateholders’ funds 3,460 3,437

Dividends payable to certificateholders 8,090 7,300

Accrued commissions, general expenses and taxes 17,676 15,854

Payable for securities lending 375,154 353,066

Other liabilities 653,777 439,958

Liability for benefits for employees 63,925 63,481

Interest maintenance reserve 28,556 36,649

Asset valuation reserve 326,105 237,055

Separate account liabilities 902,209 666,036

Total liabilities 15,322,338 14,597,001

Total surplus 2,018,309 1,878,929

Total liabilities and surplus $17,340,647 $16,475,930

312019 ANNUAL REPORT30 Forward motion / Modern Woodmen of America

2019 ANNUAL REPORT // Financial Statements