Earnings per share increased 27.9% and 7.3% in 1997 and 1996 due to acquisitions, increased profitability and realized gains noted above, and the reacquisition of shares in the third quarter of 1996. On an operating income basis, earnings per share increased 14.8% and 17.3% in 1997 and 1996, due primarily to improved operating results in the Insurance segment, including the impact of acquisitions. Earnings per share - assuming dilution increased 27.8% and 7.1%.
Earnings on investments of the parent company, dividends on preferred stock and Capital Securities, parent company operating expenses, interest expense and consolidation entries are included in the "Other" category. Substantially all the Company's capital is allocated to the business segments.
Total premiums and receipts for policyholder accounts for life products increased 74.2% to $1,216.8 for 1997 and 71.8% to $698.7 in 1996. Excluding the impact of the Chubb Life acquisition, new first-year life insurance premiums and receipts for policyholder accounts for 1997 increased $45.1 or 18.8% from 1996, primarily due to an increase in bank marketing sales. Renewal and single life premiums for 1997 increased 5%, excluding Chubb Life. Excluding the impact of acquisitions, 1996 total premiums and receipts increased 6.6% from 1995.
Group accident and health operating income was $(.6), $14.7 and $25.9 for 1997, 1996 and 1995. Conventional medical coverages continue to be impacted by increased utilization of health care services and medical inflation, which escalated during the year. Rate increases have partially mitigated these factors. Favorable medical experience among alternatively-funded medical coverages in 1996 and 1995 has returned to a more typical level in 1997. Disability results remain below the prior year due to an increase in the new claims rate and a decrease in the claims termination rate.
Recently, the Company implemented certain strategic initiatives to improve earnings in the Group Products class, including an increased emphasis on life and disability products. These products will be marketed through additional distribution channels, including the Company's Individual Life agency channels. With respect to accident and health products, the focus will be on retaining existing profitable business, while sales to new customers will be de-emphasized until such time as health profit targets are being met. Group health marketing efforts will focus on North Carolina and four other Southeastern states, where the Company's presence is strongest. Lastly, the Company is pursuing significant expense reductions in its Group operations.
Nature of Operations: Jefferson-Pilot Corporation (the Company) operates in the life insurance and communications industries. Life insurance, accident and health insurance and annuities are currently marketed to individuals and businesses in the United States through the Company's principal life insurance subsidiaries: Jefferson-Pilot Life Insurance Company (JP Life), Alexander Hamilton Life Insurance Company of America (AH Life), First Alexander Hamilton Life Insurance Company (FAHL) and recently acquired Chubb Life Insurance Company of America (Chubb Life) and its subsidiaries, Chubb Colonial Life Insurance Company (Colonial) and Chubb Sovereign Life Insurance Company (Sovereign). Communications operations are conducted by Jefferson-Pilot Communications Company (JPCC) and consist of radio and television broadcasting, through facilities located in strategically selected markets in the Southeastern and Western United States, and sports program production.
Cost in Excess of Net Assets Acquired: Cost in excess of net assets acquired (goodwill) is amortized on a straight-line basis over periods of 5 to 40 years. Accumulated amortization was $14 and $9 at December 31, 1997 and 1996. Carrying amounts are regularly reviewed for indications of value impairment, with consideration given to financial performance and other relevant factors.
maturity. In addition, held to maturity debt securities with an amortized cost of $620 and a fair value of $633 were transferred to the available for sale classification, increasing unrealized net holding gains by $13.
Committee, not to exceed ten years from the award date, and vest immediately or over periods as determined by the Committee. Awards of restricted and unrestricted stock grants are limited to 10% of the total shares reserved for the Plan. The Employees' Plan will terminate as to further awards on May 1, 2005, unless terminated by the Board at an earlier date.
Income taxes as reported in the consolidated statements of income are as follows: