Pacific Mutual’s 1985 Net Income Declines 38%

Pacific Mutual Life Insurance Co. reported a 38% drop in net income for 1985, the second consecutive annual decline since the Newport Beach company posted record earnings in 1983.

The company’s $15.4-million net income last year was down from $25.3 million in 1984 and off 50% from the record $30.8 million in 1983.

But executives at Pacific Mutual, the nation’s 27th largest insurance company, say they are not worried. The lower net income is the result of a 56% increase in the sales of individual life insurance policies, which pushed up operating costs and required higher policy reserves to fund future benefits, said Harold T. Joanning, a senior vice president and financial executive.

The company did not release last year’s financial figures until this week because of delays in printing its annual report, said Geno Effler, the company’s public relations manager.

Because the company is a mutual organization, owned by its policyholders, the net income was put into contingency funds, raising that account--after deductions taken during the year--by 2.4% to $224.2 million from $218.9 million at the end of 1984.

Pacific Mutual’s assets as of Dec. 31 were $4.6 billion, a 24.3% increase from $3.7 billion. The company had more than $27 billion of life insurance in force and more than $15 billion of investment money under management for outside clients.

The company’s income from premiums rose 45.9% last year to $1.4 billion from $940.3 million, boosting total income 45.2% to $1.8 billion from $1.2 billion.