The U.S. life/annuity industry’s total income for year-end 2018 increased 8.5% from the prior year, attributable to $54.1 billion increase in other income that offset modest increases in premium and annuity considerations and net investment income, according to an AM Best analysis.
These preliminary financial results are detailed in a new Best’s Special Report, titled, “First Look – 2018 U.S. Life/Annuity Financial Results,” and the data is derived from companies’ annual statutory statements that were received by Mar. 14, 2019, representing an estimated 93% of total industry premiums and annuity considerations.
According to the report, the boost in total income was due to $50 billion of reserve adjustments on reinsurance ceded at American General Life Insurance Company, Voya Insurance, Delaware Life Insurance Company and Hannover Life Reassurance Company of America (related to the execution of Modified Coinsurance Agreements and the recapture of retrocessions from foreign affiliates).
Total incurred benefits rose 12.3% from the prior year due to a $76 billion increase in surrender and other benefits. Pretax net operating gain for the industry declined to $44.3 billion in 2018, down 19.7% from the prior year. An $8.1 billion reduction in federal and foreign taxes and a $2.4 billion reduction in realized capital losses resulted in total industry net income of $36.7 billion remaining relatively flat with the prior year.
To access the full copy of this special report, please visit http://www3.ambest.com/bestweek/purchase.asp?record_code=283817.
AM Best is the world’s oldest and most authoritative insurance rating and information source. For more information, visit www.ambest.com.
Copyright © 2019 by A.M. Best Rating Services, Inc. and/or its affiliates. ALL RIGHTS RESERVED.
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Contacts:
Associate Director
–
Corporate Data Management
+1 908 439 2200, ext. 5627
matthew.coppola@ambest.com
