CONTACTS:
FOR IMMEDIATE RELEASE
OLDWICK - NOVEMBER 30, 2017 10:19 AM (EST)
The U.S. life/annuity (L/A) industry’s net income for the first nine months of 2017 of $30.9 billion more than doubled the prior-year period, as a $44.3 billion decline in total expenses and federal and foreign taxes offset a 4% decrease in total income. These preliminary financial results are detailed in a new Best’s Special Report, titled, “A.M. Best First Look—Third Quarter 2017 U.S. Life/Annuity Financial Results,” and the data is derived from companies’ nine-month 2017 interim statutory statements that were received by Nov. 27, 2017, representing an estimated 91% of total industry premiums and annuity considerations.
According to the report, net income was further impacted by a 28% decline in commissions and expense allowances on reinsurance ceded due to 2016 reinsurance agreements at Genworth Life and Annuity Insurance Company, as well as Prudential Annuities Life Assurance Corporation’s recapture of risks associated with variable annuity living benefits. This resulted in $6 billion of income in the nine-month 2016 period not repeated in 2017.
The report notes that capital and surplus for the industry increased by $19.2 billion since the start of the year and as of Sept. 2017 it had reached $399.7 billion. The large improvement in net income and a 15.6% reduction in stockholder dividends offset steep declines in unrealized gains and contributed capital.
To access the full copy of this special report, please visit http://www3.ambest.com/bestweek/purchase.asp?record_code=268264 .
A.M. Best is the world’s oldest and most authoritative insurance rating and information source.