A.M. Best has reported that a $7.9 billion improvement in net investment helped to ease the U.S. life/health industry’s income losses for year-end 2017, which dropped just 2.8% when compared with the previous year.
The report’s data, which was collected from companies’ annual statutory statements, showed that investment income helped to offset declines in premiums and annuity considerations, commissions and expense allowances on reinsurance ceded, and other income.
Notable premium and annuity declines over 2017 included a $17 billion slump reported by Prudential Annuities Life Assurance Corporation and MetLife, Inc., and a total drop of $27.1 billion at Transamerica Life Insurance Company and Forethought Life Insurance Company, which was related to reinsurance agreements entered into in 2017.
Meanwhile, AGC Life Insurance Company reported a $14.7 billion increase, as $14.0 billion of reserves were ceded in 2016.
A.M. Best also refer to a $53.2 billion decline in pre-tax net operating gain for the U.S life/health industry in 2017, which is down 14.6% from 2016.
However, the report finds that 2017 total industry net income only declined 1.4% from 2016, totalling $33.9 billion, thanks to a $4.6 billion reduction in federal and foreign taxes, as well as a $4.0 billion decrease in net realized losses.
Additionally, capital and surplus for the U.S life/health industry rose $11.2 billion over 2017, reaching a total of $372.5 billion at year-end.
