The U.S. life/annuity (L/A) industry’s net income for the first nine months of 2017 $30.9 billion more than doubled compared to the same period last year, according to AM. Best.
2017’s outstanding earnings were down to the $44.3 billion decline in total expenses and federal and foreign taxes having been offset by a 4% decrease in the industry’s total income.
A.M. Best noted that net income was impacted by $6 billion of income in 2016 which wasn’t repeated in 2017 due to “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.”
By September 2017, the capital and surplus for the industry increased by $19.2 billion from the start of the year to reach a total $399.7 billion.
Steep declines in unrealized gains and contributed capital was offset by the large improvement in net income and a 15.6% reduction in stockholder dividends.
The A.M. Best report uses data from companies that represent about 91% of total industry premiums and annuity considerations and 96% of industry capital and surplus.
