Midwest Holding is reporting a fall in its annuity direct written premium in Q1 2022, compared to Q1 and Q4 of last year.
The firm said that it had seen a fall from $104.2m in Q4 2021 and $123.7 in Q1 of the same year to $98.1m. However, it also reported a rise in net income from a loss of $1.6m in Q1 2021 to a positive $187,000 in Q1 2022. Investment income in 2022’s first quarter was $6.2m compared with $2.9m in the prior- year’s quarter.
In a statement, the firm said: “Our total expenses on a GAAP basis were a negative $3.3m versus a negative $445,000 in the prior- year’s quarter. Total expenses were helped by negative interest credited due to the decrease in value of the options embedded in our liabilities of $2.0m and an increase in mark-to-market value of our options allowance of $6.4m. Salaries and benefits were $4.3m in Q1 2022 compared to $2.9m in Q1 2021 as we added personnel, built processes, and worked on technology initiatives.”
The firm said that it continued to see intense competition in the annuity market through aggressive pricing. It said that anticipated premiums written are expected to be in the range of $500m to $600m (SAP), influenced by state expansion, independent marketing organization expansion reallocated personnel, and other initiatives.
Georgette Nicholas, CEO of Midwest, said, “During the first quarter, we took action to position the company for further growth relating to pricing, products, and investing in technology and foundational capabilities. We saw encouraging trends in premiums written at the end of the first quarter and into the second quarter. We are benefiting from movements in interest rates in our investment portfolio along with the capabilities we have been developing and saw service fee revenue continue to grow. Overall, the first quarter has provided a base for us to continue to expand on.”
She added:: “Our opportunities are substantial to build on the value of our platform. The focus of the team continues to be on the key drivers of growth and profitability: Deepening distribution relationships, state expansion to achieve sales growth, reinsurance, investment management, and operational readiness and efficiency. With these five keys to our strategy, we will deliver on our commitment to shareholders to produce strong growth paired with a high return on capital.”
