Midwest Holding Inc. has announced a GAAP net loss of $5 million for the second quarter of 2021 against a loss of $16.6 million for the prior year period, as the firm continues to advance its reinsurance pipeline.
Alongside the year-on-year improvement in net income, Midwest has reported a rise in GAAP revenue to $8.9 million for Q2 2021, a marked improvement on the negative $12.5 million announced a year earlier.
At the same time, non-GAAP annuity direct written premiums spiked by 26% to $125.9 million, versus $99.7 million for Q2 2020. Ceded premiums fell by 3%, year-on-year, to $86.1 million for Q2 2021.
Non-GAAP management revenue, which totalled $3.2 million in Q2 2020, increased by a significant 184% to $9.1 million in Q2 2021.
This is comprised of $4.9 million of net revenue on reinsurance, primarily ceding commissions; $3.2 million of net investment income; $0.7 million of service fee revenue, net of expenses; and $0.4 million of other revenue.
Midwest notes that importantly, it has continued to advance its reinsurance pipeline, which includes closing a key transaction that helped to drive the turnaround in its financial results. The carrier notes that these pipes takes time to establish and develop, but are designed to support long-term sustainable growth.
A. Michael Salem, Co-Chief Executive Officer (CEO) at Midwest, commented: “This was a solid quarter for Midwest, and we continue to execute on our plan and strengthen our position as an industry leader.
“On a macro level, our opportunity remains as strong as ever: the U.S. wealth management and financial services value chain continues to be under flux. Asset managers are becoming insurance companies, traditional insurers are divesting assets, private equity is aggregating, technology is circling. We expect this industry realignment to continue for some time – with the true winners to be determined in decades not years.
“Midwest is, in fact, built for this environment – from the ground up – as a technology-enabled life and annuity company. At the forefront of our vision is our commitment to driving value to our customers and partners. We do this as an open architecture product developer. Our platform allows us to aggregate and curate alternative asset management that we repackage and distribute to individuals seeking to fund their retirement and institutions seeking unique, uncorrelated returns. Our business is positioned to be aligned with these key stakeholders by connecting them to attractive products with top customer service, all powered by information and technology. We believe we have the people, the platform, and the vision to be a long-term winner in this market.”