The U.S. Life/Health (L/H) insurance and reinsurance industry recorded net income of $7.7 billion in the first-quarter of 2017 compared with $4.5 billion a year earlier, representing growth of 73.5%, according to analysis from global rating agency A.M. Best.
The analysis includes data from companies that make up an estimated 84% of overall industry premiums and annuities considerations, and a total 92% of industry capital and surplus, explains A.M. Best.
The U.S. L/H sector has started 2017 positively, increasing net income to $7.7 billion despite higher realised capital losses of $3.1 billion, compared with $300 million in Q1 2016. The primary driver of increased realised capital losses, says A.M. Best, is a result of the $1.8 billion year-over-year difference at Transamerica life insurance.
Overall, expenses across the group fell by 2.9% to $172.7 billion in the first-quarter of 2017, “due to a $9.3 billion reduction in net transfers to separate accounts and a $2.6 billion reduction in general and other expenses.”
This resulting in the sector recording its highest pretax net operating income since Q1 2013, of $14.5 billion, which is growth of roughly 129.8% on the same period in 2016.
Premiums and annuity considerations grew from $130.2 billion in Q1 2016 to $133.1 billion in Q1 2017, while net investment income grew 6.2% to $42.3 billion.
Capital and surplus actually increased to an impressive $365.1 billion in the first-quarter of this year, which is a record for the industry, according to A.M. Best. At the same time the industry’s invested assets reached a record high of $3.8 trillion, as of March 2017.
