A new note from AM Best says that total income in the US life and annuity market rose 4.1% during the first nine months of the year.
This was driven, wrote the firm, by a 7% increase in premiums and annuity considerations along with a 2.6% increase in net investment income.
Over the same period, total expenses for the industry grew 4.2%, which AM Best said was mostly due to a $38.6bn reduction in net transfers to separate accounts. Resulting pre-tax net operating gain was $42bn, up 2.5%.
A $4.6bn decline in net realised capital losses contributed to the industry’s net income of $31.4bn, up 25% from the same period in 2021.
AM Best also noted that capital and surplus fell 2% to $482.4bn, as $45.7bn of net income, contributed capital, and change in asset valuation reserve were reduced by $55.3bn, consisting of a change in unrealised losses, other changes in surplus, and stockholder dividends.
Holdings in cash and short-term investments declined 3.4% from the end of 2021. Investments in mortgage loans continue to climb, increasing 6.4% from the end of 2021, with the asset class now constituting 13.2% of total invested assets.
