AM Best’s “First Look” report provides early insight into the financial state of the US life and annuity industry for 2023.
The data in this report is consolidated from companies whose 2022 annual statutory statements were received by April 3, 2023. These companies account for an estimated 97% of total industry premiums and annuity considerations. These companies also account for 90% of capital and surplus.
In 2022, US life and annuity total income rose 11% from the prior year, standing at $989.2 billion. There was an 11.2% increase in premiums and annuity considerations while other income saw an increase of 54.2%.
Total expenses for the industry grew by 10.9%, the reason for this has accounted for a $35.0 billion reduction in net transfers to separate accounts. At the same time, there was a $42.8 billion increase in general insurance and other expenses.
The pre-tax net operating gain due to these factors was $54.8 billion. Which accounts for an increase of 14%.
According to the report, a $3.9 billion increase in net realized capital losses contributed to the industry’s net income of $36.8 billion. This number is 5.6% higher than that from 2021.
The report also suggests that capital and surplus declined 1.4% from the end of 2021 to $473.5 billion. Net income of $55.2 billion along with contributed capital, and change in asset valuation reserve were reduced by $65.3 billion, consisting of a change in unrealized losses, other changes in surplus, and stockholder dividends.
Holdings in cash and short-term investments have seen a decline of 3.0% from the end of 2021. The industry’s investments in mortgage loans have continued on an upward trend, increasing 8.5% from the end of 2021, with the asset class now constituting 13.4% of total invested assets.
