In the first nine months of 2024, US life/annuity total income was up 5.3% from the previous year, primarily due to increases of 13.7% in premiums and annuity considerations, as well as a 9.6% rise in net investment income, according to global credit ratings agency AM Best.
A new report released by the agency shows that premiums and annuity considerations increased to $636 billion, from $559.6 billion last year, while net investment income climbed from $163 billion to $178.7 billion.
Net income across the sector fell to $21.7 billion, representing a 30.5% decrease in comparison to last year’s $31.1 billion, while net operating gain also dipped to $24.4 billion during the period.
At the same time, total expenses for the sector increased by 8.8% to $812.4 billion in 9M’24, primarily due to a rise of $63 billion in surrender and other benefits, says AM Best.
In addition, AM Best noted that the sector’s capital and surplus rose from the end of 2023 to $514.4 billion, as $37.9 billion of net income, change in unrealised gains, contributed capital, and other changes in surplus were reduced by $31.5 billion, which consisted of a change in asset valuation reserve and stockholder dividends.
As well as this, the sector’s cash and short-term investment holdings were up 11% from the end of 2023, with the mortgage loan asset class accounting for 12% – 14% of invested assets over the past five years.
This analysis was based on data derived from companies’ nine-month 2024 interim period statutory statements as of December 4, 2024, which AM Best estimates to be representative 99% of total industry premiums and annuity considerations and 99% capital and surplus.
