According to a new AM Best report, US life/annuity industry net income increased more than 50%, compared to the same period from last year.
The report also showed that the US life/annuity industry’s total income rose 3.9%, from the prior year period, with a 2.7% increase in premiums and annuity considerations, and an 8.6% increase in net investment income being the main drivers for the rise.
At the same time, total expenses for the industry delivered strong growth with a 7.8% increase, while increases in surrender and other benefits drove a 7.2% rise in incurred expenses.
However, resulting pre-tax net operating gain was $15 billion, down by 30.4%, a major decrease compared to last years period of $21.6 billion.
Moreover, both a $1.4 billion decrease in tax obligations and a $10.2 billion decline in net realized capital losses, heavily contributed to the industry’s net income of $13.4 billion.
In addition, capital and surplus declined 1.1% from the end of 2021, to $478.9 billion, as $18.9 billion of net income, contributed capital and change in asset valuation reserve were reduced by $24 billion.
AM Best also noted that holdings in cash and short-term investments declined by 11.9% from the end of 2021, while investments in mortgage loans increased 2.7% from the end of 2021.
Furthermore, this report comes shortly after the rating agency recently released another report which highlighted how publicly traded US life/annuity insurers saw a strong recovery in 2021, with a $35 billion increase in revenue to $297.5 billion.
Meanwhile, the ratings agency also released another recent report that addressed how embedded insurance is gaining greater global traction.
