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US life/health industry achieves 13% income growth: AM Best

29th April 2020 - Author: Matt Sheehan

The US life and health industry achieved 12.6% growth in net income for 2019, finishing the year at $45.6 billion, according to analysts at AM Best.

medical-and-health-claimsAccording to a new report from the rating agency, the life/annuity industry’s total income for 2019 increased by 3.0% to $872.3 billion compared with the previous year.

This was helped by a $59.5 billion increase in premiums and annuity considerations, but offset partially be a $38.0 billion decline in other income.

AM Best attributed these swings to modified coinsurance agreements and the recapture of retrocessions from foreign affiliates at American General Life Insurance Company, Hannover Life Reassurance Company of America and United States Life Insurance in the City of New York.

In addition, income growth slightly outpaced a 2.5% increase in total expenses, leading to a pre-tax operating gain of $55.1 billion, 11.8% higher than in the previous year.

A $4.2 billion increase in taxes was also offset by a $3.5 billion reduction in net realized capital losses, resulting in the $5.1-billion year-over-year increase in net income.

Capital and surplus for the industry increased by 6.2% from the end of 2018, reaching $415.6 billion at year-end 2019.

AM Best’s data was derived from company’s annual statutory statements, which represented an estimated 95% of total industry premiums and annuity considerations.

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