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FOR IMMEDIATE RELEASE
OLDWICK - SEPTEMBER 01, 2020 02:22 PM (EDT)
The U.S. life/annuity industry’s net income fell by 66% in the first half of 2020, compared with the same prior-year period, driven predominantly by a 10% decline in premiums and annuity considerations. This financial review is detailed in a new Best’s Special Report, titled, “First Look— Six-Month 2020 Life/Annuity Financial Results,” and the data is derived from companies’ six-month 2020 interim statutory statements that were received as of Aug. 26, 2020, representing an estimated 98% of total industry premiums and annuity considerations.
According to the report, although some life insurers provided COVID-19-related premium refunds to policyholders, the primary reason for the steep premium decline was Jackson National’s ceded coinsurance agreement with Athene Life Re, which had the effect of moving approximately $27 billion of premium out of the U.S. statutory industry population and into Bermuda. Total expenses for the industry increased 1.1%, as a 5.0% decline in surrender benefits, a 13.3% decline in general and other expenses and $11.6 billion less in transfers to separate accounts offset an 11.4% increase in death benefits. In addition, the premium decline and minimal expense increase resulted in a drop in net operating gain of 95.3% from the prior-year period, to $1.6 billion. Despite the reduction in net income and a 50% decline in unrealized gains, capital and surplus increased by 4.1% to $440.8 billion over the six-month period.
To access a copy of this special report, please visit http://www3.ambest.com/bestweek/purchase.asp?record_code==300706 .
AM Best is a global credit rating agency, news publisher and data analytics provider specializing in the insurance industry. Headquartered in the United States, the company does business in over 100 countries with regional offices in New York, London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City.