AM Best Information Services

JUNE 07, 2021 08:13 AM (EDT)

Best’s Special Report: Net Income in U.S. L/A Industry’s First-Quarter 2021 Results Shows Sharp Year-Over-Year Improvement

 Matthew Coppola
Director, Data Management
+1 908 439 2200, ext. 5627

Christopher Sharkey
Manager, Public Relations
+1 908 439 2200, ext. 5159

Jim Peavy
Director, Communications
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OLDWICK - JUNE 07, 2021 08:13 AM (EDT)
The U.S. life/annuity (L/A) industry saw its net income jump in the first three months of 2021 to $13.3 billion in the first quarter of 2021, compared with a $23.2 billion loss in the same prior-year period, according to preliminary financial results. This financial review is detailed in a new Best’s Special Report, “First Look: Three-Month 2021 Life/Annuity Financial Results,” and the data is derived from companies’ three-month 2021 interim statutory statements that were received as of June 1, representing an estimated 99% of the total L/A industry’s net premiums written.

In the first three months of 2021, U.S. L/A total income declined by 9% from the prior-year period, as an increase in commissions and expense allowances was offset by declines in premiums and annuity considerations, as well as in net investment and other income. The large 33% reduction in expenses resulted in a pre-tax net operating gain of $27.1 billion, up from a loss of $46.7 billion in first-quarter 2020. A $10.9 billion increase in tax obligations and $26.5 billion decrease in net realized capital gains contributed to the industry’s net income for the first three months of 2021.

Capital and surplus increased slightly from the end of 2020, to $446.8 billion, as $15.6 of net income and contributed capital nearly was negated completely by a $4.7 billion change in unrealized losses, a $3.6 billion change in asset valuation reserves and $6.5 billion of stockholder dividends.

To access the full copy of this special report, please visit .

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 London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City.