By Cyril Tuohy
Net income at Symetra Financial, the Bellevue, Wash., life, annuities and benefits carrier, rose to $45 million, or 34 cents per share, from $43.8 million, or 32 cents a share, in the same period last year on the strength of fixed indexed and deferred annuities, the company reported.
Revenues also rose to $513.2 million from $508.4 million last year, the company said.
Speaking during a conference call with analysts, Tom Marra, president and chief executive officer, said deferred annuities turned in a strong quarter and that sales of fixed indexed annuities were “outstanding.”
“All in all, Symetra posted a solid second-quarter performance,” Marra said. Rising interest rates will help the company put more capital to work growing annuity and life insurance sales, and improve profit margins, he said.
“We’re starting to get a pretty good rhythm,” Marra said. Higher interest rates also should spur sales of traditional fixed annuities, he said.
Operating income from deferred annuities climbed to $25.4 million from $23.8 million in the same quarter last year, on sales of $441.5 million. This was an increase from $325.5 million in the same period last year, the company also said.
Sales of fixed indexed annuities rocketed to $309.8 million, up from $73 million in the same period last year. This was due to expanding fixed indexed annuity sales volumes through banks and a rise in interest rates, the company also said.
Operating income from individual life products increased to $14.5 million from $13.2 million last year. However, income from the company’s benefits segment was flat at $16.3 million due to lower sales, higher claims frequency and expenses connected to the company’s expansion into group life and disability insurance products, the company said.
The real weak spot this quarter was the 40 percent drop in operating income generated by income annuities due to mortality gains, lower interest margins and lower fee revenue on sales of third-party structured settlements, the company said.
Sales of income annuities dropped to $45.5 million from $95.3 million in the year ago period, according to the company.
Operating income from individual life products increased to $14.5 million from $13.2 million in the same period last year due to fewer individual life claims and lower operating expenses. Sales of new individual life products dipped to $3 million from $3.2 million in the same quarter last year, but sales should improve with the addition of new brokerage general agencies to Symetra’s distribution network, the company also said.
Marra also said a new marketing campaign, to be launched in the July 29 issue of Sports Illustrated, will boost Symetra’s brand recognition.
Cyril Tuohy is a writer based in Pennsylvania. He has covered the financial services industry for more than 15 years. He can be reached at [email protected].
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