February 16, 2015 INN Exclusives

Some Carriers Beat The 4Q Blues

By Cyril Tuohy InsuranceNewsNet

As some of the nation’s largest life and retirement carriers blamed lower interest rates and currency fluctuations for poor quarterly earnings performance, companies with deep roots in distribution and strong ties to the middle market performed well.

Primerica, a distributor of term insurance and investment products, reported fourth quarter net income of $45.5 million, an increase of 22 percent over the year-ago ago period.

Fourth quarter revenue of $345.3 million increased 8.5 percent over the year-ago quarter. The company also reported fourth quarter net income per share of $0.84, an increase of 26 percent over the year-ago quarter.

Fourth quarter operating earnings per share of $0.91 bested analysts’ consensus estimates of $0.85 per share.

Full-year 2014 net income of $181.4 million increased 11 percent, the company said. Net income per share was $3.29, an increase of 16 percent over 2013, the company also said.

In a company press release earlier this month, chairman and co-CEO Rick Williams said 2014 results were due in part to the increase in net premiums generated by term life and higher sales of investment and savings products.

The company also saw a 3 percent growth in its sales force, thanks to new incentive programs for producers.

Low interest rates were mentioned only once in the company’s earnings call with analysts, a sign that rates barely registered as a variable affecting the company’s performance.

Ameriprise Financial, a diversified financial services company with a robust retail advice and wealth management business and an institutional asset management arm, reported positive results in spite of interest rates at all-time lows.

Net income of $426 million increased 43 percent over the year-ago period, the company said. Fourth quarter operating income per share of $2.30 increased 23 percent over the year-ago quarter, and easily beat the consensus estimate of $2.20 per share.

Full-year 2014 net income of $1.6 billion increased 14 percent from 2013. Revenue of $12.2 billion also jumped, by 10 percent over 2013, the company reported.

CEO James M. Cracchiolo said profitability in Amerprise’s advice and wealth management segment had increased 33 percent “and we delivered this with interest rates at all-time lows.”

“Client assets are up 9 percent, as we've seen good flows in our wrap platform, new accounts acquired and market lift,” he said.

He also said the company had recruited 73 new advisors, all with industry experience, and that advisor productivity is “at an all-time high.”

InsuranceNewsNet Senior Writer Cyril Tuohy has covered the financial services industry for more than 15 years. Cyril may be reached at cyril.tuohy@innfeedback.com.

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 cyril.tuohy@innfeedback.com.