Total income in the U.S. life/annuity industry essentially remained flat in the first half of 2019, dropping slightly to $422.4 billion compared with $424.6 billion in the same prior-year period.
This financial review is detailed in a new Best’s Special Report, titled, “First Look—First Half 2019 Life/Annuity Financial Results,” and the data is derived from companies’ six-month 2019 interim statutory statements that were received as of Aug. 22, 2019, representing an estimated 95% of total industry premiums and annuity considerations.
According to the report, a $24.9 billion increase in premiums and annuity considerations in first-half 2019 was negated by a $26.0 billion decline in other income. These significant swings were largely the result of modified coinsurance agreements and the recapture of retrocessions from foreign affiliates at American General Life Insurance Company, United States Life Insurance in the City of New York and Hannover Life Reassurance Company of America.
In addition, pre-tax operating gain declined 4.9% from the prior year to $25.0 billion. A $1.2 billion increase in federal and foreign taxes and a $3.8 billion reduction in net realized capital losses boosted total industry net income by $1.4 billion from the same prior-year period to $18.8 billion.
The trend of reduced cash and bond positions in the industry continued during the first half of 2019, with further increases to mortgage loans and other invested assets. Mortgage loans, which have grown steadily over the first-half periods of the last five years, are up 44% from the first six months of 2015 and now constitute 12.8% of total invested assets.
To access a copy of this special report, please visit http://www3.ambest.com/bestweek/purchase.asp?record_code=289072.
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