The U.S. life/annuity (L/A) insurance industry saw its net income cut nearly in half in 2020, to $24 billion from $45 billion. These preliminary results are detailed in a new Best’s Special Report, titled, “First Look: 12 Month 2020 Life/Annuity Financial Results,” and the data is derived from companies’ annual statutory statements received as of March 17, 2020, representing an estimated 98% of total industry premiums and annuity considerations.
According to the report, premiums and annuity considerations for the L/A industry declined 8.3%, as Jackson National Life entered into a coinsurance agreement with Athene Life Re and ceded $24.0 billion of individual annuities to Bermuda. Increases in the amortization of interest maintenance reserve and other income offset the decline, and resulted in a 4.7% drop in total income, compared with prior year. Due to the drop in income exceeding a 2.6% reduction in expenses, pretax net operating gain fell by 35.0% to $39.9 billion from the prior year. Income tax expense was also down in 2020, by $4.1 billion, but net realized capital losses increased by $3.9 billion, resulting in the drop of total industry net income to $24.0 billion.
To access the full copy of this special report, please visit http://www3.ambest.com/bestweek/purchase.asp?record_code=306982.
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