During the first six months of 2024 net income for the US life/annuity insurance sector increased by 7.1% over the same prior year period to $14.1 billion, driven primarily by lower realised capital losses, according to a new report from AM Best.
If you recall, the US life/annuity market witnessed an 80.4% decrease in net income, during the first three months of 2024, falling from $8.1 billion in the prior year, to $1.6 billion.
The rating agency also noted that the L/A industry’s total income for H1’24 climbed 7.7% from H1’23 to $578.3 billion, as premiums and annuity considerations increased by 10.6% and net investment income rose by 10.0%.
In addition, total expenses for the industry increased by nearly 10% during the period, largely due to a $55.6 billion spike in surrender and other benefits, AM Best explained.
However, the agency stated that the resulting pretax net operating gain of $21.8 billion represented a 26% decline from the same period last year.
Nonetheless, with an 80% reduction in net realised capital losses, the industry’s net income of $14.1 billion was up by 7.1% over the same period in 2023.
In addition, capital and surplus saw a slight increase from the end of 2023, reaching $506.2 billion for the period, as $20.3 billion of net income, change in unrealised gains, contributed capital and other changes in surplus were reduced by $18.6 billion, consisting of a change in asset valuation reserve and stockholder dividends.