U.S. life/annuity insurers’ net income increases sharply in 1Q 2019 | CustomNews.pk

U.S. life/annuity insurers’ net income increases sharply in 1Q 2019

OLDWICK: The U.S. life/annuity (L/A) industry’s net income in the first quarter of 2019 rose sharply over the prior-year period, to $14.9 billion from $3.2 billion, due mainly to a significant decline in total expenses.

[the_ad id="32940"]The preliminary financial results are detailed in a newBest’s Special Report, titled, “First Look – Three Month 2019 Life/Annuity Financial Results,” and the data is derived from companies’ three-month 2019 interim period statutory statements that were received by May 29, 2019, representing an estimated 93% of total industry premiums and annuity considerations.

According to the report, the L/A industry’s total income for the first three months of 2019 declined slightly by 1.3% from the prior-year period, as net investment income remained unchanged and a $37.7 billion increase in premiums and annuity considerations was negated by a $40.7 billion decline in other income.

However, a $12.8 billion decrease in incurred benefits, coupled with a $9.8 billion reduction in general insurance and other expenses, and an $8.5 billion reduction in net transfers to separate accounts drove a $13.6 billion reduction in total expenses.

Despite relatively flat income, the decline in expenses resulted in pre-tax net operating gain doubling from the prior-year period to $21.9 billion.

A $2.0 billion increase in federal and foreign taxes was offset by a $2.8 billion reduction in net realized capital losses, boosting the total industry’s net income.

What is your view on this ? Let us know in the comments section