A new report from AM Best, entitled First Look: Six-Month 2023 U.S. Life/Annuity Financial Results, looks at the results reported by companies representing an estimated 98 per cent of that industry’s total premiums and annuity considerations. It found that net income for U.S. life and annuity (L/A) insurance industry decreased by 39.5 per cent in the first half of 2023, dropping to $13.2-billion, from $21.9-billion the year before.
“The drop in net income was driven partly by $9.4-billion in net realized capital losses,” the firm writes in a statement about the report’s release. “Total income in the L/A industry rose 11.6 per cent to $528.9-billion from the prior-year period, driven by a 13.8 per cent increase in premiums and annuity considerations and a 3.9 per cent increase in net investment income. A resulting pretax net operating gain of $29.6-billion reflected an 18.8 per cent increase from the prior year period,” they write.
The report concludes by pointing out that insurance company investments in mortgage loans increased 2.1 per cent from the end of 2022. According to the September 25 report, the asset class now constitutes 13.5 per cent of total invested assets.