US L/A industry sees 5.7% net income decline

Written by Adam Cadle

09/04/2024

The US life/annuity (L/A) industry posted a 5.7% decline in net income to $37.6bn in 2023, which included $15bn of net realised capital losses, according to AM Best.

AM Best said the L/A industry’s total income slid 1.1% in 2023 from the prior year, driven by a 3% decline in premiums and annuity considerations (net of reinsurance), which were offset by a 9.5% increase in net investment income.

Industry expenses declined 1.9%, due to a 14.1% reduction in general and other insurance expenses and a $35.8bn increase in net transfers to separate accounts. The resulting pretax net operating gain of $65.7bn was up 12.6% from the prior year.

Capital and surplus rose 5%, to $506.1bn, from the end of 2022, as a combined $69.8bn in net income, contributed capital, change in unrealised gains, and other changes in surplus were reduced by $47.1bn, owing to a change in asset valuation reserve and stockholder dividends.

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